Energy Impact Report: September 2024
As a proof-of-stake (PoS) blockchain, Solana continues to demonstrate its commitment to energy efficiency and environmental sustainability. Unlike traditional proof-of-work (PoW) networks, Solana’s design consumes far less energy, translating into significantly lower carbon emissions. Since the last Energy Use report in December 2023, the Solana network has made remarkable progress, reducing its carbon footprint by 69% through innovative on-chain purchases of carbon credits and pioneering the use of biodiversity credits.
To promote transparency, Solana users can now track the network’s energy performance in real time via an emissions dashboard. This dashboard, updated to comply with the Markets in Crypto Assets (MiCA) regulations set to take full effect in December 2024, allows stakeholders to monitor progress as the Solana Foundation continues to lead innovation in the blockchain sector while championing a sustainable future.
Understanding Blockchain Energy Efficiency
The blockchain industry is often criticized for its energy consumption, but not all networks operate with the same environmental impact. A blockchain’s energy usage largely depends on its consensus mechanism — either proof-of-work (PoW) or proof-of-stake (PoS). While PoW networks, like Bitcoin, require massive computational power and energy-intensive hardware to process transactions, PoS networks like Solana and Ethereum v2 operate more efficiently.
- PoW, used by Bitcoin, relies on miners using high-powered computers to solve cryptographic puzzles. This process consumed 173.42 terawatt-hours (TWh) of energy in a single year, with carbon emissions exceeding 85.89 million tons and water usage rivalling the needs of 300 million people in rural Sub-Saharan Africa between 2020 and 2021.
- PoS eliminates energy competition by randomly selecting validators. Validators stake cryptocurrency as collateral and efficiently verify transactions with minimal power consumption.
Solana has further optimized efficiency through its proof-of-history (PoH) innovation, which improves transaction processing. PoH timestamps every block to establish chronological order, verified by a Verifiable Delay Function. This eliminates redundant validations, speeding up the process and reducing energy use. Combined with Turbine block propagation for parallel transaction processing, Solana achieves unmatched scalability, processing over 50,000 transactions per second while maintaining energy efficiency.
Solana’s Energy Use in Perspective
As part of the Solana Foundation’s commitment to transparency, the network’s energy consumption data is reported in a public dashboard, maintained by the Crypto Carbon Ratings Institute (CCRI). As of September 4, 2024, projections for the year show:
- Annual Energy Consumption: Approximately 8,755 MWh — equivalent to the yearly energy usage of 833 American homes.
- Energy per transaction: 0.00412 watt-hours (Wh) — about the same energy it takes to perform a simple search engine query.
In comparison, Bitcoin’s PoW network consumes energy equivalent to 15.2 million American homes, while Ethereum v2 (PoS) uses less than 5,025 MWh annually. A single Solana transaction uses less energy than running a 100-watt lightbulb for one second.
Reducing Solana’s Carbon Footprint
Since December 2023, the Solana network has seen a dramatic reduction in its carbon footprint, dropping by 69% from 8,786 tCO2 (metric tons of carbon dioxide) to an estimated 2,671 tCO2 in 2024. To put this into perspective, this reduction is equivalent to the annual carbon emissions of 167 average Americans, who each produce about 16 tons of CO2 per year.
Focusing on Carbon Intensity
Carbon intensity — the emissions generated per kilowatt hour (kWh) of power — has emerged as a critical metric for comparing blockchain energy efficiency. Networks powered by renewable energy sources have much lower carbon intensity than those relying on fossil fuels. By analyzing these figures, the Solana Foundation strategically implements optimizations, scales operations, and offsets emissions.
Offsetting Environmental Impact
The Solana Foundation employs multiple strategies to offset the network’s environmental impact:
- Carbon Credits: The Foundation actively invests in blockchain-based carbon credits through platforms like EcoToken, which funds small-scale environmental initiatives. For 2023, credits were applied to urban tree-planting projects across North America.
- Biodiversity Credits: In collaboration with Terrasos, the Foundation supports a new form of credits that preserve ecologically sensitive land for up to 30 years. These credits are integrated directly on-chain using Solana, enabling comprehensive program governance and asset management.
Solana’s Decentralized Environmental Ecosystem
Solana’s energy efficiency and focus on sustainability have positioned it as the blockchain network of choice for environmental and ReFi (Regenerative Finance) projects. Among the ecosystem’s standout initiatives are:
- GainForest: A nonprofit using Solana’s blockchain to track donations and foster reforestation efforts globally.
- Sunrise Staking: A platform enabling users to donate staking rewards toward carbon offset programs.
- Outerverse: An outdoor-themed NFT marketplace that promotes ecological awareness.
- WiHi: Winner of Solana’s 2022 Summer Camp Hackathon Climate Award, this project incentivizes crowd-sourced weather and climate data to enhance forecasting models.
Sustainability Drives Innovation in Solana
Complying with evolving regulatory frameworks like the MiCA regulations and leveraging tools like blockchain-based credits, the Solana ecosystem is setting a benchmark for sustainability in the crypto industry. As the world adopts more eco-conscious practices, Solana continues to align its vision of scalable blockchain technology with the growing need for environmental responsibility.
With energy usage as low as a search engine query for every transaction, a dramatic reduction in its carbon footprint, and innovative offsets through projects like biodiversity credits, Solana exemplifies how blockchain networks can operate at scale without compromising the health of the planet. For more details and updates, explore Solana’s real-time emissions dashboard at http://climate.solana.com.