Originally Posted: 30 March 2021 | Updated: 19 August 2021
Lately, critics have raised concerns that creating and trading NFTs on the Ethereum blockchain will lead to a disproportionate increase in carbon footprint. This issue is tricky and, there’s a lot of misinformation out there. There are three key concepts pertinent to understanding this overheated debate fully, and one solution Immutable is proposing today.
The definition of NFTs or “non-fungible tokens,” are special types of cryptographic tokens which represent a good or asset, covering a wide range of unique tangible and intangible items, from collectible trading cards NFTs (e.g. Gods Unchained), to digital art (e.g. popularized by Beeple and Pranksy), virtual worlds (e.g. Sandbox) and even digital sneakers (e.g. RTFKT Studios). NFTs can be created (aka minted), traded, earned, shared, gamed and collected — on marketplaces, on exchanges or in games. NFTs are interoperable. There’s now real value to users in the form of free-market economies and secondary markets of NFT marketplaces, previously locked in walled gardens or restrictive ecosystems.
The definition of ‘gas fees’ = the cost of using the Ethereum network. These fees are payments made by end users or applications on Ethereum to compensate miners for the work required to process and validate transactions on the Ethereum blockchain. Ethereum gas fees fluctuate with demand, and have risen sharply, presenting persistent issues that make trading NFTs in a marketplace more expensive for users per trade. At the time of publishing, the average gas fee for one NFT trade on Ethereum was U$36 if a user trades one NFT — irrespective of whether it’s worth $1 or $1,000. Importantly, Ethereum always uses the same carbon foot-print in the short run: your NFT has the same environmental impact irrespective of the gas fee it uses (so lowering it doesn’t help!).
The definition of ‘Layer 2’ solution. Layer 2 solutions refer to a popular method of scaling Ethereum while still retaining its security. Some L2s aim at fixing one or more scalability issues within the Ethereum blockchain. Immutable has built a dedicated L2 solution for scaling NFTs on Ethereum called Immutable X (an “exchange protocol”). Immutable X provides transaction scalability (up to 9,000 transactions per second), gas-free NFT trades and creations, and is fundamentally decentralized by relying on Ethereum — as opposed to a sidechain.
Immutable X has created the first carbon-neutral scaling solution for NFTs on Ethereum.
Any NFT that is created or traded on Immutable X is 100% carbon neutral.
First, Immutable X itself drastically reduces the gas used per NFT trade or mint, reducing the carbon footprint.
Fundamentally, Immutable X scales Ethereum by taking up less of the network per NFT mint or trade while still retaining its security. Via zero-knowledge proofs, we take NFT trades or mints which normally occur directly on Ethereum, and instead have those Ethereum keys sign transactions which we batch into a compressed validity proof, and upload to Ethereum. Less gas = less energy used = less carbon.
Immutable X compresses the amount of information required to trade or create an NFT secured by Ethereum, via batched zero-knowledge proofs. To illustrate this concept with an example, historically, minting 8 million Gods Unchained cards (the NFT trading card game) on Ethereum would consume approximately 490 million kWh (490 mWh).
On Immutable X, we’ve minted 8 million NFT cards with only ~1,030kWh = 844 kg CO2. That’s 475,000 times less energy consumption.
To put this in perspective a one-way flight from LAX to NYC is 807 kWh = 662 kg CO2.
Secondly, Immutable will offset the carbon footprint of all NFT transactions (trading & creating) on Immutable X to zero.
Immutable will buy carbon credits needed to offset the energy footprint of any NFT created or traded on Immutable X to zero. That means:
- Any NFT that is created or traded on Immutable X is 100% carbon neutral.
- Any NFT marketplace that is built on Immutable X is 100% carbon neutral.
- Any NFT game that is built on Immutable X is 100% carbon neutral.
Immutable commits to continue covering the ongoing cost of carbon credits into at least 2025, as NFT volume on Immutable X increases through the growing ecosystem of marketplaces and games. Immutable is committed to carbon-neutrality for NFTs. We’re ponying up for the cost of carbon credits because we believe that NFTs (on Ethereum) are a net good for the planet.
We don’t want ecological unsustainability to stop the greatest shift in monetization power from incumbents to content creators the world has seen. On Immutable X, we envision the power dynamic increase in favour of the NFT partners, developers, artists, creators, collectors, traders, while power consumption dramatically decreases.
If you’re interested to go carbon neutral on Immutable X, reach out to us by clicking here.
 Measuring carbon emissions on the Ethereum blockchain requires some complicated maths and depends on many factors. We took a top-down approach starting with the total energy consumption of Ethereum in a year then calculated the percentage of Ethereum blocks Immutable X will consume. Our consumption estimate was uploading one Validium zero-knowledge proof to Layer 1 every hour. Finally, we converted the energy consumption to carbon emissions based on the energy being produced in the United States.
 This is a similar calculation we’ve adapted for Validium to measure kgCO2 as measured by Digiconomist, and Memo Atken.
 On a macro level, accelerating the trading and collecting of digital NFTs offsets the need for environmentally wasteful throwaway physical goods. By reducing the physical reproduction of certain physical goods e.g. fast fashion, music, plastic games and moving to more digital collection options like NFTs, reduces the bigger secondary sources of environmental pollution. Namely mineral mining for plastics, production, supply chain, and transport pollution. Transport having the largest impact on energy consumption at 8,265 TWh in the US in 2019.
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