Advertisement
Cardano Foundation Unveils MiCA-Compliant Sustainability Indicators to Satisfy EU Crypto Regulations
- The Cardano Foundation, responsible for development of the Cardano ecosystem and more, has teamed up with CCRI to release a sustainability report.
- The report, intended to meet the benchmarks of EU crypto ESG regulations, was released earlier this week.
- Key findings from the report showed that Cardano employs an energy-efficient consensus mechanism and complies with sustainability requirements.
Cardano has arrived six months ahead of schedule to announce a set of “MiCA-compliant sustainability indicators”. The unveiling of these guidelines is set to match Cardano’s network with the requirements set in place by the European Union’s Markets in Crypto-Assets (MiCA) regulation.
In short, new rules in the EU demand crypto providers adhere to a set of self-imposed measures to ensure the network has minimal environmental impact.
Related: DDOS Attack on Cardano Network Backfires, Ending in Hacker Humiliation
Cardano Report to Set Benchmarks for Crypto Networks in the EU
Blockchain sustainability is a huge issue for the sector. Everyone probably knows the stat – the Bitcoin network uses more power than several entire nations – and the dilemma has only become more pertinent as BTC gains institutional interest.
Several scalability and sustainability solutions have been offered for the most prominent Web3 ecosystems, and the Cardano Foundation has now outlined its own benchmarks going forward.
Earlier this week, in collaboration with the independent Crypto Carbon Ratings Institute (CCRI), Cardano released a report outlining several key factors in the blockchain’s fight for a sustainable DeFi ecosystem.
Cardano Network Uses Substantially Less Energy than Ethereum, Bitcoin
Cardano’s annual electricity use comes in at 704.91MWh (as of last month) – significantly less than competitors like Ethereum (~2,604 MWh) and Bitcoin (~91 million MWh). The blockchain’s carbon footprint is measured at around 250.73 tCO2e, which is below average compared to other networks.
According to the CCRI, Cardano’s consensus mechanism is “energy-efficient”. Compared to proof-of-work blockchains like Bitcoin, which employ high-powered machines to “mine” hash functions, Cardano runs a proof-of-stake model that “consumes significantly less electricity”.
Overall, the report suggests that Cardano comfortably sits within the sustainability metrics proposed by the European Securities and Markets Authority and MiCA.
CEO of the Cardano Foundation, Frederik Gregaard, was buoyed by the results and their implications on the rest of the industry going forward.
As the adoption of crypto assets grows, so does the imperative for providers to address sustainability considerations…we can ensure that the Cardano network meets the stringent requirements of the MiCA regulation, integrating sustainability into their digital asset propositions.
Frederik Gregaard Get the most important crypto news delivered to your inbox by subscribing to the CNA newsletter
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
