Avalanche (AVAX)

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Field

Content

General information

S.1

CASP Name

BB TRADE ESTONIA OÜ

S.2

Relevant legal entity identifier

984500L05A5D0E66Q610

S.3

Blockchain network name

Avalanche

S.4

Name of the crypto-asset

AVAX

S.5

Consensus Mechanism

Avalanche Consensus (Probabilistic Proof of Stake)

S.6

Incentive Mechanisms and Applicable Fees

Avalanche utilizes a novel consensus mechanism, often referred to as Avalanche Consensus, which is a probabilistic Proof of Stake (PoS) protocol combining elements of classical and Nakamoto consensus. It achieves high throughput, fast finality, and energy efficiency.

Incentives:

Validators: Secure the network by staking AVAX tokens. They are randomly sampled by other validators to confirm transactions through repeated sub-sampled voting until consensus is reached. Validators are incentivized to maintain high uptime and correct responses by earning AVAX rewards. Rewards are based on proof of uptime and correctness.

Staking: AVAX holders can stake their tokens to become validators, contributing to network security and earning rewards.

Subnets: Avalanche's architecture allows for custom, application-specific blockchains called Subnets. Validators for a Subnet must also validate Avalanche's Primary Network, ensuring inherited security.

Fees: Transaction fees on Avalanche are paid in AVAX. These fees are dynamic, adjusting based on network demand and transaction complexity. Uniquely, all transaction fees on Avalanche are burned (removed from circulation), which creates a deflationary pressure on the AVAX supply. This mechanism helps to balance the inflation from block rewards and is subject to user governance.

S.7

Beginning of the period to which the disclosure relates

2024-01-01

S.8

End of the period to which the disclosure relates

2024-12-31

Mandatory key indicator on energy consumption

S.9

Energy consumption

~3,301,739.67 kWh per calendar year

S.10

Energy consumption sources and methodologies

The energy consumption of the Avalanche network is primarily due to the electricity used by its validator nodes and supporting infrastructure across its three built-in blockchains (X-Chain, C-Chain, P-Chain) and various Subnets. As a PoS protocol, it does not involve energy-intensive mining. Methodologies for estimation, as employed by CCRI in their benchmarking studies, involve: 

Hardware analysis: Estimating the power consumption of typical validator hardware. 

Node count and uptime: Scaling these estimates by the number of active validator nodes.

Avalanche's novel consensus mechanism is designed to be inherently lightweight, contributing to its very low energy footprint.

Supplementary key indicators on energy and GHG emissions

S.11

Renewable energy consumption

~30%

S.12

Energy intensity 

~0.0002600 kwh

S.13

Scope 1 DLT GHG emissions – Controlled

0 t CO2eq per calendar year

S.14

Scope 2 DLT GHG emissions – Purchased

~1,129.09 t CO2eq per calendar year

S.15

GHG intensity 

~0.0000900 kg CO2eq per transaction

S.17

Key energy sources and methodologies

The energy sources for Avalanche's validator nodes reflect the diverse electricity grid mixes of their global distribution. These include a combination of conventional sources (e.g., natural gas, coal) and renewable/sustainable sources (e.g., hydro, solar, wind, nuclear), depending on the geographic location of the validator operators. Methodologies, as employed by CCRI for their assessments, involve:

Geographic identification: Attempting to determine the physical locations of active validator nodes.

Grid mix data correlation: Integrating this location information with publicly available datasets on national/regional electricity generation mixes and their associated carbon intensity factors (e.g., from IEA, Ember, regional energy authorities).

S.17

Key GHG sources and methodologies

The predominant source of Greenhouse Gas (GHG) emissions for Avalanche is Scope 2 (indirect emissions from purchased electricity). Methodologies for estimating these emissions, as detailed in CCRI's reports, involve:

Energy consumption * Emission Factor: Multiplying the estimated total electricity consumption of the Avalanche network (S.8) by the carbon intensity (grams of CO2 equivalent per kWh) of the electricity mix where validators operate.

Comprehensive assessment: These studies aim to provide transparency on the environmental impact of PoS networks, considering factors beyond just energy but also how network design choices influence efficiency. Ava Labs has stated that sustainability remains a high priority.