Polkadot (DOT)

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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

Polkadot

S.4

Name of the crypto-asset

DOT

S.5

Consensus Mechanism

Nominated Proof of Stake (NPoS) - GRANDPA & BABE

S.6

Incentive Mechanisms and Applicable Fees

Polkadot operates on a sophisticated Nominated Proof of Stake (NPoS) consensus mechanism, securing its Relay Chain and connected parachains. NPoS involves two key roles:

Validators: Secure the Relay Chain by staking DOT tokens, validating blocks, and participating in the consensus process (using GRANDPA for finality and BABE for block production). They are incentivized to maintain high uptime and honest behavior.

Nominators: DOT token holders who wish to contribute to network security but don't want to run a validator node can "nominate" (delegate their stake to) trusted validators. 

Incentives: Validators and nominators earn rewards in DOT for their participation, which come from the network's inflation (newly minted DOT) and a portion of transaction fees. This mechanism ensures network security and decentralization.

Slashing: Both validators and their nominators face penalties (slashing) for malicious behavior or prolonged downtime, ensuring accountability.

Fees: Transaction fees on Polkadot are paid in DOT. They are generally low and predictable, composed of a base fee, a byte fee (based on transaction size), and an optional tip for priority. A portion of these fees is burned, while another portion goes to the Treasury DAO, and a smaller share is distributed to validators. This economic model supports the network's long-term sustainability and efficiency.

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

~70,000 kWh per calendar year

S.10

Energy consumption sources and methodologies

The energy consumption of the Polkadot network is primarily due to the electricity used by its validator nodes that secure the Relay Chain. As an NPoS network, it does not involve energy-intensive mining. Methodologies for estimation typically involve: 

Hardware power draw: Analyzing the typical power consumption of standard server hardware used by validator nodes.

Validator count and uptime: Scaling this by the number of active validator nodes (typically 299 as of current network parameters) and their continuous operational uptime.

Polkadot's design is optimized for efficiency, often achieving significantly lower energy consumption compared to other Layer 1 PoS networks of similar scale. The network's core logic is designed to be lean, reducing computational overhead.

Supplementary key indicators on energy and GHG emissions

S.11

Renewable energy consumption

n/a

S.12

Energy intensity 

~0.000003 kWh per transaction

S.13

Scope 1 DLT GHG emissions – Controlled

0 t CO2eq per calendar year

S.14

Scope 2 DLT GHG emissions – Purchased

~33 t CO2eq per calendar year

S.15

GHG intensity 

~0.00000 kg CO2eq per transaction

S.16

Key energy sources and methodologies

The energy sources for Polkadot'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 for assessing this would involve:

Geographic identification: Attempting to identify 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). The relatively stable set of active validators (299) simplifies this estimation compared to dynamic PoW networks.

S.17

Key GHG sources and methodologies

The predominant source of Greenhouse Gas (GHG) emissions for Polkadot is Scope 2 (indirect emissions from purchased electricity). Methodologies for estimating these emissions involve:

Energy consumption * Emission Factor: Multiplying the estimated total electricity consumption of the Polkadot network (S.8) by the carbon intensity (grams of CO2 equivalent per kWh) of the electricity mix used by its validator nodes.

Focus on operational emissions: Calculations primarily focus on the operational energy usage of the NPoS validator nodes and the Relay Chain, which constitute the main energy-consuming components. Polkadot's shared security model means parachains derive their security (and thus part of their environmental benefit) from the Relay Chain's efficient operations.