Algorand (ALGO)

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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

Algorand

S.4

Name of the crypto-asset

ALGO

S.5

Consensus Mechanism

Pure Proof-of-Stake (PPoS)

S.6

Incentive Mechanisms and Applicable Fees

Algorand operates on a unique Pure Proof-of-Stake (PPoS) consensus mechanism. Unlike other PoS variants, PPoS selects validators (block proposers and verifiers) randomly and secretly from the entire pool of staked ALGO, ensuring decentralization and security without requiring complex delegation or voting.

Incentives:

Block Rewards: Participants who hold and stake ALGO automatically become eligible to be selected as block proposers or verifiers. They earn rewards in ALGO for securing the network and proposing/validating blocks. This process is automatic and does not require running a specialized node for basic staking.

Relay Nodes/Participation Nodes: Participants running full nodes (relay or participation nodes) contribute to network robustness and decentralization. While they do not receive direct block rewards like validators, they are critical for network health. 

Community Governance: ALGO holders can participate in network governance, guiding the protocol's evolution.

Fees: Transaction fees on Algorand are exceptionally low and predictable (e.g., 0.001 ALGO per transaction). These fees are paid to the network's reserve account rather than directly to validators, and a portion is effectively burned as part of the overall tokenomics. This low fee structure enables high transaction volume and micropayments. The PPoS mechanism is designed for immediate transaction finality, high throughput (over 1,000 TPS), and extremely high energy 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

~268 kWh per calendar year

S.10

Energy consumption sources and methodologies

The energy consumption of the Algorand network is primarily attributed to the electricity used by its participation nodes (validators) and relay nodes that secure and maintain the blockchain. As a Pure Proof-of-Stake (PPoS) network, it entirely avoids energy-intensive mining or complex, resource-heavy delegation schemes. Methodologies for estimation, as reported by the Algorand Foundation (often with partners like ClimateTrade), involve:

Node analysis: Estimating the power consumption of typical participation and relay nodes, which can often run on standard hardware or cloud instances.

Network-wide aggregation: Scaling these estimates by the number of active nodes and their operational uptime.

Algorand's PPoS design is inherently lightweight, requiring minimal computational resources and thus very little energy.

Supplementary key indicators on energy and GHG emissions

S.11

Renewable energy consumption

~100%

S.12

Energy intensity 

~0.000000004 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

~0.00000006 t CO2eq per calendar year

S.15

GHG intensity 

~0.000000000 kg CO2eq per transaction

S.16

Key energy sources and methodologies

The energy sources for Algorand's participation nodes and relay nodes are those of the data centers and hosting providers utilized by network participants. These sources reflect the diverse electricity grid mixes (conventional and sustainable) of their global distribution. Methodologies for assessing this, as led by the Algorand Foundation with partners like ClimateTrade, involve:

Comprehensive Footprint Assessment: Rigorously calculating the total energy consumption of the network's operations. 

Offsetting Strategy: Actively engaging in verified carbon offsetting programs (e.g., purchasing carbon credits) to neutralize and exceed the network's carbon emissions, effectively making the network carbon negative. This commitment means they are not just reporting, but actively mitigating their environmental impact.

S.17

Key GHG sources and methodologies

The predominant source of Greenhouse Gas (GHG) emissions for Algorand is Scope 2 (indirect emissions from purchased electricity). Methodologies for estimating these emissions, as detailed by the Algorand Foundation's commissioned reports, involve: 

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

Carbon Negativity: Algorand's unique approach involves an active partnership with ClimateTrade to measure its comprehensive footprint and then automatically purchase carbon credits (using smart contracts) equivalent to its emissions on a regular basis, making it a carbon-negative blockchain. This commitment sets a high standard for environmental stewardship in the blockchain space.