Eco-friendly tokens: How the NFT environment is turning green
The move comes after a backlash from users
The non-fungible token (NFT) industry is turning green in an effort to adopt environmentally friendly minting processes.
Many are shifting to sustainable energy to power their NFT drops.
A backlash by internet users resulted in cancelling Discords’ plan of dropping its NFTs. Several critics targeted Hybe, the South Korean home of music band BTS which was about to launch its NFTs.
An increasing number of platforms are embracing a more sustainable approach to NFT by using proof-of-stake protocols for their minting activities.
Most NFTs are dropped on the Ethereum blockchain, a proof-of-work (PoW) blockchain waiting for the ETH2 upgrade, like BTC. Blockchain technology is now under the magnifying glass because of their high energy consumption. This has prompted several environmental friendly associations to ask governments to stop the crypto mining activity.
Major platforms are switching to sidechains, with blockchains acting as a bridge. This cuts their energy consumption but, above all, avoids high Ethereum gas fees, while others are minting their NFTs in-house.
The cost of minting an NFT starts from $0.5. At the time of writing, the average ETH transaction fee stands at around $38 but could be high as $60 depending on the demand of Ethers.
As Nifty’s platform explains: “High gas fees can be frustrating for NFT buyers and sellers as they can inflate the total cost of NFT purchase and can sometimes be more expensive than the NFT itself.”
Animoca Brands and a green solution
One of the biggest players of the NFT industry, Animoca Brands, revealed exclusively to Currency.com its green policy, while others are following on its wheels.
“Regarding environmental concerns, Animoca Brands is mindful of the high energy use of proof-of-work (PoW) protocol blockchains such as Ethereum and Bitcoin. The way PoW protocols work is (by design) resource-intensive, but there are also types of blockchain technology that are designed to be resource-efficient,” said an Animoca Brands spokesperson.
“Our subsidiaries, joint ventures, and partnerships prioritize proof-of-stake (PoS) protocols such as Flow, proof-of-staked-authority (PoSA) protocols such as Binance Smart Chain, and Layer-2 solutions such as Polygon. These technologies have drastically lower energy utilization and, consequently, emissions than PoW networks”.
Nifty partnership with Palm
Nifty said it has joined forces with Palm, a new token-powered ecosystem for NFTs. The claims to offer “low gas costs, fast transactions, and an over 99.99% reduction in energy consumption.
As Nifty explained, Palm is an NFT-optimised network designed for culture and creativity. It operates as an Ethereum sidechain, or a blockchain that operates independently and in parallel to Ethereum Mainnet.
Palm provides access to the Ethereum network to easily transfer assets back and forth with nearly zero carbon footprint by “prioritising a method of consensus that is designed to prioritise sustainability, speed and low transaction fees.”
“The carbon footprint of one transaction on Palm is equal to sending three emails. Additionally, there are no fees for the user on Palm and gas fees in Palm tokens. Each wallet created on Nifty is given a small amount of Palm to ensure our community can easily buy and sell the NFTs they love,” says Palm.