A new year comes with new hopes. The jarring coalescence between Web3 and environmental, social, and governance (ESG) initiatives is expected to pop up in 2022.
As a gentle reminder, Web3 refers to the third generation of the internet, now based on distributed technologies, decentralized infrastructure & platforms, and token-related services. Concrete examples of Web3 projects include decentralized autonomous organizations (DAOs), cryptos, and metaverses such as The Sandbox or Dogami. Web3 embodies the quintessential paradigm shift from the previous data-centric and centralized GAFAM-like internet to new blockchain-backed decentralized and financialized models.
For the Web3 revolution to be socially acceptable, the question of its environmental footprint and social impact must be on the table. Web3 is often disparaged and perceived as relying on sneered-upon technologies, surrounded by speculative noise. Blockchain and crypto protocols are on the other hand supported by a crowd of faithful adopters claiming to shape a better world. Web3’s advocates might be true.
Blockchains’ usage and crypto-currencies’ mining can potentially be energy-intensive and create high levels of carbon emissions. Various attempts to greenify blockchain exist — carbon offsetting. For example, the Ethereum’s switch from energy-intensive “proof of work” to “proof of stake” may reduce by 99.95% the protocol’s energy consumption, according to the Ethereum Foundation. Proof of stake is reported to be potentially carbon positive. Transitioning the world’s largest smart contract network to a new and more complex consensus mechanism may nonetheless prove technically quite challenging.
As Web3 projects are very rapidly maturing, numerous applications in healthcare, financial inclusion or climate change arise. Web3 is natively adequate for tech for good initiatives and prone to disrupt philanthropy initiatives. Big Green DAO is for instance a Web3 charity focusing on food justice, launched by Kimbal Musk, brother of the real Iron man. This experimental project developed bespoke social & governance structures that put voting rights on food grants distribution in the hands of DAO members. The coming years may be characterized by enhanced interactions between digital projects and real-world applications that could potentially lead to a new hybrid form of social management or city life.
Decentralizing decisions may change the world. This statement is a foundational principle of many Web3 projects. Blockchain conveys the triple promises of (1) increased transparency of voting and use of funds, (2) swift participatory and consensus-based decisions, and of (3) absence of bureaucracy and operational overhead, as in the example of Big Green DAO. In addition, blockchain may become a key enabler of a global ecological accounting system to track environmental data, but also to allocate rewards & penalties through carbon and biodiversity credits. Such developments would definitely bestow Web3 a more prescriptive role in terms of governance and green oversight.
The proliferation of green Web3 initiatives eventually reflects an increased awareness about the compelling need for sustainability and may let envision an achievable reconciliation between tech and environment. For example, minting greener and leaner NFTs may not be a lure. A first concrete step on the road to a sustainable Web3 could be to ease access to accurate measuring capabilities of blockchain projects’ carbon emissions, energy consumption and global environmental footprint. FinGreen AI offers smart data analytics solutions in that regard.
What gets measured gets offset, right?