One of the most fundamental activities of a blockchain is to choose which nodes add blocks to the chain. Here at 5ire, we’ve created the 5ireChain blockchain to include ESG factors when selecting which nodes assemble blocks.
5ireChain is dubbed the world’s first sustainable blockchain network in part because of the multiple criteria used to evaluate a node holder’s beneficial environmental, sustainability, and governance (ESG) activities. 5ireChain’s consensus protocol uses this ESG evaluation to help choose which node will add new blocks to 5ireChain. During the block assembler selection process, nodes on 5ireChain that satisfy sustainability and ESG concerns have an edge. This novel method of addressing concerns is one of the many features that sets 5ire apart from traditional blockchains and shows 5ire’s commitment to encouraging real-world activities that alleviate ESG concerns.
5ire Addresses ESG Concerns with a Novel Consensus Protocol
Blockchain technology came into being when concerns emerged around ESGs’ impacts on the world’s population. Investors’ choices reflect this increasing awareness of ESG initiatives as “investors increasingly believe markets will punish companies that aren’t environmentally or ethically conscious while rewarding those that are,” as reported by an article featured in Forbes.
Considering the energy consumption of the flagship blockchain-based cryptocurrency Bitcoin, it was a no-brainer that this novel technology would earn a good deal of notoriety among ESG advocates. However, while Bitcoin’s energy consumption calls for concern, it is essential to note that we can utilize blockchain, the novel technology behind cryptocurrency, to create a sustainable environment and promote ESG initiatives.
5ireChain is the first layer-1 protocol to develop a sustainable network that addresses ESG concerns. Our sustainable proof of stake (SPoS) consensus mechanism considers sustainability one of the most critical components of the consensus mechanism. “I’m trying to … solve social problems — including water, health, climate, and education — using frontier technology” recounted 5ire’s cofounder, Patrik Gauri, in an interview published on Nasdaq.
5ire’s SPoS is a multifactor consensus protocol that uses criteria to determine which node can create blocks based on that node’s stake, reliability, randomized voting, sustainability score (including ESG factors), and previous nomination.
Randomized voting carries a certain amount of weight, ensuring that 5ireChain can still select nodes with a lower stake for block assembly. This random factor helps us curtail the unfair rigging of the network when nodes create a cartel by repeatedly nominating or delegating their stakes to favorite nodes.
Nodes are assigned a reliability score based on the number of times nodes have been online at voting, the duration they have held the stake, successful block creation in the given time slot, and the blocks attested. The staking algorithm calculates the reliability score from the node’s age, duration of staking, and history of successful block assembly.
Successful block assembly gives a node a higher probability of being reelected as an assembler again. If a node fails to create a block when assigned a slot, this results in a lower reliability score.
The SPoS consensus mechanism considers the sustainability score, which consists of the ESG scores of organizations or individuals running the nodes.
5ire uses proposals where nodes submit their sustainability report based on our template. 5ire ESG nodes evaluate the sustainability report and assign competing nodes weight on a Likert scale linked to each ESG factor.
The consensus protocol does not overlook stakers with more significant staked amounts, as the amount staked by a node is given significant weight in the template. Finally, the probability of being selected as an assembler shrinks after each epoch.
Nodes with the highest weight are selected for block assembly for a given period, after which the process of choosing the subsequent nodes resets. With these factors on-chain, nodes that certify the ESG requirements have a greater chance of becoming block assemblers in that particular network epoch.
This method of positively encouraging ESG participation and beneficial behavior is built into the very work of 5ireChain. Using novel technology to protect our most important assets is just one of the many ways that 5ire is working to promote sustainability and ESG concerns.
More information about 5ireChain can be found by clicking on the following links:
Website: https://5ire.org
White paper: https://bit.ly/5ireWP
LinkedIn: https://www.linkedin.com/company/5ireChain
Twitter: https://twitter.com/5irechain
Discord: https://discord.gg/GAWXJKnZQH
Telegram: https://t.me/OfficialFireChain