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ESG (Environmental, Social, and Governance) regulations for crypto assets aim to address their environmental impact (e.g., energy-intensive mining), promote transparency, and ensure ethical governance practices to align the crypto industry with broader sustainability and societal goals. These regulations encourage compliance with standards that mitigate risks and foster trust in digital assets.
| Name | Bitpanda Asset Management GmbH, Bitpanda GmbH |
| Relevant legal entity identifier | 9845005X9B7N610K0093, 5493007WZ7IFULIL8G21 |
| Name of the crypto-asset | THETA |
| Consensus Mechanism | THETA is present on the following networks: theta, ethereum. Theta Network combines a Byzantine Fault Tolerance (BFT) consensus mechanism with Proof of Stake (PoS) to achieve high security and throughput. Core Components: Hybrid BFT and PoS Model The modified BFT mechanism allows for fast transaction processing, while PoS secures the network by requiring participants to stake THETA tokens. Two-Layer Node Structure Enterprise Validator Nodes: Run by large enterprises and strategic partners, such as Google, Samsung, and Sony, Validator Nodes propose and validate new blocks. These nodes are required to stake a substantial amount of THETA to maintain network integrity. Guardian Nodes: Community-operated nodes that finalize blocks created by Validator Nodes. Guardian Nodes add a layer of security by preventing a single entity from controlling the network, supporting decentralization and consensus stability. The Ethereum network uses a Proof-of-Stake Consensus Mechanism to validate new transactions on the blockchain. Core Components 1. Validators: Validators are responsible for proposing and validating new blocks. To become a validator, a user must deposit (stake) 32 ETH into a smart contract. This stake acts as collateral and can be slashed if the validator behaves dishonestly. 2. Beacon Chain: The Beacon Chain is the backbone of Ethereum 2.0. It coordinates the network of validators and manages the consensus protocol. It is responsible for creating new blocks, organizing validators into committees, and implementing the finality of blocks. Consensus Process 1. Block Proposal: Validators are chosen randomly to propose new blocks. This selection is based on a weighted random function (WRF), where the weight is determined by the amount of ETH staked. 2. Attestation: Validators not proposing a block participate in attestation. They attest to the validity of the proposed block by voting for it. Attestations are then aggregated to form a single proof of the block’s validity. 3. Committees: Validators are organized into committees to streamline the validation process. Each committee is responsible for validating blocks within a specific shard or the Beacon Chain itself. This ensures decentralization and security, as a smaller group of validators can quickly reach consensus. 4. Finality: Ethereum 2.0 uses a mechanism called Casper FFG (Friendly Finality Gadget) to achieve finality. Finality means that a block and its transactions are considered irreversible and confirmed. Validators vote on the finality of blocks, and once a supermajority is reached, the block is finalized. 5. Incentives and Penalties: Validators earn rewards for participating in the network, including proposing blocks and attesting to their validity. Conversely, validators can be penalized (slashed) for malicious behavior, such as double-signing or being offline for extended periods. This ensures honest participation and network security. |
| Incentive Mechanisms and Applicable Fees | THETA is present on the following networks: theta, ethereum. Theta Network operates a dual-token economy with THETA and TFUEL to support network security, resource sharing, and transactions. Incentive Mechanisms: Staking Rewards THETA Staking: Users can stake THETA by operating Validator or Guardian Nodes, earning TFUEL as staking rewards. This model incentivizes users to contribute to network security and efficiency. Rewards for Resource Sharing Users who share their bandwidth and computing resources by relaying video streams are rewarded with TFUEL. This aligns with Theta’s vision of a decentralized content delivery network (CDN), encouraging broader participation in supporting video streaming and data delivery. Applicable Fees: TFUEL as the Operational Token Transaction Fees: TFUEL is used to pay for transaction fees on the Theta Network, covering smart contract executions and other network interactions. dApp Operations: TFUEL powers data delivery, video streaming, and payments within the Theta ecosystem, supporting operational needs for dApps on the network. Dual-Token Utility THETA serves as the governance token, enabling staking and securing the network through Validator and Guardian Nodes. TFUEL acts as the utility token, driving transaction fees and data delivery services essential to the network’s decentralized video streaming model. Ethereum, particularly after transitioning to Ethereum 2.0 (Eth2), employs a Proof-of-Stake (PoS) consensus mechanism to secure its network. The incentives for validators and the fee structures play crucial roles in maintaining the security and efficiency of the blockchain. Incentive Mechanisms 1. Staking Rewards: Validator Rewards: Validators are essential to the PoS mechanism. They are responsible for proposing and validating new blocks. To participate, they must stake a minimum of 32 ETH. In return, they earn rewards for their contributions, which are paid out in ETH. These rewards are a combination of newly minted ETH and transaction fees from the blocks they validate. Reward Rate: The reward rate for validators is dynamic and depends on the total amount of ETH staked in the network. The more ETH staked, the lower the individual reward rate, and vice versa. This is designed to balance the network's security and the incentive to participate. 2. Transaction Fees: Base Fee: After the implementation of Ethereum Improvement Proposal (EIP) 1559, the transaction fee model changed to include a base fee that is burned (i.e., removed from circulation). This base fee adjusts dynamically based on network demand, aiming to stabilize transaction fees and reduce volatility. Priority Fee (Tip): Users can also include a priority fee (tip) to incentivize validators to include their transactions more quickly. This fee goes directly to the validators, providing them with an additional incentive to process transactions efficiently. 3. Penalties for Malicious Behavior: Slashing: Validators face penalties (slashing) if they engage in malicious behavior, such as double-signing or validating incorrect information. Slashing results in the loss of a portion of their staked ETH, discouraging bad actors and ensuring that validators act in the network's best interest. Inactivity Penalties: Validators also face penalties for prolonged inactivity. This ensures that validators remain active and engaged in maintaining the network's security and operation. Fees Applicable on the Ethereum Blockchain 1. Gas Fees: Calculation: Gas fees are calculated based on the computational complexity of transactions and smart contract executions. Each operation on the Ethereum Virtual Machine (EVM) has an associated gas cost. Dynamic Adjustment: The base fee introduced by EIP-1559 dynamically adjusts according to network congestion. When demand for block space is high, the base fee increases, and when demand is low, it decreases. 2. Smart Contract Fees: Deployment and Interaction: Deploying a smart contract on Ethereum involves paying gas fees proportional to the contract's complexity and size. Interacting with deployed smart contracts (e.g., executing functions, transferring tokens) also incurs gas fees. Optimizations: Developers are incentivized to optimize their smart contracts to minimize gas usage, making transactions more cost-effective for users. 3. Asset Transfer Fees: Token Transfers: Transferring ERC-20 or other token standards involves gas fees. These fees vary based on the token's contract implementation and the current network demand. |
| Beginning of the period | 2024-01-30 |
| End of the period | 2025-01-30 |
| Energy consumption | 734588.08943 (kWh/a) |
| Energy consumption resources and methodologies | The energy consumption of this asset is aggregated across multiple components: To determine the energy consumption of a token, the energy consumption of the network(s) theta, ethereum is calculated first. Based on the crypto asset's gas consumption per network, the share of the total consumption of the respective network that is assigned to this asset is defined. When calculating the energy consumption, we used - if available - the Functionally Fungible Group Digital Token Identifier (FFG DTI) to determine all implementations of the asset of question in scope and we update the mappings regulary, based on data of the Digital Token Identifier Foundation. |
| Renewable energy consumption | 17.204390967 (%) |
| Energy intensity | 0.00029 (kWh) |
| Scope 1 DLT GHG emissions - Controlled | 0.00000 (tCO2e/a) |
| Scope 2 DLT GHG emissions - Purchased | 247.37764 (tCO2e/a) |
| GHG intensity | 0.00010 (kgCO2e) |
| Key energy sources and methodologies | To determine the proportion of renewable energy usage, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivization structure and consensus mechanism. This geo-information is merged with public information from the European Environment Agency (EEA) and thus determined. |
| Key GHG sources and methodologies | To determine the GHG Emissions, the locations of the nodes are to be determined using public information sites, open-source crawlers and crawlers developed in-house. If no information is available on the geographic distribution of the nodes, reference networks are used which are comparable in terms of their incentivization structure and consensus mechanism. This geo-information is merged with public information from the European Environment Agency (EEA) and thus determined. |