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⛽️ NFT Energy Use Prompts Outrage
Hello Defiers! Here’s what we’re covering today,
NFT energy consumption causing outrage
Lindsay Lohan is memeing herself to NFT fame
DAI is getting a quick bridge to Optimism
UMA and Yam Finance partner to create uSTONKS
and more :)
🙌 Together with:
Zerion, a simple interface to access and use decentralized finance
Balancer, an asset manager and decentralized exchange built on Ethereum
Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi
Casper, an enterprise-focused blockchain which aims to introduce unprecedented security, speed and scale for businesses
TLDR Blockchain mining is very energy-intensive, and by extension, so is minting NFTs. This is causing outrage among some artists and critics, with at least one creator canceling an NFT drop.
WHAT’S THE DAMAGE The skull NFT below has consumed the same amount of energy as an EU resident’s electricity consumption for 3 weeks or a laptop’s energy consumption over the course of 1.5 years, according to metrics on CryptoArt.wtf, a website launched in December by computational artist and engineer Memo Akten.
Based on this data, Akten determined that the average NFT transaction had a bloated footprint of 76kWh, and taking all of the transactions related to a single NFT into account, the average NFT had a footprint of around 340 kWh (or “an EU resident’s total electric power consumption for more than a month”).
PROOF OF WORK Akten also noted that these costs are entirely reflective of the energy consumption for using a Proof-of-Work (PoW) blockchain, without taking the energy cost of creating any of the original artwork into account. He suggests Proof of Stake (PoS) blockchains like ETH2 and Polkadot as an alternative, which grants and limits mining power based on the proportion of coins held by a miner instead of based on who has the fastest computer, and is therefore far more energy efficient.
CANCELLING THE DROP Recently, the NFT climate impact debate boiled over on social media after artist Joanie Lemercier announced that he would be canceling his second cryptoart drop on Nifty Gateway (her first 53-edition drop sold out in about 10 seconds) due to the projected energy consumption. After going through the details of her transactions with Offsetra, a carbon offset company, Lemercier determined that his first Nifty Gateway drop “consumed in 10 seconds more electricity than [his] entire studio over the past 2 years.”
NOT ABOUT NFTS Following Lemercier’s post, the SuperRare team wrote an article on Medium responding to the assertion that NFTs have a disproportionate ecological impact on Ethereum’s carbon footprint. While SuperRare recognizes that Ethereum is energy-intensive, they assert that Ethereum’s energy consumption is fixed at any given point in time, and that the network’s energy consumption isn’t affected by the quantities or types of transactions taking place.
“In other words, if everyone took a break from using Ethereum apps and no transactions were sent for a whole day, the carbon emissions of the network would essentially stay the same,” they wrote.
BOTTOM LINE PoW blockchains are massive energy guzzlers, and until more energy-efficient solutions like PoS are more widespread, everyone who participates in the Ethereum space is taking part in that consumption. That’s not to say that people shouldn’t use blockchain or enjoy NFTs, but rather that we should all be looking towards green scalability solutions as the next stop forward.
PieVaults are industry-first index products that actively use the underlying assets to generate yield across DeFi protocols in a set-and-forget fashion.
PieDAO just migrated their large-cap index $DeFi+L to a PieVault architecture, unlocking native staking, lending across Aave, Cream and Compound, and much more. $UNI, $YFI, $LINK, $SNX, $MKR, $COMP, $SUSHI and $AAVE are all included, giving you exposure to the biggest DeFi players with minimum gas and zero effort.
If you want to get hold of the most balanced crypto index on the market, grab $BCP, which includes the yield-bearing $DeFi+L PieVault, as well as $BTC, $ETH, and $DeFi+S (high-growth, smaller market cap projects).
TLDR In case you needed further proof that NFTs are going mainstream: the latest NFT artist uploading tokens to Rarible is Mean Girls star Lindsay Lohan. Not only that, but her Bitcoin to the Moon piece is going for 24 ETH, or around $44k.
MEME MAGIC The “Bitcoin to the Moon” NFT, is another sign that traditional fundamentals are being replaced with “hype” and “meme magic.” And, to be clear, the meme power of Lindsay Lohan’s “Bitcoin to the Moon” NFT is off the charts. Lindsay Lohan is one of the most recognizable teen icons of the 2000s, and here she is selling a poorly drawn, shoddily folded picture of her and Bitcoin Herbie in space.
This NFT is the closest thing we’ve ever seen to “objectively funny.” 24 ETH may very well be a steal.
TLDR MakerDAO will soon launch a feature which may solve the biggest UX hangup of the Optimistic layer 2 (L2) scaling solution. The feature will allow users to move not only DAI, but eventually any Ethereum asset, off Optimism and to layer 1 (L1) within minutes. Considering the previous withdrawal wait period of one week, the development is a major step forward in the usability of optimistic rollups.
WORK-AROUND Optimitic’s current design allows for near-instant transfers to its L2, but transferring back to L1 takes a week because the solution necessitates waiting for fraud proofs, which check whether all the transactions on L2 were legitimate before integrating the changes of state into L1. The new bridge promises to solve the problem by facilitating what is essentially a week-long loan of DAI coming in the form of a token called fDAI.
TLDR Degenerative Finance has launched uSTONKS, a synthetic that tracks the ten most bullish Wall Street Bets stocks. The project is a collaboration between Yam Finance and UMA protocol, and is intended to function as a DeFi proxy for hype on Reddit’s WSB. Users who mint and provide liquidity during the first three weeks will receive bonus $YAM and $UMA.
TLDR Proposals for merging Keep and Nucypher are live on both projects’ forums. The potential merge is the first of its kind in that it will produce a third network, a DAO governed by stakers of each projects’ respective tokens, KEEP and NU.
ADDITIONAL NODES tBTC, one of the most decentralized versions of BTC on Ethereum, which currently runs on Keep infrastructure, would benefit from NuCypher’s additional 2,000 nodes.
🔗 Zaki Manian’s Sommelier Finance Raises $3.5M to Help DeFi Investors Avoid Impermanent Loss: CoinDesk
“Startup Sommelier Finance released a mainnet version of its “Ethereum Coprocessor” Wednesday, a tool for automating coins’ rotations in-and-out of DeFi positions,” CoinDesk reported. “To that end, Sommelier raised $3.5 million in a seed round joined by Standard Crypto, Multicoin Capital and Alameda Research in return for an undisclosed amount of SOMM tokens. Manian said the funds will be used for additional staffing and implementation of the protocol.”
✊ Head to THEDEFIANT.IO for more DeFi news 📰
🧑💻 ✍️ Stories in this newsletter were written by Owen Fernau and Dan Kahan, and edited by Camila Russo. Videos were produced by Robin Schmidt and Alp Gasimov.
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