VGBP (VGBP) sustainability report

VGBP is present on the following networks: Base, Celo, Solana.

Base operates as a Layer-2 (L2) scaling solution built on the Ethereum blockchain, having been developed by Coinbase using Optimism's OP Stack. Critically, Base L2 transactions do not possess an independent consensus mechanism. Instead, their validation is directly linked to and secured by the underlying Ethereum Layer-1 (L1) network. This is achieved through a specialized component known as a sequencer. The sequencer's role is to aggregate multiple L2 transactions into bundles, which are then regularly published to the Ethereum mainnet as a single L1 transaction.

Consequently, all transactions processed on the Base network are indirectly secured by Ethereum's robust Proof-of-Stake (PoS) consensus mechanism once they are recorded on L1. Ethereum's PoS system, established with "The Merge" in 2022, moves away from energy-intensive mining by requiring validators to stake at least 32 ETH. In this system, a validator is randomly selected every 12 seconds to propose a new block, while other validators on the network are responsible for verifying its integrity. The network employs a sophisticated slot and epoch system, with transaction finality typically occurring after two epochs, which translates to approximately 12.8 minutes, utilizing the Casper-FFG protocol. The Beacon Chain is central to coordinating validators, and the LMD-GHOST fork-choice rule ensures the chain adheres to the path with the most accumulated validator votes. Validators are incentivized with rewards for their participation in proposing and verifying blocks, but face stringent penalties, known as slashing, for any malicious actions or prolonged inactivity. This design choice by Ethereum aims to significantly enhance energy efficiency, security, and scalability, with ongoing and future upgrades, such as Proto-Danksharding, further targeting improvements in transaction processing efficiency, thereby benefiting Base as its foundational security layer. Base specifically leverages Optimistic Rollups as part of the OP Stack, meaning transactions are presumed valid unless challenged within a specified period via fault proofs.

The Celo blockchain network operates on a Proof of Stake (PoS) consensus mechanism, a foundational element supporting its decentralized architecture, robust network security, and a governance model that is strongly driven by its community. Central to this mechanism are the validators, who bear the significant responsibilities of proposing and creating new blocks, meticulously validating transactions to ensure their legitimacy, and continuously upholding the overall security and integrity of the network. These validators are not chosen arbitrarily; their selection is critically dependent on the quantity of tokens they hold and commit to stake. This economic commitment serves as a powerful incentive for honest participation and contributes substantially to the network's reliability and resilience against potential attacks. The PoS design inherently positions Celo as a significantly more energy-efficient alternative when compared to energy-intensive Proof of Work systems, aligning with broader sustainability goals in the blockchain space. Further enhancing its decentralized nature, Celo incorporates a unique decentralized governance structure. This empowers its token holders to actively engage in the network's strategic direction by voting on various proposals and proposed modifications to the protocol. This community-driven approach ensures that the network's evolution is reflective of its user base's collective interests, promoting adaptability and responsiveness. The continuous validation and proposal of blocks by a rotating set of staked validators, whose economic interest is aligned with the network's success, creates a self-sustaining and secure environment. Through this system, transaction finality is achieved efficiently, and the network can scale its operations while maintaining high levels of security and user participation, which are critical for its mission of financial inclusion.

The Solana blockchain architecture operates through a hybrid consensus model that integrates Proof of History (PoH) with Proof of Stake (PoS). This combination is designed to optimize transaction throughput and reduce network latency while maintaining a high degree of security. Proof of History functions as a decentralized clock, using a Verifiable Delay Function (VDF) to create a permanent, timestamped record of events. This cryptographic sequence allows the network to agree on the chronological order of transactions without requiring nodes to communicate extensively, thereby solving traditional synchronization bottlenecks found in other distributed ledgers. Parallel to PoH, the Proof of Stake component manages the selection of validators and the finalization of the ledger state. Validators are chosen to act as leaders for specific blocks based on the total quantity of the native network assets they have staked. Users who do not run their own hardware can participate in network security by delegating their assets to existing validators, sharing in the rewards generated by successful block production. The consensus process begins when transactions are broadcast and collected for validation. A designated leader then generates a PoH sequence to order these transactions within a block. Subsequently, other validators in the network verify the integrity of the PoH hashes and the validity of the transactions. Once a sufficient number of signatures are collected, the block is finalized and appended to the blockchain. This dual approach ensures that the network remains resilient against attacks; validators must provide collateral through staking, and any malicious activity, such as producing invalid blocks or double-signing, can result in the loss of staked assets through a process known as slashing. This economic deterrent ensures that participants remain aligned with the network's health and operational standards.

VGBP is present on the following networks: Base, Celo, Solana.

The Base blockchain, as an Ethereum Layer-2 solution utilizing Optimistic Rollups from the OP Stack, implements incentive mechanisms primarily focused on optimizing transaction costs and ensuring secure asset transfers, leveraging the economic security of its underlying Ethereum L1. A core incentive to use Base is its efficiency in reducing transaction expenses. This is achieved by a sequencer that bundles numerous L2 transactions together, submitting them as a single, consolidated L1 transaction to Ethereum. This process significantly lowers the average transaction cost for individual L2 operations, as the collective L2 transactions share the cost of the single L1 transaction fee, thereby making Base a more economically attractive option compared to direct L1 usage.

For the secure movement of crypto-assets between Base and Ethereum, a specialized smart contract on the Ethereum network is employed. Since Base, as an L2, does not manage its own consensus for fund withdrawals, an additional mechanism is in place to guarantee that only legitimate funds can be moved off the L2. When a user initiates a withdrawal request on Ethereum's L1, a predetermined challenge period begins. During this window, any other network participant has the opportunity to submit a "fault proof" if they detect a fraudulent withdrawal attempt, triggering a dispute resolution process. This entire system is strategically designed with economic incentives to encourage honest behavior and deter malicious activities, although specific details of these economic incentives for fault proof submission are not explicitly outlined beyond the general principle.

Furthermore, Base inherits and benefits from the robust incentive structure of Ethereum’s Proof-of-Stake (PoS) system, which indirectly secures Base transactions. Ethereum validators, by staking a minimum of 32 ETH, are rewarded for proposing and attesting to valid blocks, as well as for participating in sync committees. These rewards are distributed through newly issued ETH and a portion of transaction fees. Under the EIP-1559 fee model, transaction fees comprise a base fee, which is algorithmically burned to manage supply, and an optional priority fee (or 'tip') paid directly to validators. To maintain network integrity, validators face economic penalties, known as slashing, if they engage in malicious conduct or fail to perform their duties. This comprehensive incentive framework ensures strong security alignment for Base by reinforcing reliable validator behavior on its underlying L1.

The Celo blockchain network employs an incentive model designed to both reward network participants and ensure exceptional accessibility, particularly by maintaining minimal transaction fees for crucial use cases like cross-border payments. This strategy fosters a flexible and user-friendly ecosystem. At the core of its incentive mechanisms, validators receive remuneration from a dual-source system: a portion of transaction fees collected across the network, alongside newly minted tokens. This comprehensive reward structure provides a continuous and strong financial incentive for validators to maintain honest operations, diligently validate transactions, and secure the integrity of the network, thereby ensuring its ongoing reliability. Furthermore, Celo prioritizes user experience through flexible transaction parameters. Users can specify a maximum gas limit for their transactions, acting as a safeguard against excessive charges, especially if a transaction encounters an unexpected failure. They also have the option to adjust the gas price, allowing them to prioritize their transactions for faster processing by offering higher fees if urgency is required. A standout feature of Celo is its innovative payment flexibility, enabling transaction fees to be paid not only in its native asset but also in various ERC-20 tokens. This multi-currency payment option significantly enhances accessibility, especially benefiting individuals who may lack traditional banking services or face hurdles in acquiring specific native blockchain tokens. This approach aligns directly with Celo’s mission to extend blockchain technology to underserved global communities. The network's fee structure is intentionally designed to be minimal, making it an ideal platform for low-cost transactions, particularly those involving international transfers. This emphasis on affordability and flexibility underscores Celo's commitment to creating an inclusive and accessible financial infrastructure.

Incentives within the Solana blockchain network are structured to ensure high performance and decentralized security. The primary participants are validators and delegators, both of whom receive financial compensation for their roles in maintaining the ledger. Validators are rewarded for successfully producing and verifying blocks. These rewards are distributed in the network's native asset and are determined by the validator's overall stake and historical performance. Furthermore, validators receive a portion of the transaction fees associated with the data processed in their blocks, which encourages them to maximize efficiency and maintain uptime. Token holders who prefer not to operate complex infrastructure can delegate their stake to professional validators. This delegation model facilitates a more inclusive security environment, as delegators earn a percentage of the rewards proportional to their contribution, thereby decentralizing the control of the network. Security is further enforced through economic penalties. The network employs a slashing mechanism where a portion of a validator's staked assets is confiscated if they engage in dishonest behavior or fail to meet network requirements, such as remaining offline for extended periods. This introduces an opportunity cost for all participants, ensuring they remain committed to honest operations. Regarding the cost of using the network, the fee structure is designed to be highly competitive and predictable. Users pay transaction fees to compensate for the computational power and bandwidth consumed by nodes. These fees are notably low, facilitating high-volume usage. In addition to transaction costs, the network implements rent fees for data storage. This unique mechanism charges for the persistence of data on the blockchain, discouraging the inefficient use of state storage and prompting developers to prune unnecessary data. Finally, smart contract execution fees are calculated based on the specific resource intensity of the code, ensuring that participants pay a fair rate for the network resources they utilize.

VGBP is present on the following networks: Base, Celo, Solana.

The energy consumption calculation for the Base blockchain network is meticulously performed using a "bottom-up" approach, where individual nodes are identified as the primary contributors to the network's overall energy footprint. This methodology is based on empirical data collected from a variety of sources, including publicly available information sites, dedicated open-source crawlers, and proprietary in-house crawling tools. The fundamental aspect of estimating hardware usage within the network involves determining the minimum requirements necessary to operate the client software. The energy consumption profiles of the specific hardware devices identified are obtained from measurements conducted in certified test laboratories, ensuring a high degree of accuracy in these foundational figures.

In the process of calculating network energy consumption, the Functionally Fungible Group Digital Token Identifier (FFG DTI) is utilized when available, serving to identify and encompass all relevant implementations of a crypto-asset within the scope of analysis. These mappings are regularly updated, drawing on data provided by the Digital Token Identifier Foundation. However, the source documents do not provide specific URLs for the public information sites, open-source crawlers, or the Digital Token Identifier Foundation, preventing direct external linking within this summary.

The methodology also incorporates assumptions regarding the hardware deployed and the number of participants operating within the network. These assumptions are rigorously verified with "best effort" against empirical data to ensure their realism and accuracy. A key underlying principle is the assumption that network participants generally act in a "largely economically rational" manner. Furthermore, to adhere to a precautionary principle, conservative estimates are applied in situations of uncertainty, leading to higher projected impacts to mitigate underestimation risks. For a specific token on Base, a fraction of the network’s total energy consumption is attributed, based on the token's activity within the network.

The methodology for calculating the Celo blockchain network's energy consumption primarily utilizes a "bottom-up" approach. This detailed methodology considers network nodes as the central and most significant factor contributing to the overall energy footprint. The underlying assumptions of this calculation are derived from extensive empirical findings, gathered through a combination of publicly available information sites, advanced open-source crawlers, and proprietary in-house developed crawling tools. A key determinant in estimating the hardware deployed within the network is the specific computational requirements necessary to operate the client software. To ensure accuracy, the energy consumption of these various hardware devices is meticulously measured in certified test laboratories. In this calculation framework, the Functionally Fungible Group Digital Token Identifier (FFG DTI) is employed, whenever available, to comprehensively identify all relevant implementations of the crypto-asset within scope. These mappings are consistently updated to reflect the latest data provided by the Digital Token Identifier Foundation, ensuring the most current and accurate representation. Information pertaining to the types of hardware used and the total number of participants in the network relies on assumptions. These assumptions are rigorously verified through best-effort empirical data analysis. Generally, network participants are presumed to act in an economically rational manner. Adhering to a precautionary principle, in situations of uncertainty, estimations for potential adverse impacts are always biased towards higher, more conservative figures. While specific token energy consumption may aggregate data from multiple networks where the token is active, the core methodology for determining a network's energy consumption remains consistent with this node-centric, bottom-up framework.

To calculate the energy consumption of the Solana blockchain network, a "bottom-up" methodology is utilized, placing the network nodes at the center of the analysis. This approach relies on identifying the number of active participants and the specific hardware requirements necessary to run the network's client software. Data collection involves a variety of sources, including open-source web crawlers, internal monitoring tools developed by the legal entities, and public information websites. By analyzing these data points, researchers can estimate the hardware profiles of the various nodes operating globally. To ensure accuracy, the energy consumption of typical hardware devices is measured within certified laboratory environments, providing a baseline for the power usage of each node. Furthermore, the methodology incorporates data from the Digital Token Identifier Foundation to map all implementations of the assets within the network's scope. When specific hardware data is not directly observable, assumptions are made based on the principle of economic rationality, assuming participants optimize their setups for cost-efficiency while meeting software specifications. In instances of uncertainty, a precautionary principle is applied, favoring conservative estimates that likely overstate the environmental impact rather than underestimating it. This ensures that the reported energy footprint represents a credible upper bound of actual consumption. The total network consumption is determined by aggregating the energy needs of all identified nodes, accounting for both the computational requirements of processing transactions and the energy consumed by hardware in an idle or supportive state. This rigorous framework allows for a comprehensive assessment of the network’s total power requirements over a defined reporting period, providing a transparent view of the operational costs associated with maintaining the distributed ledger's infrastructure.

VGBP is present on the following networks: Celo, Solana.

The determination of key energy sources and the proportion of renewable energy utilized by the Celo blockchain network involves a structured and multi-faceted methodology. The initial critical step is to accurately identify the geographical locations of the network's operational nodes. This identification process leverages a variety of data sources, including readily available public information sites, sophisticated open-source crawlers, and proprietary in-house developed crawlers, all working in concert to pinpoint the physical distribution of the network infrastructure. In scenarios where precise geographical information regarding the nodes is not sufficiently available, the methodology resorts to using reference networks. These chosen reference networks are carefully selected based on their structural comparability, specifically in terms of their incentive mechanisms and underlying consensus protocols, ensuring that the energy profile is as relevant as possible. Once geographical data is established, whether directly or through reference, this information is then meticulously merged with comprehensive public data sets provided by Our World in Data. This integration allows for a contextual understanding of the energy mix and renewable energy penetration in the regions where Celo's nodes are operational. A crucial metric derived from this analysis is the energy intensity, which is precisely calculated as the marginal energy cost associated with processing one additional transaction on the network. This provides a granular insight into the energy efficiency per unit of activity. For further details on the underlying data sources concerning renewable electricity generation, interested parties can refer to the comprehensive datasets compiled by Ember and the Energy Institute, accessible via Share of electricity generated by renewables - Ember and Energy Institute. This meticulous approach ensures a transparent and empirically grounded assessment of the network's energy profile.

The determination of energy sources for the Solana blockchain network involves a sophisticated geolocation mapping of the global node infrastructure. By utilizing internal and open-source crawlers, the physical locations of validator nodes are identified. Once the geographic distribution is established, this information is cross-referenced with regional energy data to calculate the percentage of renewable energy utilized by the network. For regions where specific node data is unavailable, researchers utilize reference networks that share similar consensus mechanisms and incentive structures as proxies to estimate the geographic spread of the infrastructure. The primary data source for these regional energy profiles is the Share of electricity generated by renewables dataset provided by Our World in Data, which incorporates research from Ember and the Energy Institute. This dataset provides yearly electricity data that allows for a granular assessment of how much of the network's power is derived from wind, solar, hydro, and other renewable sources. In addition to the total percentage of green energy, the methodology focuses on energy intensity, which is defined as the marginal energy cost required to process a single additional transaction on the network. This figure helps quantify the efficiency of the blockchain's resource usage relative to its utility. By integrating global energy statistics with real-time node distribution data, the network can report a more accurate picture of its sustainability, currently indicating that a significant portion of its operational energy comes from renewable sources, reflecting the broader global transition toward cleaner power grids.

VGBP is present on the following networks: Celo, Solana.

The methodology for assessing the key Greenhouse Gas (GHG) sources and calculating emissions for the Celo blockchain network mirrors the rigorous approach applied to energy consumption analysis. A fundamental step involves precisely identifying the geographical locations of the network's nodes. This process relies on a combination of publicly accessible information sites, advanced open-source crawling tools, and specialized in-house developed crawlers designed to map the physical footprint of the network. Should direct geographical data for all nodes be unavailable or insufficient, the methodology wisely employs a strategy of leveraging reference networks. These alternative networks are carefully chosen for their strong comparability in terms of both their incentive structures and their core consensus mechanisms, ensuring that the environmental impact assessment remains pertinent. Following the collection of geographical data, whether directly or through comparative analysis, this information is integrated with extensive public data available from Our World in Data. This integration is essential for contextualizing the carbon footprint in relation to the energy sources used in the identified locations. The GHG intensity of the network is then determined, calculated as the marginal emission produced for each additional transaction processed. This metric offers valuable insight into the environmental impact per unit of network activity. For detailed information regarding the carbon intensity of electricity generation, a primary source for this data, stakeholders can consult the relevant datasets published by Ember and the Energy Institute, which are available through Carbon intensity of electricity generation - Ember and Energy Institute. This methodology ensures a comprehensive and transparent evaluation of the network's environmental performance concerning GHG emissions.

Quantifying the greenhouse gas (GHG) emissions of the Solana blockchain network requires a methodology focused on carbon intensity and the geographic footprint of its decentralized nodes. Similar to the energy source analysis, the process begins by locating active nodes using a combination of public data and specialized web crawling technology. This geographic information is critical because the carbon footprint of electricity varies significantly between different jurisdictions depending on their local power generation mix. For nodes that cannot be precisely located, the analysis uses data from comparable blockchain networks to ensure the estimation remains as complete as possible. The carbon intensity of the electricity used by these nodes is derived from the Carbon intensity of electricity generation dataset, accessible via Our World in Data. This dataset, which is licensed under CC BY 4.0, provides essential metrics on the amount of CO2 equivalent emitted per kilowatt-hour of electricity produced in various countries. By merging node locations with these carbon intensity values, the network can calculate its Scope 2 emissions, which represent the indirect emissions from the generation of purchased electricity. The methodology also focuses on GHG intensity, measuring the marginal emissions generated by one additional transaction on the blockchain. This allows for a performance-based assessment of the network's environmental impact. The results are typically reported in tonnes of CO2 equivalent (tCO2e), providing a standardized metric that allows for comparison with other industries and financial systems. This data-driven approach ensures that the network’s environmental disclosures are rooted in empirical global energy statistics and verifiable infrastructure data.