The Seattle Kraken are entering the non-fungible token space, proudly boasting on Monday that "NFT's are coming to The Deep."
The expansion NHL club is far from the first sports entity to become involved in NFTs. But the Kraken have drawn ire for it in ways others haven't. That's because the team plays its home games at Climate Pledge Arena, named for its mission to become “The World’s First Net Zero Carbon Arena,” and are committed to limiting their negative impact on the environment.
And NFTs are commonly the antithesis of that statement.
Kraken enter NFT space
The Kraken announced an "extremely limited drop" featuring five different NFTs that will go live in one week and close three days later. One NFT will include in-person perks including watching pre-game warm-ups from the penalty box, box seats and an autographed jersey.
The team is using Orange Comet to host its NFT exchange. There's a Kraken pack "Captain's Box" like a treasure box found in the sea and an option to participate in the reveal of the team's mascot. The evolving NFT is available to 32 fans who will be able to see "mysterious hints of the Kraken mascot." When the team unveils its mascot officially, the NFT evolves to show the complete mascot.
The announcement was met with pushback from fans upset that the franchise doesn't appear to be abiding by its own sustainability goals.
NFTs and climate change
NFTs are pieces of digital artwork that have a unique string of code and are stored on a blockchain, a decentralized, public ledger used in cryptocurrency.
But digital does not mean environmentally friendly. NFTs require "mining" to create the item and add it to the ledger. Mining involves complex puzzles and requires immense computing power that itself requires immense amounts of energy and emits large amounts of greenhouse gases. The big companies, like Bitcoin, require "proof of work" that uses up all this energy.
To successfully add an asset to the blockchain’s master ledger, miners must compete to solve a cryptographic puzzle, their computers rapidly generating numbers in a frenzied race of trial and error. As of mid-April, miners were making more than 170 quintillion attempts a second to produce new blocks, according to the trading platform Blockchain.com. (A quintillion is 1 followed by 18 zeros.)
Studies estimate harsh impacts from the efforts. One estimated that the creation of one NFT is equivalent to driving 500 miles in an American gasoline-powered car. Another that mining Bitcoin uses more electricity than countries such as Argentina, Sweden or Pakistan. And as interest grows, more people start mining and those numbers continue to skyrocket.
Kraken commit to positive environmental impact
At the very end of the Kraken's release is an "about our blockchain" section that ends with: "I've heard rumors that NFT's use up too much electricity and emit a lot of carbon into the environment. What are you doing about the environmental impact of the Orange Comet NFT collection?"
The Kraken's answer is the following:
Orange Comet feels that it is essential that all blockchain transactions become NET-ZERO and the easiest way of doing this is platform by platform rather than individual offsetting. All Orange Comet front end servers are renewable energy powered by wind farms. Our Partnership with the Avalanche Blockchain, which is a Net Zero blockchain, allows Orange Comet to fulfill its commitment to running on green servers and building a carbon-negative solution for NFT collecting. 🌿
Orange Comet is a mining system that uses renewable energy sources. Per an April study by Columbia University, about 39% of bitcoin mining is done by renewable sources.
Some companies competing with the major Bitcoin and Ethereum operations are using a "proof of stake" method that is less energy intensive, per Time. And as brands and businesses request carbon neutrality in their NFTs, operations are more likely to abide by it to make the deal happen. Artists are also making the request.
It is possible for NFTs to become more environmentally friendly, as Time outlines. And the Kraken are promoting that at the very least the impact can be partially offset if a company is committed to that.