> For the complete documentation index, see [llms.txt](https://docs.mentholprotocol.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.mentholprotocol.com/concepts/automatically-measure-your-on-chain-climate-impact/how-does-it-work.md). # How does it work? The part of the holding-based approach may be calculated by dividing the holding volume by the overall value of the network, potentially adjusted for lost coins2 . For the transaction-based part, we would need to differentiate between PoW and PoS. In PoW, we may aim at the monetary incentives caused by transactions. To do so, we may attribute emissions of one transaction to the share of its transaction fees. For PoS, we may aim at transaction complexity; that usually stems from a form of gas consumption (e.g., in Ethereum). That seems realistic to us, as more complex transactions (e.g., executing Smart Contracts) are more computationally expensive than other transactions. We suggest not to focus on the monetary value a transaction processes. We are not aware that either in PoW or PoS, the value directly influences the incentives of the miner and therefore on the energy consumption of the network. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://docs.mentholprotocol.com/concepts/automatically-measure-your-on-chain-climate-impact/how-does-it-work.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.