DeFi to ReFi: Essentials of Regenerative Finance Development

They might also be more hesitant to take big career risks, or prefer to focus on working for established refi crypto tech companies rather than experimental startups. In this article, we’ll explore the basics of ReFi and look into what it can mean for individuals and businesses. The Top 50 North American Crypto VC firms by fund size and investment activity — plus the top news, stats, and reports of the week. FTX Founder Sam Bankman-Fried arrested, testimony he planned to give to Congress leaked, SEC announces charges, plus big raises for Nillion and Evertas, and the top stats and reports of the week.

Bringing blockchain to the VCM – A Gold Standard perspective

Non-fungible tokens https://www.xcritical.com/ (NFTs) can be used to create verifiable and immutable records on the blockchain for these artifacts, making them an unchangeable part of history. Celo is scaling Ethereum with real-world solutions, leading a thriving new digital economy for all. Universal basic income, or UBI, is a system where everyone is given a set amount of money on a regular basis. It’s conditionless and available to anyone, regardless of their background, education, nationality, or income.

• These ecosystems facilitate the flow of capital into projects that restore natural resources, enhance biodiversity, and promote social equity.
• ReFi has established itself as a viable approach to addressing climate change and income inequality, with real-world impact and innovative financial solutions.
• The voluntary carbon market (VCM)(opens in a new tab) is a mechanism for funding projects that make a verified positive impact on carbon emissions, either reducing ongoing emissions, or removing greenhouse gases already emitted from the atmosphere.
• Seed Club is a Vancouver-based incubator & accelerator DAO focussed on helping eco-conscious groups set up DAO structures to carry out their good work.
• This commitment to security not only protects users and their assets but also builds trust within the DeFi community.
• The current cryptocurrency Market Capitalization Dominance among all other cryptocurrencies in the market.

Coinstack – For Smart Crypto Investors – Bitcoin, Ethereum, DeFi & The Future of Money

This directly reflects the incredible innovation within the space, which itself is growing drastically. However, oftentimes the incentives for doing so are less than altruistic – ‘greenwashing’ has become prevalent. That is the act of emphasising the sustainability of a business’s products and services (even if they aren’t sustainable at all) to capitalise on consumer trends around environmentalism and gain a competitive advantage. The traditional financial markets have long been modelled on the extraction of value and exploitation of people – empowerment for the few whilst relying on the labour of many.

Direct Contribution to Environmental Restoration

We’ll explore the basics of ReFi, and look into what it can mean for individuals and businesses. While early, tokens represent an alternative method to NFTs as a way to access positive impact projects through crypto. Not only that, but blockchain also removes the potential for duplicity and improves the transparency of carbon credits—a problem that plagues the carbon markets. As a result, forests, oceans, and other natural resources can be valued according to the amount of carbon they capture. For example, the higher the price per ton of carbon, the more attractive it becomes to get into the business of planting new forests (and deriving income from carbon credits) instead of cutting down the trees for timber. While DeFi and ReFi have different primary focuses, they can synergize for powerful decentralize applications development.

Focus on Sustainability and Impact

Web3 applications span a wide range of areas, from democratic digital governance systems to decentralized applications (dApps) for financial and other services. There are digital public goods, such as currency exchanges that aren’t owned or controlled by a company, and even a variety of metaverses and digital games where you can seamlessly move your assets from one virtual world to the other. The Regenerative Finance movement is emerging as one potential way to address many problems of our time. People are becoming more and more aware of issues of inequality, exploitation, and unsustainable industrial practices.

Degenerative, Regenerative or Sustainable?

This week we cover the SEC probe of Coinbase, CFTC’s stunning press release criticizing the SEC, Voyager’s rebuff of the FTX bailout, Aptos’ big $150M raise, the raid on a Terra co-founder’s house, and the top 25 crypto VCs by investment volume. At the time of writing, its community has “adopted” 3,187 animals, planted 18,300 IRL trees, and created 183 employment workdays for real people on the ground. Several metaverse applications aim to make carbon reduction and environmental restoration fun and accessible in a virtual setting. Infrastructure tools are loosely defined as data products, protocols, and adjacent tooling that support carbon suppliers and core blockchains in distributing carbon to the application layer.

Conventional & regenerative economic systems

DeFi’s infrastructure can provide the foundation for ReFi project development, enabling efficient, transparent, and secure transactions. The liquidity and accessibility offered by DeFi can support ReFi initiatives by providing the necessary financial resources for sustainable projects. Encouraging partnerships between various sectors, including public institutions, private companies, and non-profit organizations, amplifies the impact of ReFi initiatives.

The Convergence of ESG Investing and Blockchain Technology

In episode 86, we welcome John Ellison, Co-Founder of ReFi DAO, a founder-led start-up community on a mission to accelerate impact for people and planet. Communities can create local currencies to ensure that economic activity can flow within their local community, and to promote values they care about. With carefully designed rules, funds are circulating to regenerate and fuel the local economy, and to help satisfy the needs of individuals, instead of being solely used as a tool to derive profit.

Regenerative Finance (ReFi)Coins by Market Cap

Smart contracts are self-executing programs with the specific terms written into a code. For instance, they ensure that funds are only released when specific sustainability criteria are met. This cuts out the middlemen, lowers the cost of transactions, and makes it easier to get sustainable projects off the ground. ReFi represents a visionary concept that leverages blockchain technology to pave the way for regenerative economies. Rooted in the principles of regenerative finance, this initiative seeks to divorce the generation of monetary value from the unsustainable exploitation of our planet and local communities. Describing their activity as ‘DeFi that defies climate change’, KlimaDAO have set up their own cryptocurrency token called KLIMA which is backed by real-world carbon assets.

As ReFi continues to evolve, we can expect to see more and more innovative and impactful projects emerge and bring the benefits of blockchain technology to the real world. Early uses of ReFi include designing novel ways to fund public goods (like open source software) and tokenizing environmental assets (like carbon credits) so they could be used in DeFi applications (like DEXes). The exchange of value within communities and economies is fundamental to how our world operates. Digital tools like blockchains are giving us advanced ways to design and reprogram value exchange mechanisms and money flows, and let us include what we value in our financial systems. Built with open code on decentralized public blockchains, DeFi offers a more democratic, transparent and, in many ways, secure alternative to traditional finance.

Once MRV is completed, these carbon credits are issued by agencies such as Verra and CAR, among others, and sold via brokers, eventually making their way to buyers. At its most fundamental level, ReFi is the idea of appraising the value of natural resources—not based on the cash flows from their exploitation but rather on their preservation and regeneration. By the end of this read, I hope you, too, become optimistic about the power of crypto to make a dent in climate change. The most active and popular exchanges for buying or selling REFI are Binance, Kucoin & Kraken.

As DeFi continues to evolve, this system has the potential to revolutionize the way we think about and interact with money. As Web3 continues to evolve, we expect to see more innovative and impactful projects emerge, to bring the benefits of blockchain technology to the real world. Blockchains directly connect users and developers around the world with each other, allowing them to exchange goods, services, information, and digital assets.

As with any Web3 cryptocurrency project, regenerative finance projects can be used in scams. There are always risks when investing in alternative assets such as crypto; regenerative finance isn’t immune to these. Despite the bad rap that web3 has gotten when it comes to the environment, there are many projects and collectives with a focus on the environment that are taking tangible action to support regenerative projects and combat climate change. Here, we highlight 20 of these innovative mission-driven web3 projects focusing on the environment. Public goods are available to everyone — things like parks, clean air, or free education. There are real-world public goods, like the ones we mentioned, but also digital public goods — specifically free and open source software, open datasets and open source standards.

Transitioning the VCM to the new blockchain-based digital carbon market (DCM) might be an opportunity to upgrade the existing technology for validating, transacting and consuming carbon credits. Blockchains allow for publicly verifiable data, access for a broad range of users, and more liquidity. ReFi projects realize these principles using and applications to incentivize regenerative behaviors, e.g. restoring degraded ecosystems, and facilitate large-scale collaboration on global issues such as climate change and biodiversity loss. Because with the trend comes a growing need to address the climate change we are experiencing. ReFi also offers a reasonable financial return for the projects it offers, and its use cases include real-world applications.

ReFi rails can be programmed to fairly reward key actors and redirect resources to those who need them most while holding all participants publicly accountable. The entire system prioritizes fairly distributed, sustainable, and equitable prosperity. This includes reducing carbon emissions, supporting renewable energy projects, promoting sustainable agriculture, and improving social equity.