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Additionally, 3D printing digital files that could be used to create a replica of the original artefact could be backed by NFTs and stored on the blockchain. Indigenous artists could use NFTs to sell their artwork, set their own appropriate pricing, not rely on the fleeting whims of tourists, and get paid in cryptocurrency secured on the blockchain. Smart contracts could be https://www.xcritical.com/ built into these NFTs so that the original creator stands to make continuous income upon each resale.
What Is an Example of Regenerative Finance?
Women and people from developing countries often hesitated or were not able to access what is regenerative finance education that provides the technical skillset to participate in this new industry. They might also be more hesitant to take big career risks, or prefer to focus on working for established tech companies rather than experimental startups.
Industrial Economic Theory: A Story of Extraction
In the financial industry, environmental issues (Environment), social aspects (Social), and responsible corporate governance (Governance) have played a central role for several years. The ESG criteria are used to assess the sustainability of a company and can be taken into account when making investment decisions. For a long time, economists have been thinking about how to systematically embed care for our planet and for communities into the way our world works, and studying how financial policies affect social and ecological well-being. Regenerative economic theories look into improving the well-being and health of communities and nature by addressing issues like poverty, inequality, and environmental degradation. Regenerative Finance (often shortened to ReFi) is a transparent, accessible, and inclusive alternative to traditional financial systems.
WELCOME TO THE AGE OF REGENERATIVE FINANCE (REFI)
Organizations that are built on the idea of open participation and equitable distribution of resources empower everyone to funnel money to open-source software projects, as well as educational, environmental, and community-driven projects. The emergence of the ReFi movement is timely, addressing contemporary challenges like the climate crisis, inequality, and unsustainable industrial practices. Traditional economic models often lack the incentives for global coordination to address these issues. By focusing on projects that prioritize sustainability and benefit underserved communities, ReFi has the potential to bridge the financial divide that plagues many regions.
This system was shaped by free market forces without sustainability in mind, and many issues the world faces now are consequences of this unbalanced, self-perpetuating paradigm. While cryptocurrency gives the underlying capacity to restructure this system and rebalance wealth distribution more fairly, it still has its drawbacks when it comes to certain issues. One of the largest exchanges in the world, FTX, went bust and its owner was brought up on fraud charges.
If you haven’t read yet Part I of this exploration on “What is Regenerative Finance? (ReFi)”, read this first as you will get a clearer picture on its origins and foundations. Suffice here to remember that ReFi is based on the theory of regenerative economics and is leveraging Web3 to address climate justice and equity. If there’s to be a significant reverse of climate change and the addressing of other socio-economic problems such as poverty, it should start with rethinking the current system of global economics.
These computer programs can run and maintain different financial products such as single and joint bank accounts, lending services, or currency exchanges. Anyone can add new smart contracts to an open blockchain like Ethereum, and these new smart contracts can freely interact with everything that’s already there. Developers can create applications and services that expand on existing ones, which unlocks unbridled innovation, and ultimately benefits the entire ecosystem. However, just because a crypto project labels itself “regenerative,” it doesn’t mean it’s a good investment.
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. Regenerative Finance, or ReFi, is an experiment to create financial incentives to draw down carbon emissions, “regenerate” the environment and ultimately reverse climate change. 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).
Other forms of technology — from phone services and traffic signals to air conditioning units — have also been targets for brazen thieves looking for metal to trade for quick cash. A potentially under-reported aspect of ReFi is the possibilities that Web3 unlocks for the enfranchisement of indigenous communities around the world. 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. KLIMA token holders benefit from rewards from the KlimaDAO just by virtue of their token holdings when others buy into the organisation. There is then an incentive to invest and hold tokens, which in turn helps to reduce carbon dioxide in the atmosphere – a pure manifestation of ReFi in action.
Find out more about the collective impact initiative “Regen Living”, regenliving.eco, to be part of a global network of regenerators changing the world through place-based regenerative projects. Voluntary carbon markets enable carbon emitters to compensate for their emissions. These credits are generated by projects that aim to mitigate or reduce greenhouse gas levels in the atmosphere. While early, tokens represent an alternative method to NFTs as a way to access positive impact projects through crypto. Built with open code on decentralized public blockchains, DeFi offers a more democratic, transparent and, in many ways, secure alternative to traditional finance. As DeFi continues to evolve, this system has the potential to revolutionize the way we think about and interact with money.
He referred to the new investment style as regenerative because it pulled resources into projects that mimicked operations of nature to recycle energy and matter. All the groups and projects forming around ReFi are tackling the conspicuous issues posed by climate change, the accelerating loss of biodiversity, disparities in wealth, political instability, or pandemics. One of the core instruments in doing that is redesigning money itself in a way that writes a new story for what it actually means to be an integral human being living on a shared planet.
- Smart contracts could be built into these NFTs so that the original creator stands to make continuous income upon each resale.
- These cherished cultural icons can be digitised and tracked with ease on the blockchain and verified by members of the community.
- But, on the flip side, blockchain technology makes it easier than ever to launch diverse remote-only teams with members from all parts of the globe, or to contribute to decentralized organizations.
- 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).
- For example, ReFi projects may implement KYC measures and screen users, instead of being completely permissive and open.
- The obvious use case is to take the tokenized carbon itself and send it directly to the existing buyers’ market (large enterprises).
Explore how ReFi catalyzes this era of regenerative innovation and collaboration. The principles and practices of ReFi provide a stark contrast to those of Traditional Finance (TradFi). While both models share the aim of facilitating economic transactions and growth, their methodologies, guiding philosophies, and ultimate objectives often diverge significantly. These solutions are the beginnings of the foundation for the alternative financial system that underpins ReFi’s existence.
It helps people work holistically with complex living systems, exploring key life-giving elements and their relationships across scales. Trough this process, key life-giving patterns emerge that provide the basis for regenerative development concepts and designs specific to a place. ReFi can be considered the real-world, Web3 application of Regenerative Economics theory. The ReFi movement aims to deliver on two core principles – the long-term generation of value for all, and the conservation/restoration of natural resources. Web3 and blockchain technology have opened up numerous finance opportunities, initiatives and instruments over the past decade. Cryptocurrency is now a mainstream topic and adoption continues to grow across the globe – enabling people to operate outside of the traditional financial system.
Everyone can leverage ReFi’s digital infrastructure to coordinate and pool resources across borders, design products that serve key needs for local communities, or build services that accelerate climate action. Web3 is a movement that has emerged over the last years, and it is far more than the evolution of the internet. We classify Web3 as a set of design principles that are adopted by a strong community of individuals around the globe. Web3 aims to build user-centric digital spaces and services that are accessible to everyone, regardless of their background, nationality, or other factors.
The obvious use case is to take the tokenized carbon itself and send it directly to the existing buyers’ market (large enterprises). Blockchain technology can streamline the issuance and liquidity side of carbon and make it more equitable for all parties involved. The process of linking carbon project developers with MRV and ultimately the buyer is incredibly complex, bottle-necked, and mired with transparency and duplicity issues. The industrial economic theory works perfectly when Land, Labor, and Capital are present, but the cycle of prosperity breaks when Land no longer exists. More resources mean faster economic growth and, ideally, a better quality of life for everyone. Fossil fuels get plenty of flack, but they’ve been an undeniable miracle for humanity.
As such, ReFi as a whole must act to prevent the pervasive “greenwashing” or carbon tunnel vision depicted below. For a systemic regenerative solution to be fully holistic, carbon emissions and markets need to be only one of many variables included. And with regenerative finance the anticipated regulations and social factors favor its growth. This will be supported by business leaders, policymakers, academics, and citizens seeking alternatives. However, blockchain and Tokenization of RWAs add simplicity and data security to the concept because wealth distribution is one of the intrinsic values of DeFi (Decentralized Finance).