Based on open code and secure ledgers stored on consensus networks, ReFi offers a way to implement a more democratic and inclusive alternative to traditional financial systems. 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. 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. These projects receive an asset called “carbon credits” after they are verified, which they can sell to individuals and organizations who want to support climate https://www.xcritical.com/ action.

• 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.
• These assets are liquid on marketplaces such as Opensea, Voice.com (the leading carbon-neutral NFT marketplace), Nifty Gateway, SushiSwap, and others.
• Traditionally these outcomes would only have been achieved if a government taxed the negative externalities and redistributed the funds to replenish that which was extracted or degraded.
• [+] Black arts and business district in Oakland, centered around Esther’s Orbit Room, a legendary former blues and jazz club.
• Grant-making and foundations also are sometimes missing the mark when it comes to supporting development and access to innovative and meaningful solutions.

ReFi is grounded in regenerative economics

These assets are liquid on marketplaces such as Opensea, Voice.com (the leading carbon-neutral NFT marketplace), Nifty Gateway, SushiSwap, and others. The process of linking carbon project developers with MRV and ultimately the buyer is incredibly complex, bottle-necked, and mired with transparency and what is regenerative finance duplicity issues. By placing a price on carbon, the Protocol presented a unique environmental commodity on an international scale. The concept of a carbon market was unveiled in the 1997 Kyoto Protocol as a mechanism to incentivize carbon-emission reduction. The industrial economic theory works perfectly when Land, Labor, and Capital are present, but the cycle of prosperity breaks when Land no longer exists. And no, this isn’t another one of those “slap a blockchain tag on it and raise money” ideas—the actual execution here is fascinating.

Regenerative Finance and Real-World Assets – what’s the connection?

However, just because a crypto project labels itself “regenerative,” it doesn’t mean it’s a good investment. As with any crypto project, you should research the team, road map, and reputation before allocating any funds to it. To support these farmers, J.Crew has provided financial incentives, focusing on sustainable practices like minimal tilling, crop rotation, and the integration of livestock to enhance soil biodiversity. This all comes from the perspective of someone new to the idea, but the hope is that we can go on this journey together and meet a lot of wonderful people and projects along the way. When as many interconnected and interrelated causes and effects are diagramed and mapped out, capital can be deployed more fairly. Overbearing repayment terms and collateral requirements extracting vital resources from communities can be replaced, and exclusionary credit standards can be revised.

How ReFi Is Leveraging Decentralized Blockchain Technology

There is a new wave of innovative projects being built on blockchains that are attempting to disrupt incumbents in this sector. Regenerative finance is generally an automated platform governed by smart contracts. Loans are handled instantaneously and the crypto will be deposited into a user’s digital wallet when a loan is confirmed. Traditional methods of recording history or inventorying artifacts are subject to change, but the blockchain locks these records in place. NFTs of some of these items can be minted, allowing cultural centers around the globe to raise funds for the future preservation of historical items.

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A member of the R Planet discord said we could see our efforts as regenerative (not knowing #ReFi herself) and from there… things took off. RSF Social Finance’s Racial Justice Collaborative recently funded the reactivation of a historic … [+] Black arts and business district in Oakland, centered around Esther’s Orbit Room, a legendary former blues and jazz club. “Through remanufacturing we are able to reduce the cost of doing business, because we are able to give the customers components at a fraction of what it would cost to get a new one. “Circular economy not only is good for us, but is also financially very strong to generate competitive advantage. Society was, as a whole prior to the 1970s, living in a way where resources were regenerating faster than they are being consumed.

When choosing investments, the fund uses a race-based lens that considers the enterprise’s ownership, opportunities it provides, and the degree of worker participation in key decisions. And then it uses integrated capital financing, which could include loans, equity investments, direct public offerings, and other tools, to tailor its support for the enterprise. Web3 systems are designed to be open to everyone, but that doesn’t mean it’s impossible to apply safety controls like know-your-customer (KYC) and anti-money laundering (AML) checks.

Now, advancements in computing including blockchains and smart contracts mean we have the technology that allows us to realize the visions of these thinkers, and to expand on their work. ReFi aims to use crypto for good by harnessing the potential at the intersection of profit and purpose and introducing the idea that it pays to help the planet. Organizations harness the power of ownership to collectively organize individuals to provide grants, investment, mindshare, marketing, and insight to stimulate the community and further drive IRL impact. But the blockchain enables a broad, sweeping wave of creativity; dozens of ambitious ReFi founders are bringing regeneration to the forefront of community and consumers in compelling ways beyond simply distributing carbon.

A few years ago, J.Crew Group took a bold step by embracing regenerative agriculture to secure a more sustainable future for cotton and other materials. This agricultural approach prioritises soil health, biodiversity, and water conservation. Our community is about connecting people through open and thoughtful conversations.

These security measures can consciously be added to certain parts of an application or service to protect users, while still adhering to the underlying idea that by default, people have a right to access them as public goods. Regenerative agriculture has been a model example of regenerative finance in action. This is because it takes into account all elements within the farm and food system, and ensures they are working harmoniously while perpetually replenishing natural resources and improving human health.

While J.Crew and Macy’s have laid the groundwork, industry leaders believe there is space for more companies to adopt similar practices. Both companies recognise the importance of learning from others to overcome challenges in sourcing, ensuring that a collective approach strengthens industry-wide efforts. Macy’s aims to have 40% of its products sourced from preferred materials like responsibly produced cotton by 2025. The company has also initiated sustainability summits to engage its market brand partners in collaborative efforts. There are large, multinational companies like Bosch that adopted this model many decades ago; there are start-ups that are baking a mission-first structure into their DNA from day one; and there is everything in between.

To achieve our 2030 target of halving current emissions the State of Climate Action 2021 report calls for a “near doubling of the pace of action”. It states that $5 trillion in climate finance is needed annually to reach our 2030 emissions targets¹. Beyond these more global, decentralised elements provided by blockchain, there are also elements of localism involved in the regenerative approach. By taking an approach that seeks to strengthen local communities and their resilience, the often smothering nature of global supply chains (and the way in which they can suddenly come to a halt) can be mitigated. By taking a regenerative approach to investments, product design and business models, financial returns are seen as only part of the overall package.

It reminds us that money is a human invention — it’s a concept — and it’s not money that is the problem but the current design of money. A central tenet of ReFi is to re-imagine and re-design money and the systems it moves through. Over the last decade and a half, the idea of “impact investing” – where funds are directed to generate not just financial return but also social and environmental impact – has become increasingly popular in investment and social impact circles.

In the view of these complex system thinkers, promoting the health of the underlying human network is vastly more important than increasing the volume of economic output (GDP growth) per se. Innovation, entrepreneurship, and capacities are important, but they need to be linked by common-cause values, supported by commonwealth infrastructure, and nourished by cross-scale circulation of money, information, and resources. Large and small organizations both play important roles, and the goal is to maintain balance and integration. Women and people from developing countries often hesitated or were not able to access 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.

By tokenization of carbon credits, the concept is directly applied as a means to reduce carbon emission. Abdullah Yildiz, Executive Director of the European Carbon Offset Tokenization Association explains this in an interview with us “Tokenizing the Path to Net Zero”. Its data storage structure reduces risk of fraud and foul play in regenerative projects and Impact Investments. RWAs allow the connection to the real world and add a layer of stability for value. Traditional financial markets are built on value extraction and people exploitation. Integrating a unified global carbon market onto the blockchain will create opportunities to incorporate Regenerative Finance principles.

Blockchain ReFi can be thought of as a valuation of natural assets on the blockchain. This article will open your eyes to the potential of ReFi, including impacts, potential growth, pitfalls, and real-world use cases. No-loss gambling is a new way to play games or participate in gambling activities, but without risking your own funds.

According to a report by the IFC, $2.3 trillion were invested for impact in 2020, an impressive sum, yet this is only around 2% of total assets invested globally in 2020. Climate is a major focus for investment today but regenerative finance practices also need to take into account pollution, waste, toxic industrial agriculture, and many other aspects of the total system humans are a part of and contributing to. Any touchpoint we have with the natural world from which every single resource we use in our industrialized civilization emerges from needs to be identified and studied. Only by taking this kind of whole systems approach can we enact meaningful positive and long-term changes.

We want our readers to share their views and exchange ideas and facts in a safe space. You can think of it similar to how a treatment for a condition can end up causing several new side effects that themselves require treatment. To get a broader picture of the potential of regenerative finance, read our research report, Real World Assets for Real World Purposes. Regenerative Finance is supporting the efforts to create a sustainable economy, propelling interest, investment, and innovation.