Regenerative finance, or ReFi, is the practice of utilizing cryptocurrency infrastructure to restructure our economies in a way that benefits the greatest number of people over the longest period of time. In 2023, we anticipate that ReFi will be more popular than DeFi. Particularly where cryptography and environmental protection meet. Let’s learn more!
The Ethereum Merge was the most talked about event of 2022, ahead of even the bad market and scandals. The dramatic decrease in carbon emissions due to Ethereum’s new proof-of-stake consensus process has been one of the most researched, disputed, and studied results of the Merge, especially in comparison to Bitcoin’s energy-demanding proof-of-work method.
However, this just scratches the surface of the interplay between cryptography and weather. In preparation for the low-carbon economy, hundreds of innovative Web3 initiatives are in development as we enter 2023, and new venture funds with a focus on ReFi are launching to help speed up these endeavors.
One such Move2Earn game is WheelCoin, created by Iomob, whose CEO and co-founder is none other than Boyd Cohen. This article is a section of CoinDesk’s Cryptocurrency Predictions 2023.
Blockchain and ReFi
Surprisingly, many layer one and layer two blockchains have shown commitment to low-carbon economy promotion and support. Even going so far as to provide ecosystem financing to entice ReFi projects to install on their network. Among many others, the list contains the names Cosmos, Hedera, Topl, Polygon, Celo, Near, and Algorand.
However, as we go towards the application layer, the projects being implemented on these blockchains become fascinating. Especially since they have a more direct bearing on industries, people, and the planet.
There’s a strong correlation between increased openness in the worldwide carbon offset market (worth $270 billion) and the climate sector with the highest ReFi activity. The statements made by carbon offsets’ purchasers and originators have been in question for some time. Although norms have been implemented to promote more responsibility in the industry, the general public still has reason to be wary.
The fact that ReFi is exhibiting a reach that extends well beyond blockchains and carbon offsets is even more thrilling. ReFi initiatives are developing on crypto rails to address the climate impacts of every sector and consumer behavior.
The Regen Network attempts to facilitate the creation of digital carbon offsets by landowner communities on the blockchain.
Meanwhile, Klima DAO has developed a tokenized carbon offset system that has directly facilitated the offset of nearly 17 million tons of carbon dioxide from the atmosphere.
Reneum is using blockchain technology to increase transparency in the renewable energy credits (REC) market, in a manner analogous to the way carbon offsets have been brought on-chain.
Meanwhile, since its start in 2016, Powerledger has been a pioneer in enabling P2P decentralized renewable energy trade.
At the consumer level, we have faith that initiatives like move2earn will help gamify the adoption of low-carbon lifestyles.
In 2023, M2E may link up with efforts to reduce carbon emissions and develop transparent and tokenized carbon offsets.
Venture Funds and ReFi
To hasten the widespread implementation of ReFi use cases, the World Economic Forum has now established the Crypto Sustainability Coalition. Elon Musk’s renowned X Prize competition, established initially to recognize game-changing climate innovation, is expanding into the ReFi sector.
ReFi Venture Studio, Cerulean Ventures, Allegory, a100x, AeraForce DAO, Vanagon Ventures, Draft Ventures, and Possible Ventures are just some of the new VC firms and DAOs that have emerged in recent months to target the ReFi industry. We expect that by 2023, we will begin to observe mainstream-impact funds and crypto funds, implementing ReFi-themed funds. Especially as traditional VCs have progressively adopted ESG measures and created sustainability-focused funds.
We are still in a bear market as 2023 starts, and there is little reason to expect a turnaround soon. However, ReFi will likely break through to the mainstream, demonstrating the real-world effects of cryptocurrencies. Refi is shifting the conversation to the role of a positive catalyst for a transition to a low-carbon economy.