DeFi to ReFi: From Short Term Gain to Long Term Impact
DeFi (Decentralized Finance) is changing the financial world. Outside the wildest imagination of the Wall Street traders and Central bankers. It is a disruptive innovation with huge potential but also carries enormous risk, as we have seen this year.
We are now also seeing the birth of ReFi (Regenerative Finance). A new movement leveraging crypto economics to create a positive impact.
In this article, we will discuss about DeFi, ReFi, and a playful way to participate in ReFi with Climate Guardians (a Play-to-Preserve Game).
📉 Short term gain in DeFi
DeFi is an open and permissionless tool to create new financial infrastructure outside the control of centralized entities such as banks.
The heights of DeFi happened in 2020, which is known as the DeFi summer. Lots of successful projects were founded during this time such as Uniswap, Aave, Compound, or Yearn, just to name a few.
Hyper Financialization of the blockchain has happened. Some projects are promising super high returns with up to 50% APY or more (Annual percentage yield) or algorithmic based stablecoins.
Unfortunately this year we have seen DeFi projects that are not delivering their promise and have crashed into dust, such as the Terra-Luna stablecoin. As a result, lots of retail investors lost a lot of money, some even their life savings. Suicides were also reported in some countries.
Some might understand that financial markets are fragile, as Nassim Taleb explained in the Black Swan book. But many people do not know what they are putting their money into.
Should we now stop creating financial innovations because of a few bad apples? No.
☀️ Creating long term impact with ReFi
We have learned a lot from DeFi. Not only what not to do, but also the potential for other use cases.
Welcome to the hopeful world of Regenerative Finance (ReFi). Regenerative means to improve the current condition to be better than the previous state. In economics, it’s about regenerating assets from investment. In agriculture, it’s about improving the resources that we use, rather than destroying or depleting them.
ReFi combines the financial innovation of DeFi with a regenerative approach. John Elisson from ReFi DAO wrote in his article What is ReFi? Part I — A tour through the climate crypto rabbit hole: “Money can be redesigned to address climate change, biodiversity collapse, and social injustice. While smart contracts and blockchain are the coordination tools to solve this issue.”
🌎 Climate positive Web3
Let’s take a deep dive into Climate. In the last few years, climate change has become one of the most pressing issues globally. Both on a national level with the Paris climate agreement and a grassroot level such as the Fridays for future.
To achieve the 2050 goal of reducing carbon emissions and limiting temperature increase to 1.5 °C, we need to have all hands on board and leverage new innovations, including ReFi.
The first application of ReFi is in carbon credits. Toucan is the pioneer in this space, as the first project that successfully brings carbon offset on chain and tokenizes it. For example, Toucan bridged carbon credits from various projects into NFT and created a liquidity pool of carbon credits called the Base Carbon Tonne (BCT). 1 BCT is equal to 1 Tonne of CO2 emission avoided.
Toucan has introduced a new programmable money lego based on carbon credits to create a climate positive web3 infrastructure. Since the launch in 2021, Toucan has partnered with lots of web 3 climate projects such as Klima DAO, Solid world DAO, Senken, and many more.
Source: Toucan Protocol
🔵 ReFi DAO
ReFi DAO (Decentralized autonomous organization) is a community for everyone that is interested in creating climate impact using web3 tools. ReFi DAO is a schelling point for the hopeful.
Founders, developers, climate scientists, writers, and people from every walks of life come together in the community to share knowledge and collaborate to accelerate the adoption of ReFi to solve climate change and other global issues.
The ReFi DAO community also has a strong memetic culture with the ReFi orb that symbolizes the spiritual mélange of diversity, regeneration, and optimism in the ReFi space.
Source: @refidaoist
ReFi DAO is actively promoting regeneration in the crypto space, hosting cool events such as planet positive hackathon, founders circle, MRV (Measurement, Reporting, and Verification) Day, and the long awaited ReFi spring.
🏗️ ReFi in Progress
This is just the beginning, we are seeing more interesting projects that are developing in the ReFi space. For example, Regen network is creating a global marketplace and contracting platform for Earth’s ecosystem assets, services, and data with its Regen Ledger: the Blockchain of ecological health.
Another project to watch is Flow Carbon. Bringing carbon credits on chain and providing offsetting solutions to corporate carbon offset buyers. Flow Carbon recently hit the headlines after it raised $70 million USD from A16z, Samsung and other investors.
Source: Gregory Launda from Regen Network
🎮 A fun way to join ReFi: Climate Guardians
So you might ask how you can be part of the ReFi movement? The easiest and most fun way is by playing games. Climate Guardians is one such example that delivers the first “Play-to-Preserve” concept where players can team up to fight deforestation and make a real-world impact such as preserving the Amazon Rainforest.
Climate Guardians combines the artifacts of blockchain technology such as NFT and DAOs with a great gaming experience. It is a playful take on ReFi.
Players can have fun while also supporting the regeneration of the rainforest. This feels like being Mowgli in the Jungle book, having a great time while living in harmony with nature.
People seem to love this concept. Recently, we received the Game for Impact Award at the Celo Camp Batch 5. A virtual acceleration and mentorship program launched by the Celo Foundation in partnership with Upright. Climate Guardians is one of the 30 impressive teams, chosen from a group of 395 applicants from over 75 countries, consisting of projects creating impactful dapps in several sectors.
If you want to participate in ReFi and have fun at the same time, be part of the community by joining the discord server here and get a chance to be whitelisted.
GO AHEAD, JOIN OUR COMMUNITY!
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➡️ Check out Climate Guardians at: https://www.climateguardians.io
