Regen Network and the Emerging Taxonomy of Public Networks
Why Regen Network chose to build a domain-specific public blockchain and what that means
Regen Network is an interdisciplinary team stretching from cutting-edge earth observation science and ecological economics to layer one blockchain technology. We bring this together in our mission to build the world’s first P2P network for ecological data claims and verification in support of ecosystem service payments and credits.
In order to transform the global economy by valuing ecological health, Regen Network is launching Regen Ledger, a domain-specific proof-of-stake blockchain. Regen Network is a unified stack stretching from the “layer one” blockchain system to end-users such as land stewards, climate scientists, and offset market participants. This unification from the consensus layer to the end-user makes it possible to create the world’s first user-governed climate accounting platform.
This strategy sits in opposition to the ideas put forward by universal public blockchains such as Ethereum, Algorand, EOS, and others, in which people build DAPPs (Decentralized Applications) or smart contracts for domain-specific use cases. This forces decentralized application and smart contract developers and their users to be reliant on, but without control over, the governance and security of the base layer of their blockchain. The domain-specific or application-specific public network approach is also radically different from the private blockchain approach of consortium chains in which a network is controlled by a set of “trusted” nodes.
Three Strategies for Proof-of-Stake blockchains
Domain-specific blockchains stand alongside application-specific chains and community-centric chains as the three main strategies for self-sovereign blockchain development and adoption. Let’s take a moment to unpack each of these types of blockchains, understand the uses, needs, and strategies for each.
First let’s take a moment to disambiguate a public from private blockchain approach, and add a little nuance. Public networks are generally networks where anyone can submit a transaction, run a node, or become a miner or validator. Private networks are encrypted and the transactions or information shared between nodes is invisible to the outside, a choice widely utilized in the current financial industry. An additional axis of consideration is permissioned vs. permissionless. Permissioned chains require credentials and are limited to specific computers running nodes with specific addresses signing blocks. The main critique of a permissioned approach is that networks can be censored because the entities that are running nodes are known and can therefore be targeted. Permissionless networks on the other hand (like Bitcoin and Ethereum) are censorship resistant because anyone can run a mining operation to secure the network and this makes it (theoretically) impossible for a central authority to censor a given transaction.
We’re starting to see the emergence of a third category–hybrid public, permissioned systems, an approach that many groups are taking for inter-governmental or inter-sectoral initiatives, and which we are watching closely.
Our chosen approach is a public blockchain in which the community of token holders governs the programmatic functionality of the chain in service to the use case of ecological claims, credits, and markets. We believe that ecological claims should be censorship-resistant and that the history of the relationship between business, the state, and ecological commons demands a public and permissionless approach at the core of the digital infrastructure needed for ecosystem service markets to function. However, we don’t believe it makes sense to have a completely permissionless and arbitrary smart contracting system. We will get into what this means below:
A domain-specific public blockchain is a network like Regen Network. A domain-specific blockchain is in some ways the intersection of a community-centric chain and application-specific chain, where the guiding principle is creating specific software paired with a governance token distribution that reflects the needs of a specific set of stakeholders.
In the case of Regen Network, we are serving the needs of stakeholders interested in land stewardship and health, the monitoring, quantification or qualification, and exchange or stewardship of what are called “ecosystem services.” Ecosystem services are the broad suite of “public goods” or positive externalities that landscapes and healthy ecosystems provide to the inhabitants therein. These services include things like carbon sequestration, water and air purification, biodiversity, risk mitigation through climate stabilization, and other services that result from good stewardship. So, we focus both our functionality and our governance on that domain.
An application-specific public blockchain is something like the Cosmos Hub, which is meant to provide a specific service and be governed in an optimal way to provide that service. Another fantastic example is Akash, which provides decentralized cloud computing services. In the case of the Cosmos Hub, that service is the provision of cross-chain security and routing of cross-chain transactions. Application chains, like the Akash, Cosmos Hub or Band Protocol offer specific services that could be used for many different reasons. Governance is focused on the provision of that service in the most competitive way.
Domain-specific communities will integrate and engage with the governance of application specific blockchains. It is unclear what the future network topology will look like, but users of an application-chain will always have an interest to participate in securing and governing that chain.
A community-centric public blockchain is something we see less of at the moment but is likely to start gaining traction. In a community-centric chain, a specific group of people who are affiliated (geo-located communities, philosophically-aligned communities, etc) desire to have a shared and programmable ledger system. This enables them to have an internal currency, develop reputation, and governance systems, all in a way that is completely self-sovereign and managed by the group. It’s likely that community-centric chains (DAOs in the parlance of Ethereum co-creator Vitalik Buterin) will participate in the governance of many if not all domain-specific chains and application-specific blockchains in a nested governance system.
Advantages of a sovereign blockchain approach
One advantage of a sovereign blockchain approach is full autonomy over features. If there needs to be an upgrade at any level of your software stack, from the blockchain on up, the community can initiate that change themselves.
Another advantage is community incentive alignment. Users have every ability and opportunity to own and govern the network by participating in the proof of stake security of the system. This creates a virtuous cycle between community members to mutually benefit from the use and upgrading of the network. This is not at all true in arbitrary, universal proof of work (or proof of stake) systems, where you see rent-seeking behavior between users groups instead of cooperative synergy.
Challenges of a sovereign blockchain approach
One of the challenges is that it can be expensive and time-consuming to set up. It is less and less technically challenging to spin up a sovereign blockchain thanks to the fantastic work by the Cosmos community and especially the Tendermint team, which recently launched Starport, a tool to support the quick creation of a blockchain. However, adoption and governance of a blockchain require engagement with validators, which currently are in high demand. The profession of validation is currently in its infancy, and in order to attract a visible enough validator set to secure a network and bootstrap a project, it takes a lot of time, attention, and marketing budget.
Liquidity and interoperability are another important challenge not to be overlooked. Liquidity and interoperability are issues for sovereign chains. Interoperability and compatibility between smart contracts on Ethereum is easy. Much of this is being actively worked on by an amazing ecosystem of engineers to bring to life Inter-blockchain communication. Even before the IBC world there are bridges between chains and this challenge can be solved with atomic swaps and multi-sig wallets, but it is an issue worth mentioning.
Conclusion
We believe strongly in the need for stakeholders to participate in programming economic incentives for common good outcomes, and the key role this function will play in addressing climate change specifically. We believe that the real potential of p2p networks and consensus protocols is in user engagement and control over networks of shared value. In a word, sovereignty. Regen Network is focused on bringing together a diverse set of stakeholders to monitor and value ecological health. This requires stakeholders to have a shared trust infrastructure. Who is saying what, about where, when? These are the key questions underpinning any claim and any market for ecosystem services. Adding to these generic questions we must be able to quantify both the value of the public goods in question (clean air, carbon sequestration, biodiversity, etc), as well as quantify the certainty related to the monitoring and verification methods underpinning the claim (how certain are we REALLY that there is a forest where someone says it is, and that the forest contains x tons of carbon?). These two variables (value of the ecosystem service) + (value of the monitoring and verification method) are the core components of a rational market pricing mechanism for the ecosystem services.
The biggest issue we face as a civilization today is that a forest is worth more (financially) clear cut and turned into toilet paper, than as an intact thriving ecosystem providing oxygen, water, and habitat for generations to come. This is an issue that cuts to the heart of society, culture, and economics. What do we value? How do we value? Who decides what and how we value?
With an understanding of how deep the roots of our ecological and social crisis are, Regen Network was founded. In 2017, we set out to find allies, solutions, and opportunities to build the type of social coordination and market tools humans need to re-invent an economic system that appropriately values health, life, diversity, and serves a thriving planet Earth.
Regen Network has three founding assumptions that deeply influence our strategy:
- Natural Capital (or more specifically Living Capital) is the most important form of value in the 21st century, and the health of our economy, society, and very survival depend on our ability to create market-based and commons-based solutions to account for, and regenerate, ecosystem health.
- The financial and commercial systems of the future will be 100% digital.
- The failures of our financial and commercial systems happen in large part due to a lack of transparency and user/community governance.
These three founding assumptions lead us to understand that Regen Network needs to have a fully decentralized eco-fin-tech infrastructure at its core in order to overcome the present-day challenges of aligning economic wealth with ecological health. This is why we’ve chosen the Cosmos SDK to build a public network approach to ecological accounting.
A public network approach brings the transparency needed for these to be accurately priced, and therefore to transform the way our economy relates to living systems. In essence, we (and a large and growing consensus among economists, policymakers, companies, and private individuals) believe that a tree is worth more in the forest than as lumber. A fish is worth more in the sea, and our planet is worth more as a dynamic living system than the dumping ground for extractive industry.
Therefore, the pillars of a platform built to successfully link market forces to ecological health and regeneration need to have three primary attributes:
- Digitally-native monitoring, reporting and verification systems; open source, low cost, scientifically rigorous verification and quantification of ecological state
- Distributed, decentralized, and public infrastructure
- Community governance of the full stack
Each of these pillars is a core component of Regen Network’s full-stack approach to creating a public payment for ecosystem services marketplace.
In essence, Regen Network is a user governed market for buying and selling the right to claim responsibility for verified positive impact. Demand is generated by social and governmental pressure to use these assets as a mechanism to “offset” negative impact resulting from business activity that is the foundation for wealth in our present economic system. What we have described above is the first step towards the holistic economic transformation in which value is transformed from extractive and degenerative power to regenerative potential.
Regen Network is a user-governed platform for ecological accounting. Building as a Domain Specific Proof of Stake blockchain allows us to engage an incentive aligned community to bring best-in-class carbon credits with co-benefits to market to serve the surging demand for corporate social responsibility. The beautiful thing about building in public, building open source, and launching a public network is that the tools we are building can be the foundation for a broad suite of other ideas from brilliant minds aiming to serve planetary regeneration. Carbon credits are only the beginning.
What’s your idea? Join us.
