Web3 and regenerative finance (ReFi)

Regenerative Finance is generating repercussions on the implications it seeks to produce on social and environmental welfare.

Generally when we mention terms like blockchain or cryptocurrencies, it is very common to think of NFT’s, decentralized finance (DeFi), asset tokenization, Decentralized Autonomous Organizations (DAO), and many more.

But there is a phenomenon that has recently emerged called ReFi, which refers to Regenerative Finance, whose birth is related to the exploitation of our own resources. As mentioned by several authors such as Angélica Valle, there are still many alternatives for the use of blockchain technology to link with valuable resources such as drinking water, clean energy, production and consumption linked to issues such as traceability, pollution, etc.

It is in this way that ReFi allows users to redefine their relationship with traditional finance, and the relationships they have with wealth in general.

In chronological order, first we can mention the event that took place in Santiago de Chile on September 23rd of this year called ETHSantiago. This event was attended by personalities from different institutions, who presented and discussed the new phenomenon.

This event gave rise to a great debate that took place among the speakers, where issues related to how blockchain technology is an excellent tool for ReFi, its relationship with the economy, culture, the good use and exploitation of resources, the monitoring, reporting and verification (MRV) system, and three novel projects that seek the integration of cryptoassets for the regeneration of the planet were discussed.

As a major event contributing to this trend, we can find the Merge of the Ethereum network, by which it left its previous PoW system based on mining through the use of mining equipment with high energy consumption, moving to ETH 2.0 with the PoS protocol, which has made this blockchain 99% greener, in which new ReFi projects will emerge as a result of this development.

A week later, on September 30, a Twitter Spaces event called NFT Steez was held by Alyssa Expósito and Ray Salmond, in which they met with Mashiat Mutmainnah, one of the major exhibitors of this new ReFi tool, with the objective of analyzing how these new finances can generate greater access to blockchain technology.

Today in many countries there are many people who do not have the possibility of basic and equal access to financial services, which would be useful for them to cover their basic needs.

Specifically, Mutmainnah argues that ReFi raises awareness about the way traditional financial systems act with respect to ecology and care for natural and social resources. He also made the brief comparison by mentioning that what allows us to purchase a garment for a certain value, at the cost of child labor.

He argues that these traditional financial systems do not have the purpose that people need today, as one of the main characteristics of ReFi is to provide universal access for all and equal distribution.

Through ReFi, users can participate in methodologies that tend to increase prosperity and contribute to a healthy and clean ecosystem, trying to reduce pollution and misuse of resources of all kinds as much as possible.

In this way, ReFi can be attributed a concept whereby it tends to unite elements of sustainability by virtue of climate stabilization and biodiversity, while simultaneously maintaining equal access worldwide.

One phrase that has caused Mutmainnah to make a splash is that he claims ReFi helps people change the way they relate to money.

Currently there is a project called Endangered Tokens, by which it aims to achieve a community of decentralized finance seeking the preservation of biodiversity, giving importance and governance to stakeholders, through cryptocurrencies and NFTs. For example, through this project, you can buy a tokenized endangered tree through the Polygon blockchain.

Another related project is Oxygen ChainOxygen Chain, a decentralized IoT network that through waste system monitoring, allows recycling anywhere in the world, through internet connection and provides special treatment to waste, through a reward to the user, so everyone wins in this mechanism. In this way, it seeks to protect water, air, land and the environment in general.

They argue that there are currently few incentives for the most polluting companies to comply effectively with sanitary and pollution protocols. One of the reasons for this non-compliance is the current regime of sanctions for those companies, and on the other hand, the traditional finance system together with the current regulation, have problems of transparency and incentives for those who comply.

In this way we see how NFTs can be used for social and public good, since through a good system that links incentives for compliers, many positive and sustainable benefits can be generated.

That is why it is of vital importance to raise awareness among the population of the infinite number of applications that the combination of blockchain technology, together with NFT and web3, can offer, favoring the care of the environment and the preservation of natural and social resources.

Written by Luciano Garriga (TW:@luchogarriga) for NFT Express