ReFi: Building an Earth-Saving Economy on Solana
A new way to see the world of decentralized finance, focusing on Solana
A mission to regenerate the Earth. If I have to explain simply, “Saving the planet with the power of decentralized finance.”
ReFi — Regenerative Finance is an idea becoming a reality, an evolution of decentralized finance technology to save the planet by being an inclusive, transparent, and accessible alternative to conventional financial systems. ReFi opens new ways to care for communities, living ecosystems, and our environment into the roots of our economic system.
And what do you mean by “Regeneration”? The environmentalist Paul Hawken describes it as follows: “Regeneration means putting life at the center of every action and decision.”
But how? Then we must dive into the rabbit hole of money and its relation to our planet to understand what is happening.
A Note to The History
The idea of a regenerative economy is not new.
Thinkers, economists, and philosophers have proposed a more just and sustainable economy for decades with different approaches. Let’s recap some of their ideas:
- In the 1800s, Henry George devised a land value tax to reduce inequality by taxing the land and using the revenue to fund public goods and services.
- In 1916, Silvio Gesell proposed “Freigeld,” a currency with negative interest rates, to encourage spending by disincentivizing money hoarding to promote economic activity. This would have benefited everyone, especially people experiencing poverty.
- In the 2000s, Elinor Ostrom’s worked to show that communities could sustainably manage common-pool resources through cooperation, communication, and trust, challenging the conventional method that privatization or government regulation is the only solution.
- In “Sacred Economics,” Charles Eisenstein argued that money reflects a society’s values and beliefs and that redesigning money can create a new order of importance in the community. Released in 2011.
- In 2012, Kate Raworth’s doughnut model set limits for basic human needs and planetary boundaries to create a safe and just space for humanity to ensure everyone can access what they need while staying within ecological limits.
Our current economy?
The current economy is extractive. This means the value is created using resources on demand to fulfill the money flow. But never returns the value created back to the natural assets, thus profiting only a bunch of individuals and increasing the negative effect on the planet.
Regeneration is using the profit to give back to nature.
Today’s problem of the biodiversity crisis and climate change is interdependent. The current global economy is primarily based on the consumption of finite resources, which is unsustainable in the long term and has significant negative impacts on the planet. And some reasons are overconsumption, carbon emissions, waste generation, environmental degradation, and unsustainable practices.
If you study it to the core, everything will lead to one problem-creating element, money.
Money can be redesigned to tell a different story, one of reconnection, regeneration, and planetary health.
And we need to create a new system for money.
So, Why Web3?
Web 3 is the concept of the next generation of the web, in which most users will be connected via a decentralized network and have access to their own data and where anyone can participate.
And money on Web3 is just decentralized finance (DeFi).
Decentralized Finance is a blockchain-based service that enables financial transactions. It came into existence due to the failures of current banking institutions to provide for an open and fair financial system. It leverages all the Web3 traits to provide the foundation to create a system of money that can be regenerative.
But when Web3 came into the picture with Bitcoin, it was based on energy-intensive “Proof of work.” Proof of work was in the news for creating a lot of carbon emissions. Well, that wasn't the case; it propelled the usage of renewable energy.
A recent development innovated the “proof of work” to “proof of stake,” which uses much less energy than the former. Many blockchains emerged using “proof of stake.” One such blockchain is Polygon which gained recent traction. The Polygon network consumes 0.00079 TWh annually, releasing just 0.0003kg of CO2 per transaction vs 945kg for Bitcoin.
ReFi (Regenerative Finance) is about leveraging the power of DeFi and putting life at the center of the foundation to create the economy.
Therefore, Web3 can be a perfect solution to solve Climate change using ReFi.
Is Solana can be the blockchain solution to ReFi? Absolutely.
One Solana transaction is estimated to be the equivalent of three Google searches — an impressive benefit and leverage that Solana enjoys over other blockchains. As a result, projects can achieve higher efficiency and scalability.
Ecosystem of ReFi
Let’s see what is happening in ReFi.
This shows some of the notable projects in ReFi.
Focusing on the Solana ecosystem,
- Regen Network: Regen Network is a platform to originate and invest in high-integrity carbon and biodiversity credits from ecological regeneration projects.
- Eco-Token: Eco-Token is the utility token of the ecosystem to transform the environmental credit space into an open and freely traded market.
- GainForest: GainForest is a decentralized fund using artificial intelligence to measure and reward sustainable nature stewardship.
- Proto: Proto is a location protocol and spatial data API on Solana. (Made by de_plan)
- Ostrom: Ostrom is a community-based development solution for land regeneration. (Made by de_plan)
- Atlantis: Atlantis is a digital ecosystem providing tools to help carbon credit sellers and buyers easily transact. Their tools offer not only convenience but also an array of incentives for both parties, encouraging positive climate actions at scale.
- EcoRise: EcoRise allows humans to buy back our planet from governments, corporations, and profit-based resource extraction businesses, through collective, shared stewardship of biodiverse ecosystems.
- Enrex: Connecting crypto with government-mandated certificates, thus making crypto green.
- Coral Tribe: A platform for impact investing, tokenizing shares, and decentralizing crowdlending. Tokenization of shares that provides liquidity to a traditionally illiquid market.
- Sunrise Stake: Climate-Positive staking on Solana.
- Metopia: Metopia is creating a more equitable system through Web3 Reputations. Off-chain and on-chain credentials play a part in community management, whether through customized incentive creation through voting power or non-financial contributions in the form of non-transferable Metobadges (SoulBound Tokens).
- PowerLedger: Powerledger (POWR) is a technology company that builds software for distributed and decentralized energy markets for a sustainable future. It has developed a blockchain-based platform that tracks and trades energy, flexibility services, and environmental commodities. Its goal is to provide the platform for a fully modernized, market-driven grid that offers consumers a choice in their energy while driving the democratization of power.
- Metaplex: Metaplex directly integrates the ability to designate a % of secondary sales to go to nonprofit initiatives or carbon offset projects when listing an NFT.
- Avatree (In progress): Avatree creates NFT trees that grow by sequestering carbon.
- Islands of Cool (Stopped): Removes carbon using funds from minting NFTs.
More of these excellent projects are helping to build the future of ReFi. You can visit here to learn more about them.
Impact
Only a few projects are being built on Solana for ReFi, around 20–30, but some have huge growth potential.
The impact of a more developed Solana ReFi ecosystem could be significant. ReFi’s focus on sustainability and regeneration could help shift the broader DeFi space in Solana towards more environmentally-friendly practices. Additionally, the Solana ReFi ecosystem could be a fantastic way to attract more developers and users to the Solana blockchain, increasing its adoption.
Furthermore, many projects in the Solana ReFi ecosystem have the potential to make a real-world impact by supporting sustainability efforts and combating climate change. For example, projects like EcoRise and GainForest incentivize sustainable practices and support the preservation of natural habitats. Meanwhile, projects like PowerLedger and Atlantis enable the tracking and trading of renewable energy and carbon credits, respectively, which can help drive the transition to a more sustainable and green economy.
Current Gaps
While the Solana ReFi ecosystem has seen remarkable growth and development, some gaps still need to be filled to strengthen the ecosystem further. Some holes I believe are:
- Impact measurement and verification tools: There is a need for better tools to measure and verify the impact of various ReFi projects. Currently, limited tools are available which don’t count the environmental impact accurately, or there isn’t a successful mechanism now because this is essential to attract investors.
- Carbon offset projects: While several projects focus on carbon credits and sustainability, there is still a need for more carbon offset projects to help both individuals and businesses level both.
- Financial inclusion projects: There is still a need for more financial inclusion projects that help underserved communities access financial services and participate in the broader economy by creating new platforms and tools.
- Education and awareness initiatives: We could see growing interest in ReFi and sustainability, but there is still some gap where only a few people know about it. We could solve this by making new educative initiatives on Solana and its ReFi ecosystem. (Probably, teach ReFi with Blockchain awareness by Solana)
Overall, there is still room to grow and develop within the Solana ReFi ecosystem, and there are still a lot of opportunities in this arena.
Conclusion
In conclusion, Solana ReFi presents an exciting opportunity to combine the benefits of decentralized finance with a focus on sustainability and regeneration. As the ecosystem continues to grow and more projects are developed, it has the potential to make a meaningful impact in both the DeFi space and the broader fight against climate change.
References:
- What is ReFi? Part I — A tour through the climate crypto rabbit hole — https://je.mirror.xyz/S-dpms92hw6aiacUHoL3f_iAnLVDvbEUOXw7wpy7JaU
- ReFiDAO — https://www.refidao.com/about
- What is Regenerative Finance (ReFi)? — https://blog.toucan.earth/what-is-refi-regenerative-finance/
- Enrex Whitepaper — https://wp2.enrex.io/
