ReFi will become mainstream in 2023[Opinion]| coindesk JAPAN | Coindesk Japan

DeFi (decentralized finance) made a big splash in summer 2020, becoming synonymous with the most recent bull market and much of the speculative activity that followed. One reason DeFi was born was to address the failure of banks to provide a transparent and inclusive financial system.

ReFi (regenerative finance) uses cryptocurrency technology and thinking to rebuild the economy in a more inclusive and sustainable way. I believe ReFi will be hotter than DeFi in 2023, especially at the intersection of crypto and climate change.

Crypto assets and climate change

Outside of a bear market and a few scandals, the Ethereum blockchain “Merge” dominated the buzz of 2022. One of the most discussed and analyzed outcomes of the merge is the dramatic reduction in carbon footprint through the new Proof of Stake (PoS) consensus mechanism. Especially in contrast to the energy-intensive Bitcoin blockchain proof-of-work (PoW) mechanism.

But this is just the tip of the iceberg when it comes to the relationship between crypto assets and climate change.

2023 will see a number of exciting Web3 projects focused on leveraging crypto assets to accelerate progress towards a low-carbon economy.

Meanwhile, a new ReFi-focused venture fund should also be launched to accelerate such projects.

Blockchain attracting ReFi

There is a staggering number of layer 1 and layer 2 blockchains with ecosystem funding focused on promoting and supporting a low-carbon economy and even attracting ReFi projects to their blockchains. there is

For example, Cosmos, Hedera, Topl, Polygon, Celo, Near, Algorand.

But of more interest, at least to me, are the projects that run on these blockchains that have a more direct impact on industry, people, and the planet.

The climate change-themed ReFi will bring more transparency to the $270 billion global carbon offset market. Carbon offsets have long been questioned as to the credibility of claims made by carbon emitters and offset buyers. Standards have also been put in place to bring more accountability, but simple, naive skepticism remains among the public.

Various ReFi projects

For example, the Cosmos-powered Regen Network helps landowners achieve on-chain digital carbon offsets.

Klima DAO tokenizes carbon offset mechanism. At the time of this writing, it has helped remove more than 17 million tons of carbon dioxide from the atmosphere.

What's even more exciting to me is that ReFi is starting to emerge beyond base layer blockchains and carbon offsets. Every industry and every consumer action has some impact on the climate, and ReFi projects are emerging that leverage cryptocurrencies to address those issues.

As well as bringing carbon offsets on-chain, Reneum is leveraging blockchain technology to bring more transparency to the renewable energy credits (REC) space.

Powerledger has been a peer-to-peer decentralized renewable energy trading company since its inception in 2016.

At the end-user level, I am optimistic that there will be moves to promote low-carbon lifestyle adoption in the form of games, such as Move-to-earn (M2E) projects.

Combining M2E with carbon reduction and transparent tokenized carbon offsets for individuals could become a reality in 2023.

Venture funds and international initiatives

The World Economic Forum (WEF) recently launched a “Crypto Sustainability Coalition” focused on accelerating adoption of ReFi use cases. The X Prize, launched by Elon Musk to reward innovation on climate change, is also expanding into the ReFi space.

Several new ReFi-focused venture funds and DAOs (Decentralized Autonomous Organizations) have emerged in recent months, including Cerulean Ventures, AeraForce DAO, ReFi Venture Studio, Allegory, a100x, Vanagon Ventures, Possible Ventures, and Draft Ventures. ing.

Just as mainstream venture capitalists are introducing more ESG (Environmental, Social and Governance) metrics and launching sustainability-focused funds, in 2023 mainstream impact funds and crypto Funds will start doing ReFi-themed funds.

Real world impact

As 2023 begins, we are still in the midst of a bear market with little hope of a near-term bull run.

But I am confident that 2023 will see ReFi gain even more mainstream attention and adoption, proving that cryptocurrencies have a real impact on the physical world.

And the stories of fraud and fraud that have spread in 2022 will turn into power for acceleration and positive change towards a sustainable, low-carbon economy.

Mr. Boyd Cohen: Co-founder and CEO of Iomob, creator of WheelCoin, a “Move-to-Earn” game that rewards users for choosing eco-friendly transportation.

｜Translation and editing: Akiko Yamaguchi, Takayuki Masuda
｜Image: Shutterstock
｜Original: ReFi Is Going Mainstream