The adoption of cryptocurrencies is relentless due to their decentralized nature, and serves to solve diverse problems, among them emerges a group, ReFi the Regenerative Finance, and can be used by anyone, anywhere. This group of cryptocurrencies promises to move the market by rewarding the actors involved as they repair historical social and environmental damage on the planet.
However, cryptocurrencies are still relatively new and therefore very volatile. And since cryptocurrencies are not yet widely accepted, it can be difficult to find places to spend them. More importantly, the impact of cryptocurrencies on the environment, society and governance (ESG) has recently become a point of contention.
ESG Concerns of ReFi (Regenerative Finance) Cryptocurrencies
In the last decade, investors have shown a growing interest in ESG issues. This trend seems to be driven by several factors, including an increased awareness of the risks of climate change and other environmental problems, as well as a growing recognition of the importance of social and governance factors in long-term value creation.
When it comes to cryptocurrencies, ESG generally refers to the impact of tokens in these three domains. For example, a cryptocurrency focused on energy efficiency would be considered to have a strong ESG profile.
So while praised for their transparency and decentralization, cryptocurrencies also present ESG concerns that must be considered. For example, the reliance on electricity for mining can lead to environmental problems, as can the lack of regulation of exchanges and the volatility of cryptocurrencies.
In fact, the cryptocurrency industry is increasingly interested in ESG, which offers a potentially more sustainable and responsible way to invest in this new asset class.
Electricity consumption of cryptocurrencies and their relationship with ReFi
The electricity consumption of Bitcoin mining is a controversial subject. Some claim that it currently consumes more electricity than the whole of Ireland, while others argue that it is not that serious. Regardless of the exact number, it is clear that Bitcoin mining requires a lot of energy.
According to a recent study, the crypto industry’s overall electricity consumption has increased considerably over the past year. However, the cryptocurrency industry is still in its early stages and is striving to mitigate its impact on the environment while promoting global financial inclusion.
Measures are already being taken to try to reduce the amount of energy consumed by cryptocurrency mining. For example, some mining operations use renewable energy sources.
The Proof-of-Stake consensus mechanism, which is much more energy efficient, is another way to address these concerns. The second largest cryptocurrency, Ethereum, recently made the transition to the PoS algorithm, reducing its power consumption by 99.95%.
This update, called “The Merge,” not only significantly reduced the amount of energy consumed by the network, but also helped improve the overall efficiency of the Ethereum blockchain.
The cryptoeconomy is turning to the ESG
As more investors look to align their portfolios with their personal values, the crypto sector is turning to ESG. ESG investment takes into account a company’s environmental impact, its treatment of employees and other stakeholders, and its adherence to good governance practices.
Crypto projects focused on sustainability, social good, and decentralized governance are gaining popularity, and ESG-themed crypto assets are attracting increasing interest.
As the cryptocurrency sector matures, we can expect to see more projects and assets focused on ESG themes. This is a positive trend, as it will contribute to making the industry more sustainable and aligned with the values of a growing number of investors.
In addition to PoS, another manifestation of the ESG trend is regenerative finance (ReFi), which focuses on building sustainability-related projects and helping to build a more just and regenerative economy. Unlike traditional cryptocurrencies, which tend to be focused on speculation, ReFi projects are intended to be used in real-world applications.
The New World of Regenerative Finance (ReFi)
ReFi is an experiment that has the potential to create financial incentives to reduce carbon emissions, regenerate the environment, and reverse climate change, as commented by Messari in a tweet. It requires capital to bring about lasting, positive change for all stakeholders. It fundamentally redefines the user’s relationship with wealth and the current financial system.
Accessibility and fair distribution are at the core of ReFi. It is a multifaceted idea that promotes regeneration and preservation rather than exploitation.
ReFi is a crucial tool to fight climate change and promote sustainable development by investing in projects that improve the environment and bring social benefits. In this way, ReFi can help finance the transition to a more sustainable future. In addition, ReFi can also help create jobs and support local economies.
Therefore, ReFi can take many forms, including green bonds, carbon offsets, and impact investing. In ReFi, the value of preservation/regeneration is first defined. Then, using blockchain technology, it is tokenized to be turned into a tradable asset. Finally, liquidity is generated for this asset through various Web3 applications.
The ReFi DAOs
DAOs are decentralized organizations that operate on smart contracts. They have the potential to revolutionize the way we do business. NFTs are non-fungible tokens that can represent digital or physical assets and are already used in several ReFi applications; Impact-to-earn models allow users to earn rewards by participating in impactful activities; and the Metaverse is a decentralized virtual world that is a new frontier for ReFi and offers a unique platform for opportunities.
This space is growing, with more than 100 ReFi companies existing today. We can categorize all projects into the following categories:
- Impact-2-Earn (Dotmoovs, Sweatcoin, Sweetgum Labs)
- Metaverse (Climate guardians, Wildchain, Woodies)
- DAOs (EarthFund, Gitcoin, KlimaDAO, Kanna Coin)
- NFTs (Carbonable, MetaTrees, Sapling)
Recently, Gitcoin founder Kevin Owoki tweeted about the creation of a venture capital studio that will focus on building and funding regenerative Web3 projects. This initiative is a big step forward for ReFi, and as the ReFi movement gains momentum, we can expect to see more and more projects launching tokens that have a focus on sustainability and social good. This is therefore a positive development for the cryptocurrency industry, which will certainly have a lasting impact on the world.
A Flexible DAO Kanna Coin
Climate change is one of the most urgent issues of our time. Carbon emissions are affecting our planet and it is vital that we find solutions to reduce and offset these emissions. That’s where Kanna, an innovative startup focused on environmental impact, comes in.
Kanna is a company dedicated to removing CO2 from the atmosphere and benefiting degraded soils, enabling people to invest in positive environmental impact by combining the transparency of blockchain with the environmental technology of hemp. Our goal is to build a more sustainable future, where reliability and environmental responsibility are priorities.
With its protocol for certifying carbon credits through regenerative agriculture. This pioneering approach not only offsets carbon emissions, but also promotes soil regeneration, biodiversity protection, and the sustainable development of farming communities.
With Kanna’s carbon credit certification, companies can neutralize their carbon emissions in a reliable and transparent way. By acquiring these credits, companies demonstrate their commitment to sustainability and contribute directly to mitigating the effects of climate change.
By choosing Kanna as a partner for carbon credit certification, companies are investing in a greener and more sustainable future. Moreover, by supporting regenerative agriculture, they are boosting agricultural practices that help restore the environment and strengthen rural communities.
Kanna’s approach is based on scientific data and partnerships with farmers committed to sustainability. By combining technical expertise and innovation, Kanna is leading the way in the fight against climate change and offering concrete solutions for a more sustainable future.
Be a defender of the environment and be part of the change with Kanna. Join us and help build a greener future for all.
Learn more at: https://kannacoin.io
As the world increasingly turns its attention to ESG issues, the cryptocurrency industry is following suit with ReFi, which is designed to fund sustainability-related projects and contribute to building a more just and regenerative economy.
Unlike traditional cryptocurrencies, which tend to be focused on speculation, ReFi should be used for real-world applications.
With more investors looking for ways to support projects that seek to have a positive impact on the world, ReFi projects offer a way to do this while making a financial return. So what is the future of ReFi? One thing is certain: the landscape is evolving rapidly, and new innovations are poised to transform traditional finance.Learn More