I'm pretty hyped for social enterprises entering 2022.

Especially those with an orientation towards technology and scalable change.

With an estimated $2.3trillion invested in ‘impact’ ventures pre-COVID, it feels like a good time to share with you an emerging sub-sector that’s gaining steam. #ReFi

Regenerative Finance or #ReFi describes how different forms of capital - financial, human etc - can be used to create equitable and sustainable social & physical environments via the blockchain.

ReFi proposes a ‘third alternative’ to tackling significant social and environmental problems outside that of the traditional government or private sector.

Not too dissimilar to Social Enterprises, the philosophy behind #ReFi is that there role for capital markets to play in sustainable and regenerative practices.

What makes a ReFi project fundamentally different from a traditional social enterprise, though, is that:

a) Governance is decentralised rather than centralised around a single legal entity. 

b) It’s decision and transaction-driven, rather than product or service-driven. 

c) It’s mostly automated in its function since the data is stored on the blockchain, incentives are pre-determined through tokenomic design, and smart contracts can automatically execute incentivised rewards.

Despite its significant promise, the #ReFi space is not without its obstacles. Whilst mainstream interest in blockchain technology is rising, communication of the benefits is enormously challenging since it will take two or three paradigm shifts before the social enterprise sector understands and appreciates its broad potential. In addition, most ‘ESG concerns’ around crypto are gravely misguided.

As more datasets are fed onto blockchains, we should expect to see transformative smart-contract applications come to market, and with more well-crafted incentives for participants taking part in sustainable practices.

Some fascinating examples of ReFi projects include:

SolidDAO - a Web3 carbon marketplace that allows the pre-purchasing of carbon credits, helping new carbon projects raise money upfront and before getting started.

WhalerDAO  - a “community of builders, researchers, legal experts, and community influencers who are dedicated to help solve the plethora of problems that the world is facing”. WhalerDAO’s $TREE governance token is used to vote on how charitable funds are allocated to which charitable projects.

…annnnnnnd

Firefly Initiative - which is creating a protocol that records & rewards volunteerism via the blockchain, whilst attempting to tackle the $52 trillion issue of accurate measurement of ESG impact. (Disclaimer: I am involved in this project!)

Like all new crypto trends, ReFi will no doubt be prone to its fair share of opportunists.

Of all the crypto sub-areas out there, this is the one I’m most excited about.

(✨, ✨)