Industry trends and transformations in customer behavior constantly challenge the business sector. Especially during the pandemic, companies had to meet customer needs while retaining employees and maintaining the quality of their products, which proved to be quite tricky. The lack of workers and all the imposed regulations contributed to fewer small businesses starting their operations and more failing organizations.
However, what we could clearly notice during the COVID-19 crisis was that natural resources and nature, generally, were flourishing yet again, which improved climate change considerably. Air pollution decreases, along with greenhouse gas emissions, in only a few weeks after the restrictions. Hence, this was a massive development in environmentalism that we’re now trying to reproduce through decreasing pollution with PoS in crypto, an update in crypto that changed the Ethereum price forever.
That’s where regenerative finance (ReFi) comes to change things. This new financial system approaches the development of both sustainability and profit in a balanced way through cryptocurrency and blockchain.
How is Regenerative Finance defined?
Regenerative Finance (ReFi) can be seen as a substitute for the modern financial system because it combines high tech like blockchain and crypto with the latest trend, sustainability. The system is based on raised capital and has numerous benefits for companies, such as the following:
- It supports the improvement of companies’ systems towards eco-friendly practices and resources by using renewable energy;
- It reduces economic disparities by offering chances to own crypto for all communities, offering them more power;
- It reinforces long-term thinking strategies to boost their profits, therefore supporting a reliable economic system;
The goal of Regenerative Finance is to balance sustainability with profit
Climate experts are going through difficulties bringing up sustainability concerns within communities and companies because they do not hold the power to change views. While businesses are caught with greenwashing, consumers are also confused about what living a sustainable life implies.
The source of the problem is still money, after all. Generally, green products tend to be more expensive than regular ones, while organizations fear losing money if their only focus is on renewable energy, sustainable materials and mitigating risks.
That’s why regenerative finance aims to incentivize actions that approach environmentalism equitably, in opposition to the current economic system. This includes fighting to decrease carbon emissions, one of the most damaging elements to people’s health and the entire ecosystem.
ReFi can be implemented through climate initiatives
The primary way in which ReFi can be introduced in our lives is, of course, by adopting and understating blockchain and cryptocurrency because these technologies are the main channels through which donations and sponsorships for climate projects will be assigned. For instance, the Ethereum blockchain is known for its DeFi (decentralized finance) ecosystem, DAOs (decentralized autonomous organizations) and even NFTs (non-fungible tokens) that should be used to connect communities. Additionally, monitoring the Ethereum price can provide insights into the health and trends of this blockchain ecosystem, influencing decisions related to its applications in various sectors, including climate initiatives.
At the same time, learning how cryptocurrency can be used for the benefit of sustainability is a must. Briefly, anyone can use crypto, and any user can receive crypto in a matter of minutes, facilitating fair chances for communities and bringing in funds for start-ups.
However, the technological and financial approach has to be linked with climate initiatives. This includes creating strategies that promote the reduction of carbon emissions. Some of the ways in which this can be achieved are through measuring the carbon footprint released by a business, switching to sustainable suppliers and investing in green equipment.
Another innovative measure of implementing ReFi was discovered to be successful in preserving cultural heritage artifacts using blockchain records. This way, every object’s value would be transferred within an NFT, which would help create a safe inventory of historical artifacts.
But ReFi has to get through some challenges
While ReFi is a revolutionary approach to sustainability and finance, it needs to develop further in order to be used seamlessly. For instance, the projects into which investors should put their money require a superior level of information and must be reliable and long-lasting, which takes a lot of time to implement and develop.
Still, the crypto and blockchain ecosystems are considerably challenging to understand and tackle in order to create a simple project. Hence, to implement a ReFi project, only a professional team who created previously similar projects can achieve such development.
At the same time, it’s hard to check all the trustable boxes for customers because even if cryptocurrency and blockchain are some of the safest technologies since they’re backed by cryptography, they have flaws. Investors will connect their digital wallets to projects to complete the transactions, which is a step that must be secured from scammers.
Finally, the lack of regulation for both cryptocurrency and blockchain might hinder people’s access to these projects, as well as hide media coverage. Although blockchain is somewhat welcome in most regions of the world since it improves data accessibility and management, cryptocurrency has yet to achieve total legality. Unfortunately, volatility is seen as too dangerous by most governments, and considering that even digital assets like Bitcoin and Ethereum present these risks, the coins are yet to be framed within a reliable legal framework.
The planet needs Regenerative Finance
As previously mentioned, many companies were discovered to practice greenwashing, which involves a massive marketing campaign for sustainable products despite their lack of environmental measures. At the same time, others are not even aware of their impact on the environment, polluting the air, water and soil with waste and greenhouse gas emissions due to their production processes.
Now, addressing environmental issues as a company is required by most customers, who value the rightful resource usage. Most importantly, businesses must identify their impact on nature based on their production and manufacturing processes and then take action by searching for appropriate and productive ways to replace traditional practices.
What do you think about ReFi’s efficiency?
ReFi (regenerative finance) is a new way for environment mitigators to change how companies act towards nature by creating and funding green projects on the blockchain. With the help of cryptocurrency, projects that support the elimination of gas emissions and greenwashing could make a real impact by being supported by other like-minded investors globally.
