The term “degen”, short for degenerate, has become something of a term of affection in the crypto community. Its use stems from the high-risk, high-reward nature of digital asset trading, and people’s propensity to stake the house. If Wall Street ever disparaged the volatility of cryptocurrencies and the Ponzi economy, Web3 has embraced it like a badge of honor.

But it is a mistake to let this hedonistic mindset become the default way of understanding cryptocurrencies. Web3 seems like a joke when dogecoin, a cryptocurrency created explicitly as a meme, is in the top 10 digital assets by market capitalization. Yeah, it’s (remarkably still) fun. And yes, it is important that cryptocurrencies know how to laugh at themselves.

Linda Adami is the founder and CEO of Quantum Temple. This article is part of CoinDesk Crypto 2023.

But we are in danger of letting the revolutionary potential of blockchain become a joke. What many don’t realize is that beneath the volatile prices and meme-worthy façade, Web3 is a transformative force that has the potential to bank the unbanked, unlock new economic value, and build a more equitable future.

Regenerative Finance (ReFi)

In a 2015 article titled Regenerative Capitalism, economist and philosopher John Fullerton described the “regenerative economy” as a type of economic design that maximizes value to communities by regenerating what has been lost, conserving what remains, and ensuring financial prosperity. long-term.

In other words, it is a way of thinking about the economy that takes into account negative externalities that have often been ignored by traditional capitalism. This includes things like environmental destruction, social inequality, and financial instability.

While Fullerton wasn’t specifically discussing cryptocurrencies, the same principles can be applied to the way we think about decentralized finance (DeFi). At its simplest, DeFi is about democratizing access to financial services and removing intermediaries who often take advantage of their position.

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The concept of a regenerative economy is still in its early stages, but there are already some examples of Web3 projects using ReFi principles to create positive change.

In recent decades, we have seen firsthand the devastating effects of carbon emissions and plastic pollution. There is little doubt at this point that contemporary human activity and climate change are linked. But what humans cause, humans could undo.

In an effort to mitigate some of the damage from industrialization, various carbon trading schemes have been created. These schemes allow companies to offset their emissions by investing in projects that remove carbon from the atmosphere.

Read more: Ukraine to use NFT to save its cultural ‘DNA’ amid Russian invasion

The problem with most carbon trading schemes is that they are often riddled with corruption and lack transparency. This is where Web3 comes in.

Through the use of tokens and non-fungible tokens (NFTs), it is possible to create a decentralized carbon trading system that is more transparent and less susceptible to abuse. Web3 native companies are using blockchain technology to tokenize carbon credits and make them available on a public ledger to encourage responsible corporate offsetting.

This not only makes it easier to track and verify carbon credits, but also opens up the market to a broader group of participants. As more companies are forced to offset their emissions, demand for these tokens is likely to increase, prompting more investment in carbon reduction projects.

The world’s cultural heritage is threatened by climate change, war and economic inequality. The economy of cultural exchange, driven mainly by tourism, is often unfavorable to the communities involved and intermediaries end up capturing most of the value created. To preserve global cultural treasures for future generations, we need digital versions.

NFTs can be used to create verifiable and immutable records of tangible and intangible cultural artifacts. It may sound strange to “tokenize” a ceremony, a language, or any aspect of a local culture, but I mean that literally, not proverbially.

Read more: How traditional artists use Web3 to meet new audiences

Blockchains not only make it easy to keep track of these units of culture, but also allow people to share their art and knowledge with the world. NFTs are a powerful funding tool for local charities and communities, and unobjectionable secondary markets (often with fairer pre-scheduled royalty distributions) mean communities can continue to benefit from cultural exchange in the cryptocurrency age.

As mentioned, markets are destroying much of the world’s interesting and unique cultures by encouraging commodification and homogenization. But more efficient markets, backed by crypto, can help reverse the trend. Peer-to-peer financing ensures that the proceeds of the trade go directly back to the community.

ReFi is a new income and employment generating heritage financing vehicle that directly benefits the communities and artists who work to create and protect this heritage and ultimately preserve this heritage for many generations to come.

As ReFi awareness increases and more projects begin to adopt its principles, we are likely to see a broader range of applications for this transformative technology.

One area that is ripe for disruption is impact investing. Impact investing is a type of investment that aims to generate financial returns and social or environmental impact.

With ReFi, it would be possible to create “Impact DAOs” that invest in projects that have a positive impact on the world. These decentralized autonomous organizations (DAOs) could be used to finance everything from renewable energy projects to affordable housing initiatives. Web3 brings a new level of transparency and accountability, ensuring funds are distributed fairly among all parties involved.

Another area where ReFi could have a big impact is community governance. In many communities, decisions are made by a small group of people, often without input from the community at large.

With ReFi, it would be possible to give everyone a voice in how your community is run. This could lead to more democratic and effective decision-making, as well as better social outcomes.

The world of cryptocurrency is often seen as a Wild West, filled with scams and get-rich-quick schemes. As Web3 enters more mainstream channels, we have an opportunity to change that perception by using our skills and available technology to shake up the status quo and build a better and more equitable world. And these are the degens we hope to see win.