Thread by @mr_adrianxyz

There has been a lot of buzz lately about the interplay or contrast between #crypto and #climate. I think one can help the other! Here’s why: 🧵 1/14

1. 🔍 Trust and transparency

The most prominent problem with carbon markets – one of the most effective tools against climate change – is trust and transparency. The most significant pain points are double-counting (claim) and greenwashing. 2/14

And the issue is not a small one. The financial damage caused by dubious projects runs into billions. Every year. 3/14

➡️ This is where blockchain technology can provide a level of data availability and transparency that is simply not available in traditional financial systems, let alone the conventional carbon market. 4/14

2. 🧑‍🤝‍🧑 New ownership structures:

One of the biggest structural problems of the climate sector is that most climate business models do not lend themselves to innovative investment vehicles such as venture capital. 5/14

➡️ Web3 tosses a new option into the arena: Decentralized ownership and decentralized organizations ensure that the work done and value contributed to the ecosystem is returned to the ecosystem. 6/14

This leads to an aligned incentive structure that is regenerative rather than extractive (the idea behind VC). 7/14

Particularly in the climate sector, where most of the work is done with communities and/or land managers, this results in financial incentives for all rather than the few. 8/14

3. 💰 🌳 Tokenization and commercialization of natural resources:

It has been difficult to value or invest in natural resources until now. There was no transparent and efficient funnel of capital into projects (which are predominantly located in the Southern Hemisphere). 9/14

➡️ On the blockchain, basically anything that can be verified can be tokenized and thus turned into an asset. Project developers suddenly have the opportunity to add value to their previously quite intangible assets. 10/14

Building on this, new financial products and market structures can emerge that take account of climate compatibility: Collateral for use in loans or bonds, pegging to a currency, or implementation of climate assets in complex financial products. 🧮 11/14

This will help grow the market by integrating it into our current economic systems.

Needless to say, these are not silver bullets. But crypto definitely opens up new financing possibilities that didn’t exist before. Even a movement has developed around these ideas. 12/14

The community – a global and vibrant society, its members come from all sectors, united in the goal of contributing to the climate – addresses the question of a new ownership and financial system in the climate sector and is called Regenerative Finance #ReFi. 13/14

What other benefits or use cases do you see for the intersection of #web3 and climate?
I’ll be sharing more about this in the coming days. 14/14

Photocredit @ReFiDAOist @climateXcrypto :-)