ReFi, DeFi and DeSci: What Do They Mean?

ReFi, DeFi and DeSci are some abbreviations people who read cryptocurrency blogs have probably seen appearing more often. Here’s a look at what they mean and how they affect things in real life.

What Is ReFi?

Not to be confused with refinancing, ReFi, in the context of cryptocurrency, stands for regenerative finance. It seeks to use the blockchain and cryptocurrencies to cause positive change and solve systemic problems, such as climate change.

People interested in ReFi also want to use the blockchain to improve the utilization of carbon credits. Now, there are ongoing issues with the same credits getting counted twice, and the potential for fraud exists. However, ReFi would use the blockchain as a traceable and immutable system for carbon credits. It would also include retiring the credits as appropriate to prevent misuse.

What Is DeFi?

DeFi, or decentralized finance, involves creating a new, internet-based financial system that uses the blockchain and non-traditional approaches to establish trust between the various parties. The traditional financial system features intermediaries, such as banks and stock exchanges. However, DeFi eliminates those and uses a type of specialized software called smart contracts to manage the specifics of any agreements.  They allow processes to happen in minutes that once took hours or days.

Statistics indicate there’s about $77 billion in total value locked for DeFi projects at the moment. That’s a standardized way of measuring value associated with crypto projects. There’s also been a recent increase in trading activity on DeFi exchanges, indicating more people are getting interested in it.

What Is DeSci?

DeSci, also known by its full name of decentralized science, seeks to uproot the well-established practices and norms known by professional scientists. It’s still in the early stages, but DeSci aims to capitalize on some broader trends. One of them is to change how research gets funded and peer-reviewed, making those things happen democratically and with greater fairness.

Another priority is to change who owns and controls the data collected during scientific research. For example, someone participating in a study might agree to use a health wearable for a certain period. One of DeSci’s goals is to have that person own and have input on what happens to that data after the study ends.

What’s Happening With ReFi, DeFi and DeSci Currently?

DeFi is arguably the most established of the three definitions discussed here. A company called Cred Protocol recently published the first results of an automated credit-scoring system for people who use DeFi platforms. There’s also Osmosis, a DeFi initiative that cuts intermediaries out of market-making activities.

KlimaDAO is one of the early examples of what’s possible for ReFi. It centers on offering people a carbon-backed native token that allows anyone to take part in the carbon economy. There’s no need to use a broker or any third party.

In the DeSci space, there are efforts like VitaDAO. People associated with it want to change research about human health and life span by decentralizing drug development and funding. There’s also the SCINET platform, which enables investors and retail partners to directly support scientific research. Another aspect of SCINET allows researchers to document their work on the blockchain.

Some people even hope this push towards decentralization could change how movies get made by giving fans more control over the creative process. In such cases, the blockchain and crypto tokens would provide people with voting rights, letting them have their say about certain film decisions.

An Exciting Time

ReFi, DeFi and DeSci have not yet reached mainstream popularity, but they’re starting to attract attention within the crypto community and elsewhere. Even people who have never purchased or traded cryptocurrency often find themselves feeling frustrated by how a relatively small number of entities wield so much power and influence. Efforts like those described here could start to shift that imbalance and spread the authority more evenly across society.