Regenerative Finance (ReFi): What Could Future Financial Systems Look Like, and How Would They Work?

When in high school, my class got to visit a community center on the outskirts of my hometown. Naturally, we got most excited when we realized they had a game planned for us.

We were split into groups that represented fishing companies—and we could plan our fishing strategy, improve the efficiency of our ships, negotiate with others, and so on.

But it wasn’t much fun in the end. After a while, the game ended because there were no more fish in the sea. So, they let us play again—and admittedly, we lasted longer this time. Still, the outcome was the same. The sea was empty, and we all went bankrupt.

The game theorist James Carse, who studied human conflict and cooperation, would likely have a simple conclusion: We were playing a “finite” game, a game played with the purpose of winning.

But are these the ideal games to be playing in the real world? You may win in the short term, but if all the fish are gone, surely you’re doomed, too? How can we create a win-win situation for business and the planet? These are exactly the kind of questions that have inspired the birth of a movement called regenerative finance (ReFi).

Redefining What Wealth Means

Rather than finite games, ReFi perpetuates “infinite” games, interactions where the objective is to collaborate in order to keep playing.

ReFi challenges the extractive models we’re used to—those that prioritize short-term gains at the expense of our environment and society. Instead, it promotes sustaining or, better, regenerating resource capacity over time.

In short, it encourages us to think not just about our immediate business dealings and actions but also about their effects on the world around us.

As Dalibor Černý puts it, it’s a way of thinking about the economy that takes into account the negative externalities that traditional capitalism has often ignored. These include environmental destruction, social inequality, and financial instability.

Through this more “holistic” lens, it’s no wonder that redefining what wealth means is also a key element of regenerative finance. In fact, it talks about not just one (financial) capital—but eight different forms. There’s spiritual, social, material, financial, living, cultural, and experiential capital.

In the fishing scenario, a regenerative action could be reinvesting a percentage of profits into ocean protection. At first, this may not sound like the smartest business move. But when we zoom out, regeneration offers many interesting opportunities.

If we went further, the fishing company could diversify into algae cultivation, providing a source of nutrition and benefitting the marine ecosystem. Or they could adopt fishing nets, crafted by the local community, that prevent unintentional capture of non-target species like dolphins. By doing so, they could reap different benefits, including attracting new, more value-aligned customers.

The important piece is that by adopting regenerative practices (and, subsequently, investing in different forms of capital), companies can not only protect the environment but also build a stronger, more adaptable, and resilient business model.

They can become so well anchored in their ecosystem that they won’t collapse facing a challenge—but rather evolve with them.

So… Why Blockchain?

Just like decentralized finance (DeFi), ReFi is sparking a whole movement. But while DeFi pushes regulatory boundaries to optimize for profit, ReFi leverages the web3 technologies to aim for lasting, positive global impact.

Well, can’t you do regeneration without web3? You can! Let’s say you start a regenerative family farm. You reinvest some profits into a forest that protects the wildlife and allows you to sell carbon credits. You grow organic produce, sell it to the local community, and organize workshops, around beekeeping, for example. It works great, but how about a larger scale?

A lot of problems our societies face are down to poor coordination. It’s not like you wake up in the morning and choose to exploit farmers by getting coffee that doesn’t pay them fairly, put on a t-shirt made by children, or damage the planet by taking a car ride to work. Hardly anyone does.

Yet, these actions persist due to our failure to coordinate and create better, more transparent, and just systems.

Let’s come back to the fishing example. Imagine you had to convince five or fifty fishing companies to collaborate and collectively reduce their catch. They likely wouldn’t trust each other, wouldn’t see benefits in following through, and look to game the system.

But with blockchain, this could be different.

Blockchain is a powerful tool for coordination.

By consolidating diverse data streams into a unified, transparent ledger, blockchain can transform scattered information into a cohesive narrative. This clarity can guide collective action towards more sustainable choices, making it evident that certain paths are simply better for all involved.

And with transparency, it keeps everyone accountable.

Web3 tools are pivotal for ReFi's mission. Tokenized carbon credits ensure traceability and accountability. DAOs empower communities with decision-making, fostering trust and collaboration.

And with DeFi, financial transactions become transparent and less reliant on intermediaries. Together, these tools address our societal coordination challenges, positioning ReFi as a scalable and effective approach to regeneration.

Regeneration in the Real World

There are many great ReFi examples out there, but one of my favorites is Plastiks. It’s a non-fungible token (NFT) marketplace where artists can link their creations to plastic recovery projects.

When you buy a piece of art, you're also funding the removal of a specific amount of plastic from the environment. And as the art's value grows, the buyer benefits, too.

Big names are taking notice. FC Barcelona, for instance, has teamed up with Plastiks to launch the "Unleash Your Passion" collection to tackle the plastic waste from football matches. Each sold NFT, represented by unique digital art, contributes to cleaning up the environment.

Those who buy these NFTs not only back a green initiative but also get special content and rewards from FC Barcelona.

Through initiatives like these, businesses can foster a genuine connection around shared values with their community and, importantly, open up a fresh marketing avenue. In short, it pays off.

My personal journey in the ReFi space has taken me to Topl, a blockchain protocol dedicated to fostering a more inclusive economy. I’m also passionate about ReFi DAO, which is building a global regenerative community. To activate locally, we are starting local chapters—and I co-founded the one where I live in Medellin, Colombia.

We’ve carried out activities like community cleanups and tree planting. While achieving regenerative action on a massive scale remains a challenge, we're making progress, one step at a time.

For those eager to delve deeper, there are invaluable resources available. Web3ForGood, Crypto Altruism, and Impact DAO Media to the Green Pill podcast are just a few worth exploring.

It's not just about winning today but ensuring there's a game to play tomorrow. While blockchain can't regenerate our world on its own, it gives us a framework to collaborate, innovate, and make decisions that count.

It's a journey, and every step we take, big or small, brings us closer to a future where business and the planet thrive together.

This article was originally published in Czech on Patreon.