The rise of Crypto’s brand of regenerative finance

When society broke down, the people stepped up. This is what Manuel Alzuru observed in 2020, during the depths of Covid, when he moved to Barcelona. He had just caught Covid. “And there was no help,” Alzuru says now. “All the hospitals and clinics had completely collapsed.”

Then Alzuru noticed something in his building. Something surprising. Something even fantastic. People had put sticky notes on the front door of the block of flats saying things like “The neighbor on the fifth floor needs medicine” or “The neighbor on the third floor needs food”. Alzuru saw similar notes on other buildings. He realized that the government could have failed, but the neighbors rallied to do the right thing.

Alzuru loved the spirit of this generosity, but he was surprised that there wasn’t a more structured system to coordinate aid. “It was kind of crazy that there are apps to show your butt and show your muscles [like dating apps]but there are no applications to help each other.”

So he created FightPandemics, an online portal to connect the people who needed help with those who wanted to give. Then he took the idea one step further. Alzuru had already dabbled in Web3 (contributing to a few early Decentralized Autonomous Organizations, or DAOs), so he launched a project called DoinGud, which began as an NFT marketplace that used its proceeds to fund charitable causes. It is now an ecosystem intended to fund worthy causes.

“The idea is that we come together from all over the world and we start to decide what makes an impact,” Alzuru says, cheerful energy in his voice. “Instead of relying on governments, we come together and we organize ourselves.”

DoinGud is one of the growing number of “Regenerative Finance” projects, or “ReFi”, which can be loosely thought of as an antithesis to the “Degen” culture, as in degenerative gambling. The Degens care about making money from crypto, the Regens care about doing good. Imagine stripping Web3 of the price speculation and just looking at the social impact.

“I think of regenerative finance as a system that increases resource capacity over time,” says Kevin Owocki, a software engineer and one of the leading voices of ReFi. Owocki is the co-founder of GitCoin (which uses crypto to fund open source projects) and the author of the book “Greenpilled: How Crypto Can Regenerate the World”, which is something of a Regenerative Finance manifesto.

For Owocki, ReFi is a way to replenish “public goods,” and that can take many forms. “We don’t just want to regenerate the wallet,” he says. “We want to recreate our material capital, our cultural capital, our intellectual capital, our spiritual capital.”

The scope of ReFi is still a bit unclear and up for debate. “I don’t think it’s something that’s super well defined,” says Paul J. Dylan-Ennis, a professor at University College Dublin who studies cryptocurrencies and has written about Regenerative Finance. He describes your typical “Regen” as an Ethereum enthusiast who is “trying to build infrastructure that is long-lasting,” and often focused on “climate-friendly projects.” (Although both Owocki and Alzuru are quick to clarify that the scope of ReFi is broader than environment and sustainability.)

The “Greenpilled” book includes forewords and endorsements from heavy-hitters such as Vitalik Buterin, Glen Weyl (of RadicalXChange, a non-profit organization that advocates for political and economic reform) and “The Network State’s” Balaji Srinivasan, who (in the book) gives this the encapsulation of regenerative crypto-economics: “As renewable energy of the nuclear variety, it helps make crypto sustainable. It is not zero-sum gambling, or negative-sum hacking. It is a positive value creation.”

These are many abstract theories. How does it look in reality? Arguably the most consequential ReFi project to date is Gitcoin, launched in 2017 (it predates the term ReFi), which claims to have funded $72 million across over 3,000 open source projects. Some of these were small seed projects that grew into juggernauts such as UniSwap and Yearn.

Then there’s the Regen Network, a blockchain-based marketplace that does things like tokenize carbon credits. Or Giveth, which describes itself as “the future of giving” and allows people to donate crypto to projects such as experiments with universal basic income, giving school supplies to children and “relocating Web3 Iranians”.

This is just a small selection. TheReFiDAO shares several examples in a recent blog post (cheerfully framing 2022 as “The Year of Regenerative Finance”) and Owocki highlights others in a recent essay for CoinDesk, expecting 2023 to be the year of “regenerative crypto-economics.”

Manuel Alzuru is a solar punk. He describes it as a form of technological optimism. “I suffer a lot from my government. But I don’t want to be a victim. I don’t want to live in fear. I choose not to live in fear. I choose to live in love. And a lot of people who call themselves Solar Punks had similar values.”

You know those renderings of futuristic cities that have flying cars and lush greenery all over the buildings? It’s Solar Punk. Then Alzuru throws me a curveball: “To be honest, I don’t like the label anymore,” he says, due to a quasi-rivalry with the “Lunar Punks.” (Dylan-Ennis wrote a CoinDesk explainer on the Solarpunk/Lunarpunk divide, and Owocki breaks it down in detail on his GreenPill podcast.)

But even the optimistic Alzuru acknowledges that ReFi has been hurt by the crypto winter. During the bear market, funding has been terrible for regenerative projects. Terrible, says Alzuru. He says that the coffers of many ReFi projects have dwindled, that DoinGud has been forced to trim its team and that “We’re basically all just trying to survive this bear market.”

Owocki agrees that funding has slowed, but thinks of the crypto winter as “culling the herd,” or even a form of natural selection, with projects that survive likely to become the “keystone species” going forward. In other words, donors “become more voters,” he says.

Dylan-Ennis even considers the bear market a blessing for ReFi. “Crypto winter is working in its favor,” he says. “It reinforces their message that we will be trapped in these four-year cycles [of price booms and busts] forever unless we can break the culture, and that’s going to involve introducing some sort of philosophy.”

Now that philosophy seems to be gaining ground. “The movement is going to continue to grow, for sure,” says Alzuru, still thinking about the sticky notes from people who wanted to help. “A social awakening is happening. This is the very beginning.”