DappCon 2023: How ReFi Realizes The Purpose Of Blockchain - Luuk Weber

Transcript

good morning I'll give you all a couple seconds to settle in how's the bare Market going people how are we feeling good who here feels that you're losing or have already lost your motivation to build in the web three space motivation who still has motivation to build in the space couple hands everybody some of them who feels that we have made meaningful progress in the last two years with the capital that we had and less than half of the people that's not

good all right so today I'm going to give you a quick overview of the emerging regenerative Finance space and I'll make the argument why building for the global crisises is the best use case of blockchain and while you as a builder should probably be looking into solving impact problems instead of only making money who remembers this 2008 I was like 12 when this happened so I don't know much about it but what I do know is that this was the financial crisis of 2008 and that there was a lot of um pain and friction behind this picture what you see is an investment Bank going bankrupt but what you don't see is all the people in the back losing their homes losing their fate losing their faith into financial institutions into

institutions in general a global crisis that took years and years for people to get over um but it also created one of the most relevant Innovations of today's day and age the Bitcoin white paper um and following that the launch of Bitcoin it was a direct relationship or a direct reaction to this crumbling Financial system it was looking for an alternative or a compliment to this bureaucratic inefficient impersonal system system that was clearly not working for us already 15 years ago and still today with the Bitcoin white paper we started this revolution of blockchain

which took us all the way from cryptocurrencies to this refi space that I'm going to tell you about but let's settle into the day a bit looking at some of the biggest challenges we face today this is a shot from the world economic Forum who's afraid of the world economic Forum hands no Maxis awesome two hands okay they're not that bad maybe they are but we can do better um look at a couple challenges that they're prescribing they might be wrong but it's very likely that they will be coordinating efforts energy money to these challenges we can't ignore it at the top of it you see that it's all environmental climate Action Extreme weather biodiversity loss um but we're also seeing more suicidal Society

where the economic side is only down at the bottom so as we're seeing we are starting to realize that our systems aren't just under Financial pressure but we're also under environmental pressure under pressures in society now we can get this Bleak image from this it's like oh there's so many challenges right there's climate change is getting hot it's freaking hot this summer was incredible bad to be honest um and we can look at the numbers um climate change will cost us about 23 trillion by 2050 the global depth right now is for the is at the highest point ever with the highest leverage ever 300 trillion th 300 trillion US dollar a 3.49 leverage on average that's a lot of

Dept and we're seeing it now we're seeing it in inflation the average this year or last year was 7% all across the board this means that people have 7% less value 7% less well-being 7% less houses it's struggling it's taking people's value away but what if we turn it around what if we don't look at these things as challenges or problems but as opportunities because in business you're being rewarded for solving problems for building something that solves real people's problems and these are big problems if you look at the climate change market right 23 trillion that's way bigger than any part of the blockchain space nowadays it's bigger than than a than the majority of

economic value that we're coordinating right now so it's also enabling us with our new Innovations to look at these things and say hey if the world is gravitating towards solving these problems and we have innovations that they've never played around with why don't we spend our time here a common threat among these among these challenges is that although they're Global they can only be solved on the ground We Can't Stop climate change just from our living rooms here in Berlin or wherever in Europe we need to make sure that the actions happen all across the globe and that it happens efficiently because in the end it's all coordination beautiful meme by everybody essentially in the refi space um but in order to get there we need to

accelerate these local coordinations and we can do that with the blockchain infrastructure our open source knowledge and Tech allow us for the first time ever to have pure and true digital assets and digital settlement we're able to coordinate Capital around the world faster than ever before and by Innovations in the measurement reporting and verification space combining AI machine learning blockchain we're able to measure impact better than ever before and valuing it by doing this we're a we're able to allow local coordination like never before the challenge most of the actions we're doing nowadays are still in this degenerative or value extracting Paradigm but what if we move from the

generative to regenerative what would it looks look like if our existing Financial stack on top of blockchain the defi space moves towards something that's more regenerative what if we go from profit extraction tokens that are here for the pump and the dump let's make money in 18 months and get rich and then exit how do we move from there from this profit generation and extractive economics toward work a world that's value re that's about value realization and regenerating improving the state of well-being of all moving away from the shortterm thinking in a year or two years lock ups of 18 months to long-term oriented what would our space be in 10 years or 15 years from today what is the world we want to live in moving away

from this mechanistic or red cist mindset of just focusing on one single thing one kpi money to a more natural and holistic view of the world of the value we create this is a beautiful graph that explains we're going of visualizes this transition from degenerative to regenerative from this conventional thinking where everything was built and structured like machines like factories where people were working like slaves 925 9 to9 6 days a week to a world that is built more like nature more patterns more um holistic holistic thinking and that's when you get into this transition so initially we were this conventional um mindset we were taking everything our e economies were

just going into places extracting value and over time we've started to move towards sustainability we realized that we're destroying the Earth We're destroying the social Fabric and we need to slow it down we need to do less bad now are we going to be able to make the world a better place if we only do less bad probably not we need to start doing good we need to start make things better again and that's where this regeneration comes into play it's taking less energy to do more it's a mindset shift from extraction to creation and it's on top of this mindset shift that we're seeing more and more Innovations especially over the past two years that are tackling some of these crises one of them are the environmental projects think from all the way from

Unchained carbon credits to better measurement reporting and verification um you may know some of these projects clim Dow they were the first ones to use panomics to buy a ton of carbon credits with the intent to experiment with how we're able to accelerate that market with new capital that was powered by tuken a Project based in Berlin and Switzerland that is bringing on these traditional claims or credits from the web2 world and bringing it on to web 3 allowing for more transparency faster settlement better markets or region Network taking it one step further they're making web three native standards for measurement reporting and verification and carbon credits or climate credits by creating these markets we're able to create an

experiment an experience that's 10 times better than the conventional systems right now if you're a country like um Germany or the Netherlands and you want to invest into carbon credits you're most likely going to end up with a claim on a um on carbon of a forest in Brazil or somewhere with very manual and slow and expensive ways to measure report and verify that there was an article a couple months ago that over 90% of these claims were false they didn't have any value were false claims and that has a big effect on people like us right we're not going to buy anything that's 90% a scam besides cryptocurrencies but um there is a way forward and then there's a project like

gain forest for example that's using Advanced AI machine learning onchain assets to just create this environment where you can literally 3DC every single tree and there's no argument to be made this is happening people are planting trees are making the world a better place and are being rewarded for it let's look at these economic crisis we just had circles right before me they are doing amazing work um and there's other projects that are also doing comparable or similar work um so for example in Kenya you have a project called grassroot economics who've heard of grassroot Economics before cool then I'm going to teach a lot of people something new so grassroot economics is a project that started with a Red Cross in Kenya they have created a Mutual Credit Network in about 200

communities over 50,000 users um and they've been able to leverage $1 million of the Red Cross to coordinate about $6 million of value every year and they're essentially allowing people to leverage their donations to leverage their impact um and they're now scaling to other countries um like Zimbabwe and if I'm not mistaken um karura another country sorry for that KN that then there's eup who have been providing onchain loans to Farmers in Latin America for over four years already they started all the way back on exile they've processed over six million of loans and what they're doing is they're enabling these Farmers that are traditionally captured into very

extractive systems paying up to 40% um um Returns on their loans and allowing them to be matched with people like us who are eager to get 10 11 12% on our money um good dollar impact Market also Ubi projects that are taking similar approaches to circles some of them are adding in microloans others are adding in identity um but really trying to find ways to allow local communities to coordinate resources without being dependent on foreign Capital without being dependent on for example the US dollar flowing into their economy to create action because a lot of communities do have the talent and the land to coordinate value but what they're missing is this cash the capital

to realize that value then the social side there is a project called Reid with heard of reow Al not too many people awesome so refi is almost like a spin-off of something like bankl da or the Dost and what they're doing is they're creating a social cultural and economic movement around this concept of regeneration and what they've done they've created over 40 communities around the world that are organizing meetups and events to talk about this concept of regenerative Finance to bring in talent and capital into the space um and today they have about 1500 members then there's green pill from one of the founders of gitcoin that is taking a similar approach and

trying to leverage the blockchain technology that we have to allow local communities to do better and get access to these um Solutions if you ever wanted to live with a bunch of people for free the Dream Factory if you hold their token you're able to live in their co- in their co-living environment they making a um good living space and later today they're also sharing um about all of that at an event we're organizing um then there's regions unite if you're here on Friday and Saturday they're doing a regions Unite Here in Berlin uh it's a great opportunity for you to not only listen to what people are saying but really connect with other people that are trying to find a way to have a positive impact with the innovations that we're

building now the capacity of blockchain is increasing rapidly this year alone we're seeing new Innovations from scaling no longer being a big issue um to um token bound account smart wallets Progressive web apps there's so many innovations that allow us to create a ux and experience now that is 10 or even 100 times better than what we had maybe five years ago when I came to my first eat Berlin in 2019 we couldn't even imagine the solutions that we had nowadays back then everything was proof of work we were polluting we were destroying we were taking it was all about learning how to even run a stable blockchain now a couple years later we don't even think about that I think very few of the talks at this event have been about oh how do

we make maintain a stable blockchain how do we do these things we're now progressing to the actual value layer and how do we realize value in the real world so imagine being able to move away from a currency that like Bitcoin that is purely focused on um security of a network which is a very basic function we' have been able to accomplish that now across the board um towards something that is regenerative by Design something that's driven by for example um nurturement of nature the stewardship of nature in communities or the ability for a solution um to tokenize value and bring it onchain it's from this point we can

start imagining currencies that are um embedded into the real world and create these positive feedbacks Loop that creates these regenerative economics where every time that it's spent it creates more conditions for Prosperity where every time with every person joining the economy we're increasing our capacity to do good we're increasing our capacity to Value it properly and we're increasing our capacity to realize that value almost like a memeable impact Network and we're quite close I would argue uh we're getting better and better at like I mentioned measuring reporting and verifying this value we're getting better and better at acknowledging the value of nature right world economic Forum all the nations they're looking at it they're pouring more and more money

into it and it's really creating this opportunity for people like us to innovate with this new technology but why would you do it does it pay well honestly not that great at this point however there are so many new ways of value that you're going to appreciate as you embody this regenerative mindset as you're going to move past just prices of currencies and looking at number of users relationships impact and um I can attest to it so over here you see a couple of screenshots of the things that I am most proud of it's no solution it's not a tech piece it's nothing it's real world things happening in the real world that have been created by these Solutions um so the first and

third picture are from the collectivo festival that we organized in the Caribbean last year we had 700 attendees we piloted our um impact economy solution with over 400 users um and overall that was a mind-blowing experience it's something I will never forget and it's something that keeps me motivated even if prices go down I can look back and say we did this we are making a difference in the middle one it's a grant we issued also in the Caribbean to a group of teenagers they're called youth for climate um they're organizing cleanups and education events and back in 2019 already they requested a grant from our unchain da called Cura da and we asked them why are you coming to this Weird blockchain thingy to ask for money and

they said because no one else is taking us serious they've worked with the government with large corporates all cute sprinkling money on them but no one asked them what do you want to do how do you want to have an impact on your community and by our new in Technologies we're able to provide people like them with the tools they need to take action and do it at a big scale so if you're interested in regenerative Finance the best way I would say is to experiment with it either go to val. app which is the main wallet of the C ecosystem which which is a blockchain specifically built for impact projects it's carbon negative so it's actually subtracting more carbon than it emits um by um take by purchasing um carbon credits and um

burning them or if you're even more interested we're organizing a refi fundamentals event later today it's from 2:30 onwards at factory the weight list is already long but if you really really want to come give me a hand I'll find a way to get you in um there we'll have four projects that are going to give an explanation of their case study um for example gain Forest will be there explaining the challenges of the traditional mrv stage and explaining how their Innovations are able to surpass these limitations and build a solution that hopefully will be able to have a big impact um so with that I'll go to Q&A um looking forward to your questions and thank you so much hi there um I I work in the space

I'm a big fan of collectivo so thanks for your talk um talking to people that are um building in this space and using carbon credits what I hear a lot is that um there's a lot of distrust you're almost piling distrust on top of distrust because you have to convince people about the value of carbon credits and then you have to convince people of the value of blockchain and outside this room um you know blockchain has a lot of distrust so what would be your advice to um Builders and the space that are encountering such obstacles yeah so I think um there's a very sad story last year I gave a talk at an organization called Netherland Mark impact which is like the Dutch young Innovative

entrepreneur Network and I asked them the question who thinks blockchain does more harm than good to the world everybody raised their hand I would say 98% so that's definitely something we need to overcome or find a way around right a lot of solutions coming on nowadays especially with the Innovations I mentioned smart accounts um you're able to do all the things that the blockchain allows you to do without even having to mention blockchain once I think that's just a really good meta if we want to really reach everybody and go to the billions of users we need to let go of our technical terms um and there's ways around it now especially the coming months on the carbon credit side there essentially two Pathways that are seeing one is people realize that the initial

generation of carbon credits are just really bad that's why we're seeing the Innovations on the measuring reporting and verification bringing in AI in and machine learning iot makes a very very big difference um we are able to verify with multiple sources so for example an underground app combined with satellite data combined with a reputation system just makes it much much more trustworthy um but also we're seeing a broadening of the meaning of these environmental credits so we're also now seeing development of biodiversity credits or credits that are also taking in other types of values such as reducing inequality creating opportunity um creating a safe space that are also now being valued slowly um so I think it's really going to take some time before

it's kind of mass Market ready and everybody should be building an impact up but we're definitely seeing positive developments in that direction that will allow it to be a proper healthy Market there in the back thank you for the talk um just commenting on the previous question um we use blockchain and don't mention it uh for an application uh for energy communities where we basically do the payment between the members um and don't need a bank for it uh my question would be um if we think that thought further and you're thinking about

wallets uh how does a wallet look like if you don't want to mention blockchain anymore and what wallet would you say is closest to what you think uh would be a good solution to kind of get around this kind of distrust in blockchain So my answer would be no wallet is a good wallet um I've been really obsessed with smart accounts for the past months um it's allowing you to embed the functions of a wallet natively in an application so the user Journey um in for example friends. te which is like a newer application you don't have to go to metamask and then go to a website inside of metamask what you do is you go

straight to the app it says connect with whatever save your backup wherever it could be on a drive it could be local storage um it could also be abstracted away to a third party um and by doing that implementation of smart accounts you're able to create that whole kind of all the transactions everything can be stored natively so you no longer need a separate wallet and a separate application um and I think that that is really going to make people feel much more confident and um also just the experience of being a user is so much more stable if I um just tell you hey go to this website connect with whatever thing you already have and you're ready you can start transacting you can start doing so I think that that Innovation

specifically I think is going to allow us to just open up conversation with stakeholder groups that we've never been able to convince because they still had to go and write down crazy words and pay gas fees and all those things that were just hurdles along the way um if I had to pick a wallet right now um I would argue for something like rabby if you're an advanced user um or something like valora if you're mobile first um just because they are quite extensive and relatively simple um but generally I do see that we're moving away from wallets being the main um way to engage with a blockchain app and going more and more towards kind of app native um engagements just like we're slowly moving away to almost like like app native chains and things like

that think we can do a question final question no one there nice so we've focused a lot on this talk around impact certificates so being able to say okay I'll buy some carbon credit to be able to offset my impact do you have any good examples of refi projects that are going to be internalizing their impact and trying to uh reduce the amount of environmental damage they have internally and helping other organizations to do that yeah so I think the main Front

Runners right now are layer ones and layer twos they're buying carbon credits or and different types of environmental credits to become carbon negative I think that's like almost like Corporate social responsibility just the big corporate saying oh we need to look good so that's like the first step that you're seeing with polygon cell avalan they all carbon Negative they all buying onchain carbon credits for that claim um but we're also seeing um a next stage like I mentioned with projects like the impact Market projects like um that are creating more um detailed and more native solutions that are separate from the traditional carbon credit claims that are ALS Al gaining in interest

slowly for example Sal has a mandate to have X amount of their treasury in environmental credits um I still think that it's going to take some time a good amount of time for more projects to be able to have the um focus on taking on impact claims into their balance sheet um and I'm even wondering if the majority of that demand will even come from blockchain native projects or if it's more coming from government corporates individuals um all across the board does that answer your question or not really okay any more questions no okay then thank you very much for your talkk um we are wrapping up here and doing a lunch break um this

room will be closed and at 1:30 will be the next talk in this room have a nice break see you then