Web3 Impact No. 6
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Web3 Impact No. 6
A briefing on how Web3 is making the world a better place.
If you are reading this newsletter, you’re probably a Web3 enthusiast and care about sustainability. If so, this week has been a monumental week.
In this newsletter, we spend a lot of time talking about interesting projects that are using Web3 to create a positive environmental impact. But there’s always been an elephant in the room: Ethereum is massively energy intensive. From an environmental perspective, there’s a strong argument that Ethereum’s carbon footprint wipes out any progress made by climate-focused Web3 projects.
As of yesterday, that’s all changed.
Since The Merge, Ethereum has moved from the energy intensive Proof of Work to the efficient Proof of Stake. In doing so, it has lowered its energy consumption by about 99.95%. This is a foundational shift that we should all be celebrating. We’re grateful for the Ethereum community, and core developers’ leadership and execution of The Merge.
Regenerative Finance 101
At its most fundamental level, Regenerative Finance (ReFi) is the idea of appraising the value of natural resources—not based on the cash flows from their exploitation but rather on their preservation and regeneration. For example, if you are a landowner in the Amazon today, imagine that you could generate greater ongoing economic value from preserving the rainforest than from deforesting the land for timber, agriculture or cattle grazing. Better still, imagine it was financially attractive to seek out barren land and actively invest in reforesting it. This approach results in the generation of Land, which mobilizes the factors of production and leaves an individual with more money in their pocket. Imagine that—a way forward to simultaneously remedy the planet and advance the economy. It’s a win-win. For a regenerative economic model to work, we have to: (1) determine the value of preservation/ regeneration, (2) package it into a tradable asset and (3) create liquidity for that asset. Coindesk (11 minutes)
Blockchain’s Role in Climate
What role might the blockchain play in carbon markets? More carbon credits are going onto the blockchain as a way to both track and trade credits. But the advantages of bringing carbon credits on a chain also means that the nuances and differences in quality and origination of different carbon credits are being flattened as they become a tradable digital token. Financial Times Podcast (17 minute listen)
A Manifesto for Digital Ownership
In the Web2 age, major platforms such as Twitter, Facebook, Youtube and Spotify captured the majority of the economic incentive, leaving limited wealth-building opportunities for creators and the distributed masses. But Web3 creates an “ownership layer” of the internet, allowing people to own digital goods and use them to build wealth. Liz Hagelthorn outlines a manifesto for digital ownership with 13 principles of how we can reconceptualize digital ownership. Magic Mirror (13 minutes)
Project Spotlight
STEPN is a Web3 lifestyle app with Social-Fi and Game-Fi elements. Users equipped with NFT Sneakers walk, jog or run outdoors to earn tokens, which can be used to level up and mint new Sneakers. The app has the dual function of incentivizing users to be more active while simultaneously lowering carbon footprint. To date, the app has offset more than 7,000,000 kg of carbon. STEPN
Web3 Impact
Web3 Impact is a briefing about leveraging Web3 for positive social and environmental impact by Banks Benitez and Kyle Westaway. Photo by FLY:D.