Industry Series - Regen Network Summary
Human-driven environmental degradation is a tragedy of the commons. Emissions, deforestation, the acidification of the oceans, the reversal of biodiversity, and top-soil erosion are only obliquely considered in the pursuit of profit—such are the negative externalities of commerce. Some efforts have gone towards internalizing such costs. Governments levy Pigouvian taxes on gasoline and plastic bags while offering credits for renewables usage. More effectively, emissions trading, or cap and trade, offers a market-based approach that incentivizes companies to pollute less.
While such mechanisms are net positive, they fall short in a few ways:
Cap and trade addresses pollution (without consideration for other types of ecological damage) and does so at solely a corporate level (little participation at SME/individual/farmer level)
Verification of carbon units is onerous/expensive
Land stewards lack easy access to capital to shift to regenerative agriculture
RegenNetwork leverages a purpose-built blockchain to internalize environmental externalities and address a range of ecological problems. Through its ecological ledgering system, RegenLedger, built on the Cosmos SDK, Regen aligns land regeneration with economic outcomes. RegenLedger is a proof-of-stake blockchain that aims to serve as the Earth’s registry for ecological claims and assets.
The RegenLedger consists of two core capabilities
Ecological Proofs: Verification and analysis of ecological outcomes
Market: An open, liquid, and auditable market for the issuance and exchange of ecological credits
Ecological Proofs
The distributed, immutable public RegenLedger acts as a source of ecological truth for all participants in the Regen ecosystem. An open database makes it possible to audit which authorities said what about which requirements when. With the proliferation of ecological data from satellites, drones, IoT sensors, the capacity to verify and reward granular ecological outcomes is huge. That the ledger proves outcomes such as top-soil improvement or reforestation unleashes a layer of economic activity on top.
Market
With trustworthy climate accounting in place, tradeable ecological assets are earned by those who create them and transferred to those that need them (brands, companies, etc.). As the ledger grows longer and the platform grows wider, groups will create and trade new types of ecological synthetics. Regen’s oracle network makes it cheaper and easier for land stewards to A) authenticate and earn credits and B) access a liquid market of buyers.
Beyond direct exchange of eco-credits, the ledger serves as the bedrock for various economic arrangements, many of which can be automated with smart contracts. We can expect to see subsequent growth in both financial instruments (e.g. green bonds) tied to ecological benchmarks and to parametric insurance for crops and disaster.
Regen forges its own positive feedback loop: proof about ecological outcomes unlocks new asset markets which makes achieving those outcomes profitable for agents. A profit-based, practical solution to environmental degradation.
Disclosure: TJ Ragsdale or Lupine Capital I, LP may hold some of the tokens mentioned in this piece. Vulpine View serves in a purely educational capacity and does not provide financial advice.
Resources: Whitepaper, Interview w/ Gregory Landua