September 15, 2022

ReFi + Celo: How this next iteration of DeFi could save The Planet

The conventional methods to finance are far too narrow to provide a comprehensive solution to the current systemic problems. The increasing incorporation of environmental, social, and governance (ESG) criteria into investment decisions is a welcome development, yet, its primary focus is on mitigating adverse effects.

Even investment plans to produce a positive net effect typically concentrate their efforts on a limited number of goals. They frequently fail to consider how results are delivered or who ultimately benefits.

Today, most banking and lending activities overlook their actions' social and environmental repercussions. This is the issue that regenerative finance (ReFi) can fix.

ReFi provides social enterprises, community-led projects, and vital cultural and environmental initiatives with financing to maximize their success. It integrates various types of capital, such as investments, loans, grants, and more.

Regenerative finance employs the utilization of monetary resources as a tool to address systemic issues and regenerate communities as well as natural habitats. Its purpose is to promote healing while also developing shared values.

The accumulation of profits is not the goal in and of itself; instead, they are a means to that aim. Circulation, rather than accumulation, is the focus of regenerative finance.

In this article, we discuss the integration of ReFi with the Web3 DeFi project, Celo, touching on these points:

  • How ReFi Works
  • What is Celo?
  • How Celo Works
  • Celo + ReFi

How does ReFi work?

ReFi adopts a comprehensive approach, considering the interconnected nature of the causes and consequences. In addition, it makes the distribution of capital more equitable by doing away with repayment terms and collateral requirements that siphon off resources from communities.

ReFi accomplishes this by revising exclusionary credit standards, involving core stakeholders in decision-making, and otherwise rebalancing the scales of economic control.

Lastly, regenerative finance goes beyond the transactional: It is relationship-based, a quality that may sound impracticable but opens the way to all of its other features. Regenerative finance transcends the transactional.

What is Celo?

The future of Web3, also known as the third generation of the internet, is heavily dependent on implementing decentralized financial systems. However, businesses have encountered challenges in distributing DeFi initiatives to a broader audience of end users.

The Celo project is a blockchain ecosystem that intends to link users of cryptocurrencies to smartphone users. Celo blockchain uses the EVM designed for mobile users, with the ability to have cheap transition fees that anyone can pay using tokens or stablecoins.

CELO logo diplayed

The mainnet of the Celo project was released in 2020. Using a decentralized network and digital contracts enables users to send money to any recipient directly from their mobile devices.

By leveraging phone numbers as public keys and creating a native stable-value token, the Celo blockchain protocol seeks to remove some obstacles to adopting crypto-assets.

The network facilitates the creation of decentralized apps and smart contracts. Its initial application, Celo Wallet, aims to create a mobile-focused social payment system.

Advantages of using Celo

The Celo project's focus on mobile devices is one of its most significant advantages. The platform's focus on high-end and low-end smartphone users may be a critical factor in accelerating the adoption of cryptocurrencies.

However, the DeFi platform must prepare for slower Internet connections as it was created for low-end cellphones. Consequently, the Celo project is rapid, enabling users to synchronize the blockchain in the least amount of time and finish database searches quickly.

It is intended to address issues like excessive latency and limited bandwidth, which users of entry-level smartphones frequently experience.

How does Celo work?

Celo is a blockchain that implements smart contracts at layer one and is compatible with EVM. Celo is a platform that prioritizes mobile use and makes it possible for anybody with a mobile phone to access financial "dApps," also known as decentralized applications and crypto payments.

The network focuses on third-world nations and "banking the unbanked." Cryptocurrency, cross-border payments, and all of the decentralized apps that exist on Celo are now accessible to anybody with a mobile phone in a way that does not require permission, is resistant to censorship, and does not require trust.

There are two major cryptocurrencies supported by Celo: Celo (CELO) and Celo Dollars (cUSD). The native asset and governance token of the system is denoted by the symbol CELO (CELO). It is a utility that allows users to participate in the network consensus (through its Proof-of-Stake mechanism), pay for transactions that take place on the chain, and vote on governance issues.

Celo's stablecoins, cUSD, and cEUR, are maintained by utilizing a two-pronged method of price management. The first of them is called Mento, and it is a one-to-one stability mechanism that makes use of Celo's native token. The second step is to ensure that the CeloReserve always has an asset reserve that is adequately collateralized.

dApps on display with a digital network background

Users may make money by purchasing CELO valued at 1 USD on the open market, exchanging it for 1 cUSD via the protocol, and then selling that cUSD for the market price when the demand for the cUSD increases and the market price climbs above the peg.

Similar to this, users may make money by buying cEUR at the market price, exchanging it for 1 cEUR worth of CELO via the protocol, and then reselling the CELO to the market when demand for cEUR declines and the market price falls below the peg.

To guarantee a healthy velocity of stablecoins that circulate and are used for transactions on Celo, those stablecoins are also backed by the Celo Reserve. The Celo reserve is a diverse portfolio of crypto assets that enables the Celo protocol to adjust the number of stable assets available to users in response to demand.

To sustain the peg of its stablecoin family, Celo uses various diverse cryptocurrencies stored as reserves. Under governance voting, which determines the reserve's present composition, this stability mechanism may be characterized as a mix of the seigniorage and crypto-collateralization models.

Celo and ReFi

Celo is ecologically friendly due to its use of the POS consensus mechanism throughout the design. Creating a prosperous world for all people is at the heart of Celo's goal. They intend to accomplish their goal by charting a new path in the history of money.

One that eliminates the influence of the invisible hand on society and creates a self-sustaining engine for the common good by building a global financial system that makes the conditions of prosperity.

The concept was first presented in the book Sacred Economics by Charles Eisenstein. According to the author, if you back the money with more of the things you wish to see in the world, you will obtain more of those things.

The Celo team is dedicated to making their protocol the engine that drives the future of regenerative economics. It promotes sustainable development and uses its services to increase social and environmental projects' transparency, accessibility, and profitability.

ReFi is permission less, so anyone can contribute, use, and study it. This helps facilitate its climate goals by leveraging blockchain technology and smart contracts. Also, ReFi is still emerging but has three important categories about it:

  • Natural Capital: Smart contracts enable programmable value transfer that breeds new economic activity for a regenerative environment,
  • Community Commerce: Commerce in the web3 ecosystem with the community using the token or cryptocurrencies in products, services, assets, etc.
  • Financial Tools: With a connection to the internet and a mobile phone, anyone has access to financial tools, and Web3 provides financial inclusion.

Examples of projects using Celo to create ReFi apps

  1. Climate Collective is an alliance of businesses, goods, rules, initiatives, innovation networks and a thousand Web3 entities dedicated to halting and reversing climate change.
  2. Flow Carbon is tokenizing carbon credits to add them to the blockchain and essentially facilitate the flow of funds back to the projects which need it to accelerate their ecological efforts.
  3. Astro Protocol is developing tools to interact with spatial and location data, which will serve as the foundation for web3 and a large number of regenerative finance protocols that employ spatial and location data to back environmental assets. Web3 will support these financial protocols.
  4. The Toucan Protocol is interested in building Web3 building blocks for the regenerative economy. They have around 20 million carbon credits that have been tokenized and are managed by the Toucan meta registry. Toucan protocol brings programmable carbon to web3, unlocking its potential for a regenerative economy. It opens new opportunities for regenerative and distributed economic systems. It has a toucan bridge, meta-registry, carbon pools, and more. They have a vision that involves integrating activities that promote regeneration into the foundation of our monetary system. Therefore, simply possessing money, retaining money, and utilizing cash contribute value to the cause of preserving the environment and restoring ecosystems.
  5. MOSS is dedicated to the protection of the Amazon rainforest. One of their values is the token (MCO2) which is also based on certificates that meet projects around the Amazon. MOSS also has an NFT Marketplace and offers conservation parcels of 50 hectares of rainforest to interested parties.


The Celo community has set out to build one to demonstrate the potential of a carbon-negative, regenerative economic system. ReFi is an essential step in the web3 ecosystem to mature the technology and its approach, help nature, and, why not, receive rewards.

ReFi is in its beginnings, and there are many things to do and approach. Also, for the developers, there are many grants given for Polygon and Celo to build ReFi projects, so it is essential to consider it to increase the potential of this financial system.