In this tutorial, we will explore the concept of moving away from “degen” (short for degenerate) behavior in the cryptocurrency and decentralized finance (DeFi) space. We will discuss the importance of transparency, fairness, accessibility, and robustness in building sustainable financial systems. The tutorial will also highlight some projects that align with these principles and contribute to regenerative finance. By following these principles, we can work towards a more inclusive and responsible financial ecosystem.
The financial crisis of the past served as a catalyst for the creation of Bitcoin and the emergence of the crypto and Web3 movements. These movements aimed to provide solutions and alternatives to the problems seen in traditional finance. However, recent events in the space have highlighted the need for even stronger arguments against degenerate behavior.
To ensure the development of sustainable systems, we must ask critical questions about the values and intentions behind products and protocols. Some key considerations include transparency, fairness, accessibility, and the avoidance of elite capture. It is essential to continually ask these questions as problems may arise over time. Additionally, stress testing token designs is crucial to ensure their robustness in different scenarios.
When building systems, we should not only focus on the individual or the ecosystem but also consider societal and ecological factors. Transparency should be evaluated at different levels, and ecological impact should be considered alongside intended goals. By addressing societal and personal issues, we can better tackle pressing ecological challenges.
Examining the failures of Luna and Celsius, two notable projects, we can learn important lessons about the importance of transparency and robustness. Luna lacked stress testing, resulting in a significant capital loss for many individuals. On the other hand, Celsius suffered from a lack of transparency, which led to substantial capital losses for users. Transparent and well-designed DeFi systems, such as Aave and Uniswap, have demonstrated their effectiveness in stress tests.
The high volatility in the cryptocurrency market can pose ethical concerns and hinder mass adoption. While complete elimination of volatility may be impossible, it is important to explore ways to mitigate its impact. Building more tangible systems through regenerative finance and increasing liquidity can help reduce volatility and make these systems more accessible to a wider audience.
Several projects exemplify the principles of regenerative finance. Ethic Hub focuses on peer-to-peer crowd lending to support farmers in agriculture, helping the majority and ensuring profitability. Impact Market aims to create a universal basic income and poverty alleviation mechanisms, making a significant impact on poverty-stricken communities. Plastics Marketplace tackles plastic waste by utilizing NFTs to incentivize plastic recovery. Lastly, Good Ghosting promotes personal finance habits through gamification and DeFi, making financial tools accessible to everyday people.
By embracing regenerative finance, we can uphold the original mission of cryptocurrency and avoid recreating the flaws of the current financial system in a more volatile manner. The tutorial encourages collaboration and highlights the important work being done by many individuals in the crypto and Web3 space. Together, we can build sustainable and inclusive financial systems that benefit everyone.