Exploring ReFi: Among the intersection of finance, energy and DePIN, what projects are worth paying attention to?

“To be or not to be, that’s a question”。

This famous line from “Hamlet”, if converted into an encrypted version, would probably be: To buy or not to buy, that is the question.

One of the daily routines of Web3 players is to repeatedly jump between hot narratives.

When faced with a project, people often think about whether it is a hot narrative before deciding whether to get involved; when faced with multiple projects, they repeatedly switch projects based on the rise and fall of the popularity of different narratives.

What other popular narratives are currently on the market?

In addition to the Bitcoin ETF incident, DePIN is in the ascendant, new L1s are advancing hand in hand, and RWA has also been included in the institutional outlook list many times… After all, there are many narratives, and the funds in the pockets are always stretched thin.

Therefore, the best situation is to hits multiple narratives above at the same time in one project, at least it feels like it greatly increases the probability of success —- long bets, but only one part of money is invested; in addition, if the project can also produce some positive social value, it will add a bit of legitimacy.

So what are the projects that meet the above conditions?

Outside of the recent market focus, there is a track that meets the criteria but is rarely mentioned, and that is ReFi.

Note that the prefix “Re” does not refer to “re-staking finance,” but rather “renewable finance,” a track that combines the crypto world with energy, environmental protection, and physical equipment.

For example, Rowan, a representative project in the ReFi track, has seen its token increase by an astonishing 200 times in the past year, but many readers may not have heard of this name.

So, what is the magic of ReFi, and what other projects are worthy of attention?

ReFi: Stepping into multiple narratives and aiming at environmental protection

ReFi is not a new narrative, if you search for last year’s cryptocurrency articles with the keyword ReFi, you will find a lot of introductions and research.

But for Web3, the popularity of cryptocurrency narratives and projects is often related to a larger capital market background.

According to Bloomberg New Energy Finance data from August last year, global renewable energy investment in the first half of 2023 surged to $358 billion, a 22% increase from the beginning of the year, reaching a six-month historical high.

During the same period, related capital markets also experienced rapid growth. Venture capital and private equity expansion commitments to renewable energy companies reached $10.4 billion, up 25% from the first half of 2022.

Everyone is beginning to pay attention to environmental protection and sustainable development, and the Web3 field, which is good at integrating real-world hot spots, naturally has signs of development.

A general ReFi approach is to use the transparent mechanism of blockchain technology to introduce natural assets onto the chain, and introduce an incentive mechanism to reward those behaviors that contribute to green development, thereby promoting sustainable development.

Specific to different parts, the current ReFi can rely on the following components to function:

• Decentralized ledger/L1 : Promote distributed consensus, write behaviors/facts that contribute to the environment into the public chain, make environmental protection behaviors visible and traceable, and provide a basis for supervision and rewards;
• NFT：Provides a container for data on regeneration projects, tracking social, environmental and economic data for specific bioregions;
• Tokens and Contracts: Natural capital, production/manufacturing capital, social capital, human capital and other environmentally beneficial capital can be tokenized and then traded or regulated through contracts. A concrete example could be the tokenization of carbon emissions credits for a certain region.
• DAO: Developing new organizational forms to govern the environment and renewable resources may take into account previously marginalized stakeholders (such as environmental organizations).

A Gitcoin blog post last year divided the Refi track into multiple sectors such as community, economic/technical platform, credit score and financing tools. But this kind of distribution still seems too macroscopic. We might as well think about it in specific aspects:

First, collecting beneficial environmental data in a certain location requires physical equipment, which more or less involves the concept of DePIN. Additionally, managing natural capital in the real world through transactions or incentives has a hint of RWA. At the same time, recording data related to environmental protection and renewable resources may require a dedicated chain, which is also connected to L1 and infrastructure…

By stepping on multiple narratives and focusing on environmental protection, ReFi can establish connections with different existing tracks. More importantly, it at least conceptually provides a legitimacy that purely financially oriented cryptocurrency projects cannot achieve - moving from the virtual to the real.

By connecting with multiple narratives and having positive social value, it creates a batch of projects worth attention.

Dione Protocol ($DIONE): Open up power suppliers, L1 and market dedicated to new energy transactions

Dione Protocol’s goal is to provide a solution that reduces barriers to entry in the renewable energy industry and enables consumers to build their “green energy” businesses.

To provide this feasibility, the project has developed a blockchain-based platform that will incentivize everyone in the system to use green energy and make the energy production process and associated supply chain accessible to end users, utilities, investors and Regulators are more efficient and transparent.

In terms of specific architecture, Dione is an L1 based on the PoS mechanism, compatible with EVM, and aims to realize the trade of renewable energy. Its core architecture is based on Avalanche, which also allows Dione to have more than 5,000 TPS, support expansion of more nodes, and store private data under strict access control to ensure data privacy and security.

Based on the above architecture, the project built an energy trading market called Nebra.

Nebra connects energy producers and consumers on a peer-to-peer (P2P) basis. This allows producers to bypass the traditional energy grid and sell excess energy directly to consumers. This can lead to significant savings for both producers and consumers.

When an energy provider generates and releases a unit of energy to be consumed, the transaction will occur through Nebra, however, the actual movement of the unit from the provider to the consumer device will occur through the grid.

At the same time, users can also install solar panels (which Dione helps grid operators sell) to receive clean energy from the supplier.

In addition, an interesting point is the design of the verification node of the Dione blockchain. The node is linked by the Starklink (Starlink) satellite provided by Musk’s SpaceX company and uses solar energy to generate electricity, allowing it to operate wirelessly in remote and hard-to-reach locations. It operates seamlessly and is truly an “environmentally friendly” and “decentralized” blockchain in a physical sense.

And Dione’s own blockchain is called Odyssey, currently in the testnet phase, but will officially migrate to the mainnet around January 15th.

However, as a project that has been in existence for 2 years, the progress of the mainnet launch is not considered fast. We can continue to observe the operational performance and market response after the mainnet goes live.

Although its own L1 mainnet is not online, Dione’s native token DIONE has been deployed on Ethereum before and will be migrated to the mainnet later. This also affects the economy of the DIONE token.

From the Tokenomics White Paper (Check here to find out) It can be seen that the total amount of DIONE will be increased after the main network goes online, from the original 10000M to 124000M, but at the same time the advantage is that the purchase and sale of DIONE tokens will no longer be taxed.

I speculate that before and after the mainnet goes online on the 15th, the token price may fluctuate due to changes in supply. However, this fluctuation is not directly due to an increase in supply (there is a linear release mechanism), but may be the market taking the opportunity to speculate.

In addition, users can stake DIONE tokens to ensure network security, with a staking return of 1% every 30 days and a maximum of 8% during the entire staking period.

In terms of secondary market prices, the price of DIONE has doubled in the past month; and if stretched to one year, the token price has even increased 200 times. But in contrast, the current total market value of tokens is only 36 million. As the mainnet goes online and more people pay attention to environmental protection, DIONE may also usher in a round of hype.

Rowan Energy ($RWN): Solar mining for homes, both environmentally friendly and economical

If Dione is thinking of solutions on the energy supply side, then Rowan is more focused on the consumer side.

Rowan Energy is a new energy company that also has its own L1.

Rowan Energy uses blockchain technology to track the production of residential rooftop solar power. This technology can provide accurate tracking and data verification and solve problems existing in the traditional energy market, such as untraceable power and opaque transactions.

At the same time, the project adopts a consensus mechanism called “Proof of Generation”. This mechanism allows users connected to the network to participate in the maintenance of the blockchain by providing their solar power generation. This is different from the traditional Proof of Work mechanism, which is more environmentally friendly and consumes less energy.

L1 records data and also requires hardware to generate/transmit data.

The hardware solution they offer is called SmartMiner, a device that combines smart meters and blockchain cryptocurrency mining.

Taken together, this is more like a DEPIN that uses solar physical hardware to mine, but the goal is also the utilization of renewable energy and environmental protection.

From the appearance, SmartMiner is a box of the same size as a regular smart meter. It will be installed on the user’s solar panel board and connected to the home’s Wi-Fi. SmartMiner generates encrypted currency rewards while calculating power consumption. According to its official documentation, Rowan Energy will pay $RWN worth 10 pence for every kilowatt-hour of solar energy generated. These rewards can be converted to cash via PayPal or sent to a Rowan wallet compatible with the user’s mobile phone.

Every time a SmartMiner is sold, or fees are incurred on its L1, Rowan Energy will buy back a certain percentage of $RWN to encourage users to use clean energy (solar energy) in the long term by supporting the token value.

In terms of the specific design of the token, the total amount of RWN is 545M, of which VC and private equity rounds account for 150M. But it is worth noting that the project stipulates RWN tokens for VC rounds can only be redeemed via OTC, and will never be bought or sold on an exchange.

Currently, the total circulating amount of RWN is 195M, and the remaining 180M is used for DePIN mining output.

In terms of market price, RWN has increased by 200% in the past month, and has also increased by an astonishing 20 times in a year. Its market value of 33 million is also equivalent to the aforementioned DIONE.

Solareum ($SRM): “Green L1” where new energy providers act as verification nodes

SolareumChain uses blockchain technology to incentivize people to use green energy in the form of tokens to combat the energy crisis. This L1 adopts two innovative consensus mechanisms: Proof of Generation (PoG) and Proof of Holding (PoH).

Among them, PoG, or proof of new energy production, is the core of SolareumChain. Unlike BTC’s verification method, which consumes a lot of electricity and computing power, in Solareum, ‘miners’ are rewarded not for consuming electricity, but for producing it in a renewable manner.

SolareumChain opens the door for renewable energy producers, including solar farms, wind farms, tidal farms, geothermal installations, and even individual rooftop solar panels, to participate as validators. These producers can still produce new energy, but they can also enhance the security of Solareum L1.

PoG technology ensures that the renewable energy generated is verified and confirmed to be of legal origin. It also prevents any single entity or group from having too much control, resulting in a truly decentralized solution. This approach not only makes SolareumChain more environmentally friendly, but also more secure.

PoH, on the other hand, is designed to reward those who hold Solareum tokens ($SRM) and meet certain criteria. This unique mechanism makes it easy for anyone to become a validator, thereby contributing to the security and integrity of the network.

The more SRM you hold, the more you earn and the opportunity to participate in energy generation and become an integral part of the SolareumChain ecosystem. SRM is also the currency used to buy energy from each other on Solareum’s open energy market. And, because the market is set up on the blockchain, every transaction and verification process is publicly verifiable, ensuring the integrity of the network.

However, at present, SolareumChain is still in the testnet stage.

According to the information released by the official website, the test network has been set up and running, and transactions are being processed. They also collaborated to connect two Tesla Powerwalls to the testnet, which are connected to important solar installations.

Solareum plans to officially announce the developer program soon, inviting developers to build decentralized applications (dApps) on the testnet to prepare for the launch of the mainnet. The official launch date will be announced shortly.

In terms of token performance, SRM has only seen a modest increase of around 35% in the past month, and over the course of a year, the price has not experienced any significant fluctuations. Additionally, the token’s market capitalization is less than $1.5 million, even smaller than the market capitalization of some well-known “shitcoins”.

However, based on the project’s official documentation, Twitter following, and other information, SRM does not provide as much detailed information as the aforementioned projects. The documentation focuses more on describing values and mathematical formulas, with less emphasis on substantial progress. This highlights the token’s characteristic of having both high risks and high potential.

There are no more details. On the one hand, it can be understood that the project has not yet been fully developed and needs to be revitalized. On the other hand, it can also be interpreted that the project itself is nothing more than that. How it will perform in the future remains to be seen.

Arkreen Network ($AKRE): Energy data network with zero energy consumption and carbon emission reduction

The name Arkreen is a combination of Ark and (g)reen, meaning to gather green energy data and carry the ark of the future.

Arkreen Network is a Web3-based carbon reduction infrastructure for globally distributed renewable energy resources that enables the connection and monetization of carbon reduction applications.

Specifically, it connects energy production and demand.

Suppliers use Arkreen Network to declare the amount of renewable energy they produce, store, or consume. The network rewards the contributions of participating suppliers. The owners of solar photovoltaic equipment and households that practice on-demand energy conservation are the suppliers.

Buyers use Arkreen Network to access electricity data and build applications and services based on that data (such as REC renewable energy certificate issuance and VPP virtual power plants).

For example, you can check on the project’s blockchain to see how much generation capacity has been used by a clean energy generator and simultaneously issue a certificate, as shown in the image below, to acknowledge their contribution.

To achieve the above functions, Arkreen Network needs to be built on IoT (Internet of Things), AI (artificial intelligence), blockchain (distributed ledger technology) and token economy. By digitizing the parameters and status of energy facilities, it is possible to create twin environments in the digital world that mirror the physical facilities.

Ultimately, what the project wants to achieve is:

• Generators produce more renewable electricity to reduce overall demand for fossil electricity.
• The storage side absorbs energy when power generation is sufficient and delivers it to consumers or the grid when power is scarce, thereby reducing energy waste and improving usage efficiency.
• Consumers reduce their total consumption.
• Consumers shift part of their power plans from times of energy shortage to times of energy abundance.

Currently Arkreen supports the following forms of “miners” to participate in AKRE mining, and also acts as a renewable energy power generator:

• Remote Miner: Miners run remotely without the need to install their own energy equipment (such as solar photovoltaic panels) and data collectors locally. For users who are unable to purchase or install energy equipment, Remote Miner provides an easy way to enter the Arkreen ecosystem. experience. Every time a Remote Miner is purchased, a Remote Miner NFT is minted.
• Standard Miner: This type requires users to purchase related detection hardware and data collectors. Although it is more troublesome and costly than Remote Miner, the owner can get more benefits.
• API Miner: API Miner rewards are based on data from the third platform. For example, users connect existing energy facilities to the energy platform for management. Qualified third-party platforms can provide data on energy facilities to Arkreen Network, and Arkreen will provide rewards based on this data. Each API Miner will receive an API Miner NFT after confirming that the data is valid.

In addition to energy generation that can participate in mining, Arkreen also introduces an energy consumption product - Smart Plug. Smart Plug can calculate the energy consumed by appliances and schedule power supply remotely. Users can use Smart Plug to power their appliances (such as air conditioners) and participate in green actions. At the same time, each Smart Plug will mint a corresponding NFT.

In terms of tokens, AKRE can be distributed as rewards to contributors who help build and maintain the Arkreen network, and can be used to pay Arkreen network transaction fees and to pay external entities that use the green energy data services provided by the Arkreen network.

The maximum supply of AKRE is 10,000,000,000 (10 billion). All AKRE in the Arkreen network will be distributed to stakeholders in batches according to the network construction progress, 30% of which will be used for mining, and the rest will be distributed among roles such as teams, consultants, investors, and ecosystems, but there will be certain locks. warehouse and linear release terms.

I did not find any clues in the public data that AKRE token has undergone TGE (Token Generation Event), suggesting that the project is still in the Build phase. Unlike the previous projects mentioned, Arkreen focuses more on the data and credential field related to energy. Further updates from the official introduction of the token are needed to closely monitor its additional functions.

Conclusion

Looking at the aforementioned projects and the overall track introduction, we can find the following characteristics:

1. Projects span multiple narratives, such as L1/DePIN or even RWA

2. The market value of the projects is relatively low.

3. Participating in the business of the project requires a certain threshold, such as having solar power panels, purchasing small equipment, or needing to open up the entire new energy industry chain.

The third point may also precisely constrain the current scale of the project. Due to the involvement of traditional interest chains and multiple stakeholders in clean energy generation, national policies and the intertwined interests within them, blockchain and IoT technologies can solve certain efficiency problems. However, at this stage, they are unable to completely disrupt the operational model of the traditional energy industry.

However, at the same time, these projects are all challenging. Transforming equipment, convincing residents, and attracting energy suppliers all require not only technical expertise but also extensive social connections and resource investment. Furthermore, these are long-term investments with slow results.

But on the other hand, because it is challenging, it can better reflect social value - this may also be the fundamental aspect that makes ReFi stories worth paying attention to.

However, in the vibrant and even frenzied cryptocurrency market, there is a big question mark on whether funds and attention have the patience to wait for these “legitimate” projects to materialize. But at the intersection of multiple overlapping narratives, choosing to trade low-market-value projects may also be a good choice for positioning around hotspots.

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