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title: A Flywheel of Regenerative Development

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# A Flywheel of Regenerative Development 

A river is born from the collective contribution of countless raindrops.

> Coordinated, comparable, and transparent reporting and verfication of actions by all actors is essential to clarify effects and possible overlaps. This would also help in gaining recognition of ambitious action, and facilitate replication. 
> ― UN Environment's Emissions Gap Report 2017

Imagine an ecosystem where regenerative activities are rewarded and impact evaluations measure their effects for positive change. A flywheel effect of funding, impact, and trust ― driven by transparency and accountability. Anyone who wants to work on activities that generate positive impact can be funded to do so.

### Background
The inspiration and scope of this research has been the World Food Programme's work for the UN Sustainability goals: *Zero Hunger* and *Partnerships toward the goals*.
[[WFP SDG]](https://www.wfp.org/sdgs)

The idea is simple and has successfully been used in blockchain networks to encourge participation and to reward projects that create impact.

#### Innovative funding mechanisms
For example, Optimism's RetroFunding Round 3 distributed over $100m in early 2024 to projects in their ecosystem. They did this by appointing a committee of people familiar with the ecosystem. This group of individuals voted for the projects they found  having the most impact and the $100m fund was distributed to the projects based on these votes. [[OP Economics]](https://community.optimism.io/docs/governance/economics/)

Before this, Gitcoin has been pioneering distributing grants directly to projects, also via blockchain technology [[About Gitcoin]](https://www.gitcoin.co/about).

One key innovation in blockchains is their transparency and verifiability. It's an open and immutable ledger where anyone can see the transactions in the network. They are secured by a network of computers with a mechanism to reach consensus in ways that have been agreed on beforehand. 

Proof of Work in Bitcoin was the original one. It's often criticized for being resource intensive. Todays blockchains are thousands of times more efficient by using Proof of Stake and additional layers add scalability and faster transaction speeds [[Etherem PoS]](https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/).


### Global Challenges
So how does this technology help us towards zero hunger and partnerships towards the goals?


Let's first talk about some of the challenges we face:

- **Climate, conflict, and hunger** are linked. By stabilizing the climate and providing access to food,  conflict is mitigated.
- **More efficient capital allocation** is needed to support food systems. Organizations and individuals need to trust their funds reach those who create verifiable impact. The time this takes also matters.
- **Better collaboration and coordination** needed to increase efficiencies and alignment on direction. What gets funded - why, how, by whom, and when? Time is a crucial aspect here.


### Impact Generators
- **Healing the environment** stabilizes climate, reduces conflict, and enables more food to be created. Projects such as the Great Green Wall and Sahel Resilience Scale-up regenerate deserts into fields and farm lands in just a couple of years. There are numerous projects like this around the world with great impact.
- **Funding smallholder farmers** and home-grown school feeding programs increase availability food and nutrition while strengthening communities. Just these two stakeholders are already creating huge impact and could do even more so with proper funding and improved management of post-harvest losses.
- **Innovation** boosts the effects of the ecosystem. Better technologies yield more and better output for less energy.
- **Food distribution** via trucks can use post-harvests or food from school kitchens to reach remote and under-served areas.
- **Education** includes more people to participate by learning for example farming, land regeneration, and nutrition.


To summarize:
- Regenerating lands stabilizes climate and enable more food to be farmed.
- Farmers and home-grown kitchens have high impact for work towards zero hunger and are in big need for funding.
- Blockchains enable efficient, transparent, and verifiable capital allocation and impact evaluations.


### Funding from Trust & Accountability
What if an individual, team or community who wants to work with regenerative activities can receive enough funding to do that for a living? Evaluating the impact created creates a proof that funds are spent were they are needed. When this is transparent for anyone to verify it creates trust in the ecosystem. 

Proof of Funding and Proof of Impact.

This trust encourages more funding for more projects who create more impact.

<div style="display:flex;justify-content:center;">
  <img src="https://hackmd.io/_uploads/HkCe_26E0.png" width="300" />
</div>

*Figure 1: The flywheel effect in regenerative development, illustrating the cycle of funding, impact, and trust.*

### Transparency & Verifiability

Transparency and verifiability acts as drivers to funding and impact generation.

Companies have a will to contribute to sustainability but there are few options today. Carbon finance can lead to green hushing where companies abstain from allocating resources because of potential backlash from the public.

What if their contributions could be verifiably proven to have a regenerative impact? 

This method can encourage people and communities to transform deserts into fields and farm lands. Smallholder farmers to grow nutritious food. Home-grown kitchens that source local produce to feed millions of people in need. Truck drivers to deliver food to remote and under-served areas.

Moreover, it can incentive innovations that might have potential for great positive change but without a viable business model. 

It can even encourage beach and river clean-ups and revitalizing our cities.

For-impact instead of for-profit.


### Categories of Stakeholders


So we have the regenerative projects and we have the funders. But we need one more category of stakeholders to really make this work.

The coordinators. These are the NGOs, the regional governments, the local communities. They are the mycelium, the connective tissue, the communications network. They have the insights about what needs funding, magnitude of the impact, and are there to support projects and evaluate impact. 


![image](https://hackmd.io/_uploads/HyXdn26NC.png)

*Figure 2: Illustrates the interconnected roles of regenerative projects, coordinators, and funders in fostering trust, accountability, and sustainability for impactful and collaborative outcomes.*



### Funding Platform
What does this look like in practice?

A pool of funds is allocated from those who wants to participate in funding projects. A smart contract can be written that can receive tokens, for example the stablecoin USDC.

We also need projects. Anyone can fill out a form from their mobile device with details about name of the project, its funding needs, and what impact it already does or seek to do. The projects goes through a KYC process before approval.

These projects can be viewed by anyone on the online platform. 


Next there is a mechanism to decide how to distribute the funds to the projects. 

Some alternatives that exist today are:
- **Direct grants** - the project specify their funding needs, and if approved, the funds are directly transferred, sometimes with milestones that must be reached.
- **Voting** - people can vote for the projects they deem to have the biggest impact. It can be a select group or open to the public. The algorithm for calculating the weight of each vote can also vary. Quadratic Voting is a method similar to ranked choice voting were voice credits are spent. Voting can also be done to reward impact retroactively - how much impact did the project have since last time it registered for new funding?
- **Impact metrics** - evaluations of impact are the basis for the distribution. Combinations of digital attestations, evaluation data, satellite imagery and AI to make sense of the data can be used. 

Different strategies might be useful in different scenarios.

#### Claiming funding
Once this phase has been completed, the projects can claim their funding. This usually happens in one of two ways:
- **Push** funding by sending it directly to the account provided during registration
- **Pull** funding from a website by providing a proof

The funded token, for example USDC, will be transferred to the project owner(s) account(s). This digital wallet has many benefits. Mobile payments among people and businesses are as simple as scanning a QR cde. 

The projects are accountable to use these funds in ways that generate the impact they seek to do. If they do, trust increases and more future funding can be relied on. This can create financial reliability over long periods of time.




<div style="display:flex;justify-content:center;">
  <img src="https://hackmd.io/_uploads/rkUaPhTEC.png" width="300" />
</div>

*Figure 3: A visual representation of the cyclical process of funding, from project application to impact evaluation, highlighting continuous rounds of financial support.*


### Pools of Funds
Introducing money from funding into the communities strengthens the economies and create resilience and self-sustainability.

The companies, organizations and individuals can undisputedly show what regenerative impact their funding helped to create. Brand awareness and public opinion grow from choosing to participate in making a difference and show up for it.


These pools of funds can be of different categories that define eligibility of projects. Some examples:
- Soil regeneration initiatives 
- Smallholder farmers fund
- Home-grown school feeding programs
- Community gardens 
- Innovation projects 
- Emergency relief
- Restore our oceans 

They can also be based on region, size of project, or anything the imagination can conceive.


This method of funding can also work in more reactive situations. If a crisis happens, a pool can be created and funded within minutes. 

Flow of money is only limited by the speed of the decisions guiding their destination.



[![image](https://hackmd.io/_uploads/HkvhRn6VR.png)](https://miro.com/app/board/uXjVKKHduAY=/?moveToWidget=3458764591296008998&cot=14)

*Figure 4: Visual representation of the user flows. [Miro Board](https://miro.com/app/board/uXjVKKHduAY=/?moveToWidget=3458764591296008998&cot=14)*  



### Implementation Plan



So what's the plan? How does this flywheel effect start?


#### Short-term Strategy
A small experiment can be conducted. In a limited scope, with low friction, high impact potential, and short impact cycle.

**Guidelines for finding a scope:**
- Projects interested to participate that are believed to have an impact if funded.
- A region with access to digital infrastructure such as mobile phones and internet connection
- A group of people to evaluate the impact created
- Funds to pool together and distribute to the projects

Home-grown school feeding programs could be a good choice because:
> They generate high returns in four critical areas: increasing human capital; providing safety nets for poor children and their families; enhancing local economies, especially the earning power of women; and supporting peace-building, community resilience and preventing future conflict.
> 
> ― [Feeding a Nation’s Future: The Transformative Power of School Feeding Programs](https://www.wfpusa.org/articles/feeding-a-nations-future-the-transformative-power-of-school-feeding-programs)

The duration of the experiment must include:
- Time for project registration and approvals
- Time to see and evaluate impact
- Time to pool funds and decide on how to distribute

1 month might be a good place to start.

#### Mid-term Strategy

Once validated, it can grow in scope:
- Include more funders (companies, NGOs) and perhaps even individuals
- Include more pools of funds with higher amounts
- Include more types of projects
- Include more and larger regions

It can also add additional features such as:
- Ingest evaluation data from external systems 
- More detailed project pages with updates and photos to create a social aspect with an emotional connection 
- Governance with voting to coordinate decide on priorities. Proposals can be created and voted for.
- Certifications for funders based on certain metrics in their funding such as the impact they create
- Impact token that's minted to the project when impact has been evaluated and confirmed.


#### Long-tem Strategy

What projects and initiatives would you like to see your community work for?



What if McDonalds and CocaCola participate to fund nutritious meals as a way to counteract their detrimental effect to people's health?

What if Nestle provide funding for water where people are in dire need?

What if coal and oil companies with high carbon emissions fund activities that regenerate deserts into living lands?

What if we can provide better opportunities for companies to take responsibility for their impact on the world?


### Barefoot Doctors & Decentralized Healthcare
In China in the 60s and 70s, the goverment created rural cooperative medical systems to provide basic medical training to farmers, healers, and school graduates. Their purpose was to bring healthcare to rural areas where urban-trained doctors would not settle. They were called the barefoot doctors.

The program had big impact on public health as well as reducing healthcare costs. Life expectancy increased from 35 to 68 years. Infant mortality dropped from 20% to 3.4%.

The income of the barefoot doctors was calculated as if it were agricultural work. They were paid roughly half of what a trained doctor made.

Barefoot doctors were primarily compensated by the villages in which they worked. This funding came from collective welfare funds as well as from local farmer contributions.

The initial pool of barefoot doctors required no education or training as they were sourced from healthcare providers already working in rural areas as well as urban doctors.

Barefoot doctors acted as a primary healthcare provider at the grass-roots level. An important feature of the barefoot doctor was that they were still involved in farm work. They often spent as much as 50 percent of their time on farming.


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(work in progress)

### Risk Analysis & Mitigation
- Blockchains are relatively new tech with new concepts to learn 
  - It must be easy for funders to create and fund pools. Even better if it can be done automatically as streams or monthly donations.
  - Projects must be able to register their projects with little knowledge of Web3. Sign-in via e-mail and sponsored transactions are some ways to reduce friction.
  - Recipients of funds must be able to actually use the funds they receive.
- Blockchains have a reputation of speculative finance in the mainstream
  - Inform about the aspects of transparency and verifiability of transactions and attestations
  - How to effectively show true value of blockchain tech?
- Getting quality impact evaluation data 
  - Who can evaluate, what is being evaluated, how are evaluations being submitted, and why can they be trusted?
  - Oracles for pulling in existing evaluation data
- Are there any risks to these new incentives? what behavior do they encourage?
  - Goldhart's Law


### Resources:

Great Green Wall:
https://www.youtube.com/watch?v=WCli0gyNwL0

Home-grown School Feeding programs:
https://www.wfpusa.org/articles/feeding-a-nations-future-the-transformative-power-of-school-feeding-programs/

Blockchain for Social Impact and NGOs:
https://consensys.io/blockchain-use-cases/social-impact