You’ve heard of DeFi, TradFi, and even SoFi; now get ready for ReFi. That’s not short for refinancing but regenerative finance, and it has the chance to change how worthwhile causes raise funds from the corporate sector.
The concept is being developed by Borderless Money, a new company with the vision of an open, borderless digital society where goods, services, technology, information, opportunities, and capital can flow through the borders from one hand to many with high degrees of transparency. Borderless Money uses yield-generating strategies to contribute to social causes.
How Borderless Money works
Co-founder Leandro Pereira said the idea is to use coins and tokens sitting dormant in wallets to generate returns at a low risk to the principal capital. Some or all of those returns can be allocated to social causes registered on the platform. It’s similar to crowdfunding in some aspects, but the categories are based on the United Nations Sustainable Development Goals. They target hunger, poverty, health, education, and gender equality.
Once an SDG-based cause is chosen, the yield is distributed to all groups within the category. Anyone can submit a cause. Future versions will allow the community to vote on them.
“Little by little, we want to give away our control… to the community,” Pereira said. “If you go to the Borderless platform and post a cause, you need to move your community to vote (for it).”
Pereira said blockchain technology makes this possible by providing transparency. Everyone can see the transactions and where the money flows. Smart contracts on the Polygon blockchain dictate deposit flows.
“We created a better flow of capital with this,” Pereira said.
Regenerative finance explained
Regenerative finance allows investors to easily dictate which funds can be invested in select causes. Those funds are sitting idle in the investor’s accounts.
“We are a mechanism to create extra channels, extra capital flows,” Pereira said. “We are regenerating the flow and creating a constant flow of money that you don’t get from anywhere else. So I can get a big fund to preserve the Amazon, and instead of giving bits and bytes, they can put a big chunk of this capital in our protocol. The yield will supply capital for you and the cause.
“That’s a nice way of fulfilling this demand.”
CEO Robert Littlejohn built his career in researching yield-generating markets. He said the concept of institutional funds and clients placing funds with Borderless Money makes sense. The returns exceed the cost of capital while allowing companies to assist groups addressing the UN’s SDGs.
“We believe deeply in the technological efficiencies behind blockchain,” Littlejohn said. Our platform provides all the accounting behind everything open on the blockchain explorer. We believe this couldn’t be done in the traditional world due to the lack of transparency and the high costs of financial transactions.”
Littlejohn said regenerative finance brings new functionality to money. The novel solution can facilitate above-average returns while allowing participants to help causes they like. He said larger entities like corporations would be most attracted to the concept. Attract that capital, and the causes will come.
Borderless Money’s vision
As Borderless Money grows, the founders envision more options and tolerance levels for investors. They will soon be able to quickly determine which percentage of holdings goes to causes and which portion to their returns. The $BoM token is in presale. The revenue from the tokens, which will provide governance access, will grow the early capital pool.
Pereira reiterated that the plan is to give Borderless Money away to the community. Whether that is in a DAO-like format still needs to be fleshed out, and the market needs to grow. And grow it will. McKinsey predicts the metaverse will be a $5 trillion market by 2030.
“We can also adapt to traditional finance, and we can be plugged in in CBDCs, CeFi, DeFi, staking,” Pereira said. “This model can run in multiple places, and we can be just the catalyst to distribute. We don’t want to be the cash retainer; we want to be the catalyst.”