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Decentralized finance (defi) has transcended its digital confines. With its burgeoning role in areas ranging from home purchases to climate change combat, defi is visibly transforming our tangible reality.

It’s not surprising that some may express doubts due to past over-exaggerations surrounding defi. However, a mere glance reveals defi’s tangible benefits in real life.

There’s ample evidence suggesting that its influence will burgeon even further. As pioneers keep integrating decentralized finance for the public’s benefit, a foundation for future innovations is being established.

Real Estate

Cryptocurrency tokens now pave the way for individuals to invest in real estate by buying fractional shares of properties or properties under development. This democratizes real estate investment, welcoming a broader spectrum of participants.

Enterprises like RealT, Propy, and Homebase are delving into effective real estate tokenization methods to cater to a more extensive audience. The trend is catching fire.

RWA, a firm specializing in tokenized real-world asset analytics, reports active real estate loans valued at $31 million – pointing to a burgeoning market for tokenization. RealT’s inception in 2019 was rooted in the vision of making real estate investments as accessible as $50. Fast forward three and a half years, and over 390 properties with a combined worth exceeding $92 million have been tokenized. Propy, meanwhile, has successfully facilitated transactions worth more than $4 billion within the U.S.

Further transformations in real estate are on the horizon, such as the potential obviation of lawyers in property deals, thus democratizing the market even further.

Climate Action

Defi is emerging as a tool to combat climate change, enabling a level of accountability for major carbon emitters previously thought unachievable. Given the challenges of monitoring carbon reductions, the infallibility of blockchain guarantees transparent tracking. Smart contracts can also serve to regulate oversight mechanisms, establishing a reward and penalty system.

The nascent green defi sector trades carbon tokens as evidence of emissions cuts and even employs them as collateral for significant transactions. While protocols tailored for climate change-centric applications are under development, some pilot schemes and demonstrations have emerged.

In 2022, digital voluntary carbon markets started trading tokenized carbon credits via the blockchain. These credits were leveraged as collateral for loans. With escalating demand, it became evident that blockchain-based carbon credit tokenization could exponentially improve the transparency of carbon governance.

Entities like Toucan Protocol underpin projects that tokenize carbon credits via blockchain technology. As per Toucan, they have tokenized in excess of 20 million carbon credits, influencing over 50 environmental initiatives. Another notable venture is KlimaDAO, a decentralized autonomous organization (DAO) and defi protocol founded in October 2021. It provides a tool that allows users “the option to selectively filter, choose and retire carbon credits from over 20 million tons of available digital carbon credits.”

Financing in Developing Regions

Defi opens the door for people in financially underserved areas to tap into resources without traditional banks’ dependency. While this promise has echoed in the crypto realm for years, it’s now coming to fruition.

Defi paves the way for alternative financing strategies for endeavors that might not captivate traditional banks. The lack of capital shouldn’t stifle groundbreaking business concepts.

An evolving ecosystem is ensuring that individuals in developing economies can ride the defi wave. For example, Goldfinch allows global investors to infuse cryptocurrency funds into projects. They utilize facility agreements to bridge on-chain and off-chain operations.


Gone are the days when insurance claims relied on human adjusters, leading to protracted and expensive processes. Defi introduces automation to the scenario, where specific pre-set conditions trigger smart contract-based payouts.

This process prioritizes consumers, with their claim settlements being dictated by a non-negotiable contract rather than an individual’s decision, eliminating the need for intermediate negotiations.

Ethrisc, partnering with the Lemonade Crypto Climate Coalition, exemplified this in late 2022 by offering Kenyan farmers parametric crop protection against environmental adversities. Farmers simply registered via their phones, with premiums costing less than a dollar. Payouts, based on regional yield data, were promptly transferred to their M-Pesa accounts, a stark contrast to conventional insurance claims.

Challenges Ahead

Potential roadblocks like regulatory challenges, especially from the SEC, could impede defi’s integration. With the SEC yet to provide a clear path and its recent lawsuit against Coinbase, the waters may become even murkier.

Additionally, potential bugs in smart contracts could pose concerns. Presently, there’s a lack of comprehensive legal structures to ascertain responsibility and jurisdiction.

In light of the rapid innovations, it’s imperative to find solutions. Defi’s transformative capabilities are evident. As it progresses, regulators must stay abreast to unleash its full potential.