Incubation Branch
Synergy and Oversight Amongst Regenerative Finance Start Ups
Last updated
Synergy and Oversight Amongst Regenerative Finance Start Ups
Last updated
Within this structure, three distinct branches play pivotal roles: the Executive Branch, the Investing Branch, and the Incubation Branch. Each has unique responsibilities and functions, but together, they form a comprehensive system of checks and balances that ensures the ecosystem's integrity and alignment with its core mission. This section delves into the Incubation Branch, also known as the REFI DAOs, which plays a crucial role in nurturing the future of Regenerative Finance startups.
The Incubation Branch: Catalyzing Regenerative Finance
The Incubation Branch, embodied by the REFI DAOs, is designed to foster the development of new entities within the realm of Regenerative Finance. With a structure comprising five distinct DAOs, this branch focuses on incubating startups with significant growth potential and guiding them towards sustainable business models.
A key initiative of the Incubation Branch is to finance the acquisition of Sustainability Designations for businesses through the Green Cross ecosystem. By donating $20,000 to support the operations of the Green Cross, these DAOs not only contribute to environmental stewardship but also enable businesses striving for NETZERO or Carbon Neutrality to embrace Regenerative Finance. This support is instrumental in helping these companies integrate sustainability into their core operations and gain recognition for their efforts.
To fund these initiatives, each DAO within the Incubation Branch will sell NFT Memberships, with the collective goal of raising 5 million XDC across all groups. The structure of membership and fundraising is tiered to ensure diverse participation:
Group 1: Raises 5m XDC with only 10 Memberships.
Group 2: Raises 5m XDC with 25 Memberships.
Group 3: Raises 5m XDC with 50 Memberships.
Group 4: Raises 5m XDC with 100 Memberships.
Group 5: Raises 5m XDC with 250 Memberships.
This tiered approach results in a total of 435 members within the Incubation Branch, creating a robust community dedicated to supporting the evolution of Regenerative Finance startups.
Checks and Balances: Inter-branch Collaboration and Oversight
The governance structure of Circularity Finance ensures a balanced ecosystem where each branch plays a critical role while maintaining accountability to the others:
The Executive Branch oversees the ecosystem's monetary policies and operational stability, including the management of the CIFI Borrow protocol and ensuring the ecosystem’s liquidity.
The Investing Branch focuses on strategic investments in Real World Assets (RWAs) and startups that align with the ecosystem's sustainability goals. This branch collaborates closely with the Incubation Branch to identify and support promising startups.
The Incubation Branch is directly involved in nurturing startups and ensuring they have the resources and guidance needed to succeed. By providing startups with a path to sustainability and financial autonomy, this branch contributes to the ecosystem’s innovation and growth.
Through this structured yet flexible governance model, Circularity Finance ensures that the ecosystem remains adaptive, resilient, and focused on its long-term vision of promoting Regenerative Finance. The synergy between the branches, coupled with a clear system of checks and balances, allows Circularity Finance to continuously evolve, responding to the needs of its community and the wider world. To join each REFI DAO and contribute to the collective goal of fostering economic growth through sustainable investments, the cost for membership is as follows:
Fund 1 (10 memberships): 500,000 XDC per membership
Fund 2 (25 memberships): 200,000 XDC per membership
Fund 3 (50 memberships): 100,000 XDC per membership
Fund 4 (100 memberships): 50,000 XDC per membership
Fund 5 (250 memberships): 20,000 XDC per membership
This capital raised will be strategically utilized, with 80% allocated to the REFI Funds (DAOs) for direct investment in promising companies and 20% contributed back to the ecosystem for liquidity pool management. This model not only ensures the sustainability of the Circularity Finance ecosystem but also empowers the REFI DAOs to make impactful investments.
The REFI DAOs' investment approach includes assisting companies in obtaining a Sustainability Designation (REFI NFT), in exchange for 5% of the company's token supply. This arrangement creates a mutually beneficial growth trajectory, with a long-term vision supported by the stipulation that REFI Funds can only sell up to 1% of the acquired token supply per year after a one-year cliff. This mechanism incentivizes the REFI DAOs to provide ongoing support to the incubated projects, ensuring their success and the continual growth of the fund's capital through strategic DEFI protocol investments and the nurturing of more companies in the cycle of regenerative finance.
This innovative model established by the REFI DAOs under Circularity Finance heralds a transformative approach to funding and supporting companies within the realm of Regenerative Finance. The model not only offers a pathway to sustainable growth for emerging companies but also aligns with broader objectives of environmental stewardship and economic inclusivity.
REFI DAOs have the responsibility to manage 4 million XDC per fund, are strategically positioned to invest in companies demonstrating potential for significant contributions to Regenerative Finance. The eligibility criterion for such an investment hinges on a company's performance in the Green Cross Pre-Assessment Test, where a minimum of 20% efficiency is required.
Post-investment, companies engage in a rigorous process overseen by the Green Cross UK Chapter to obtain a sustainability designation. This designation is not merely symbolic; it serves as a gateway to numerous benefits, fundamentally altering how these companies interact with the financial ecosystem:
a. Access to Conventional Financing: The sustainability designation acts as a leverage point for companies to negotiate working capital loans at more favorable rates from traditional banking institutions. This benefit underscores the growing recognition of sustainability as a value enhancer in the eyes of conventional financiers.
b. DEFI Financing Opportunities: From Q1 2025, the REFI NFT (Sustainability Designation) will enable startups to tap into Decentralized Finance (DEFI) through Asset-Backed Lending Pools on Circularity Finance’s lending platform. This marks a significant milestone, offering an alternative to traditional funding sources and aligning financial incentives with sustainability goals.
c. Integration with the Green Cross Registry: The designation also facilitates the registration of IoT devices within the Green Cross Registry, allowing for the seamless synchronization of data and production items. This integration is crucial for the development of a Credit Registry, aiming to track and reward sustainable practices accurately.
A Decade-long Collaboration: The inception of the REFI DAOs is intrinsically linked to the ambition of developing a comprehensive Credit Registry. This registry, a collaborative effort between Circularity Finance and the Green Cross UK, seeks to catalog and incentivize sustainable practices across industries. Over the next ten years, this partnership will work tirelessly to expand the registry, ensuring that companies contributing positively to the environment are recognized and rewarded accordingly. The REFI DAOs within the Circularity Finance ecosystem offer a compelling incentive structure designed to encourage public participation and investment in the growth of sustainable startups. By joining a REFI DAO, members not only contribute to the advancement of regenerative finance but also stand to gain from the ecosystem’s prosperity. Here’s a breakdown of the incentives for joining a REFI DAO and the mechanisms in place to ensure members benefit from their participation.
Profit Sharing through Token Airdrops: For every investment made by the REFI Funds in sustainable startups, 5% of the startup tokens are allocated to the REFI Funds as part of the venture capital (VC) investment agreement. Out of this allocation, 1% of the total tokens received by the REFI Funds is designated for airdrop to all members of the DAO. This mechanism ensures that the benefits of the investments are shared directly with the DAO members, fostering a sense of collective success and participation in the ecosystem's growth.
Impact of Membership Size on Token Distribution: The number of members within a REFI DAO directly influences the quantity of tokens each member receives from the airdrop. A smaller membership base means a larger share of tokens for each member, whereas a larger membership base results in smaller individual shares. This dynamic encourages early participation and long-term commitment to the DAO.
One-Year Cliff for DAO Investments: While the REFI Funds have a one-year cliff before they can sell off their startup token holdings, the immediate airdrop of 1% to DAO members provides an immediate benefit for their involvement and support of the ecosystem.
Members of the REFI DAOs who hold NFT memberships have the opportunity to stake these NFTs to earn a 3% Annual Percentage Rate (APR) in REFI tokens. This staking reward further enhances the value of participation in the DAO, providing a passive income stream in addition to the benefits received from the ecosystem's growth.
The REFI tokens earned through staking can be utilized to acquire Business License NFTs for ecommerce shops within the CIFI Metaverse. This unique benefit allows DAO members to expand their entrepreneurial ventures into the metaverse, tapping into new markets and opportunities within the rapidly evolving digital economy.
The REFI DAO investment model represents a pioneering step forward in financing sustainable growth and innovation. By bridging the gap between traditional and decentralized finance, and by creating a robust framework for recognizing and incentivizing sustainable practices, the REFI DAOs, in collaboration with Circularity Finance and the Green Cross UK, are setting a new standard for how companies can thrive in an increasingly eco-conscious market. This model not only promises direct benefits for the companies involved but also contributes to the larger goal of fostering a sustainable, regenerative global economy.
