# Innovative Mechanisms for Financing Bioregional Regeneration 6. Innovative Mechanisms for Financing Bioregional 113 Regeneration 6.1 Web3-based eco-credits, Decentralized Autonomous 114 Organizations, and Ecological Institutions Case Study 6: Regen Network and Eco-Credits - A Novel Funding 115 Mechanism for Regeneration 6.2 (Digital) Nature-based Currencies 118 6.3 Local Market Networks and Bioregional Vouchers 118 6.4 Bioservices Banks 119 6.5 Participatory grant-making through Quadratic and Conviction 120 Voting Case Study 7: Golden Bay and the Wellbeing Protocol – Participatory Grant- 120 making through Quadratic and Conviction Voting in Practice 6.6 Quadratic Funding and Equity Crowdfunding as proxies for 122 capital allocation 6.7 Retroactive Public Goods Funding (RetroPGF) 123 6.8 Web3 flow funding and dynamic token issuance mechanisms 123 for living, adaptive economies 6.9 Place-based Bioregional Tithing, voluntary taxation, and 124 Business Improvement Districts 6.10 Advance Market Commitments for bioregional regeneration 124 6.11 Profit Pooling and whole economy health as triggers for 125 investor returns  6.12 Obligation Clearing (also known as netting) and Mutual Credit 125 as a liquidity-saving mechanism -> 6. Innovative Mechanisms for Financing Bioregional Regeneration A series of innovative financial tools and approaches is emerging that can help to capitalize BFFs and support the transition of a bioregional economy. Some worth mentioning include: — Decentralized Autonomous Organizations and Web3-based eco-credits — (Digital) Nature-based Currencies — Local Market Networks & Bioregional Vouchers — Bioservices Banks — Participatory grant-making through quadratic and Conviction Voting — Quadratic Funding and Equity Crowdfunding as proxies for capital allocation — Place-based Bioregional Tithing, voluntary taxation, and Business Improvement Districts — Advance Market Commitments for bioregional regeneration — Profit Pooling and whole-economy health as triggers for investor returns Many of the themes explored in this book are aligned with the values and patterns driving the decentralized finance or “DeFi” movement. The authors believe that the potential of existing protocols, tools, technologies, and templates in the Web3 space to bolster the bioregional movement and supercharge grassroots regeneration, has – as yet – not been realized. 11 For example: relationality, reciprocity, responsibility, respect, reverence, regeneration, redistribution, and reconnection Table III. Case Studies CASE STUDIES 1. Salmon Nation – Envisioning a Nature State 2. Bioregional Weaving Labs in South East Ireland – An Example for a Multi-Stakeholder Process and Bioregional Regeneration 3. The Bioregional Learning Center in South Devon – Modeling Bioregional Hubs 4. Hawai‘i Investment Ready Initiative – An Intermediary for Investing in a Resilient Economy for all Hawai‘i 5. Spruce Root – An Indigenous-led CDFI Catalyzing a Regenerative Economy 6. Regen Network and Eco-credits – A Novel Funding Mechanism for Regeneration 7. Golden Bay and the Wellbeing Protocol – Participatory Grant-making through Quadratic and Conviction Voting in Practice 8. Regenerate Cascadia – Coordinated and Coherent Bioregional Organizing 9. The Edge Prize – Scaling What’s Possible by Supporting Regenerative Innovators 10. Hylo – A Coordination Platform for the Future of Bioregional Organizing 11. ReCommon – Regenerative Common Land Trusts 12. Regenerosity – Flowing Capital to Grassroots Regenerators platforms, provide a transparent and traceable mechanism for validating ecological health. They can measure and trace such indicators as carbon sequestration, biodiversity indices, erosion mitigation, water conservation, social prosperity and wellbeing, and cultural integrity indicators like Indigenous ancestral stewardship. (see case study on Regen Network below). These eco-credits can be tokenized and traded on decentralized marketplaces, allowing stakeholders to invest in bioregional regeneration initiatives. It is important to recognize that these eco-credits are not primarily designed to “offset” destructive activities, as in the case of conventional carbon credits. They can play a much more flexible role in recording the community-determined value of a set of regenerative actions, and they can identify the value flows of biodiversity and ecosystem services in need of preservation or regeneration and validate effective action taken. Eco-credits can support the shift to more pluralistic approaches to assessing value within a bioregion. This enables a more transparent view of financial beneficiaries so buyers can make more informed choices that align with economies rooted in equity and commons stewardship. The joint ownership and authorship of eco-credits is made possible through decentralized protocols in the form of blockchain-powered DAOs. DAOs can be understood as an evolution of commons, combining digital governance with common pool resource management. They enable decentralized decision- making and resource allocation within a community, leveraging smart contracts, to automate the distribution of funds for bioregional regeneration projects based on predefined criteria and community consensus. Through DAOs and Web3- based eco-credits, communities can mobilize financial resources in a transparent, accountable, and decentralized manner. Examples of DAOs innovating to support regeneration include Gitcoin, Kolektivo, and Big Green DAO. Ecological Institutions use decentralized protocols to enable the creation of novel legal and economic actors, which would not be possible in a conventional centralized system of ownership, sensing, and governance. These Institutions enable non-conventional ecological actors, like non-human organisms, ecosystems, and even whole bioregions, to own their own currency, deeds, and information held on their unique blockchain address (See more in the Regen Network case study below).232 CASE STUDY 6: Regen Network and Eco-Credits - A Novel Funding Mechanism for Regeneration By: Austin Wade Smith About the Regen Network Established on the belief that land stewards and local communities should define what eco-social regeneration looks like in their context, the Regen Network is an open source technology stack and blockchain dedicated to the redefinition of value, away from extraction, towards planetary regeneration. At the core of the project, is the belief that the instruments used to align finance with environmental wellbeing 232 Regen Foundation: Ecological Institutions → Protocols to Grow Autonomous and Convivial Ecological Actors  must be owned and governed by communities practicing regeneration. One of the primary instruments in achieving this are eco-credits, a novel funding mechanism that can support the protection of ecosystems and the stewardship practices which regenerate them. An eco-credit can be understood as an evolution of ecosystem service credits used in climate finance, like carbon credits, with several critical differences. Credits function like a discrete unit of value – fungible, non-fungible, or a combination of both – within a regenerative economic paradigm. Unlike philanthropy or impact investing, which allocate resources to critical habitats and people who need it most, regenerative economics redefines value at its root, arguing that ecosystems and their steward relationships produce value while alive and intact through their life- sustaining ecosystem functions, not just as commodities and raw materials. Composition Carbon-tunnel vision – Eco-credits move past carbon-tunnel vision to represent a more holistic definition A myopic perspective of biocultural health. Carbon drawdown, while extremely important, is only one that ignores the multiple parameter in a myriad of factors that define healthy and prosperous ecosystems. interdependent socio- ecological system crises — Eco-credits are multidimensional attestations of ecological health which may that we face to focus only include: on carbon emissions, and/ or focuses solely on carbon — Carbon sequestration emissions reductions as — Biodiversity indices the key climate change response. Phrase coined by — Practice - based methodologies of ecosystem regeneration Dr Jan Konietzko, Maastricht University. — Erosion mitigation — Water conservation — Social prosperity and wellbeing — Cultural integrity like Indigenous ancestral stewardship Attesting to data is a way to validate a piece of data and is comparable to signing a legal document – implying the contents of the data are accepted to be true by the attestor to the best of their knowledge. Governance The dynamic composition of eco-credits reflects the belief that regeneration looks like different measures, indices, and practices in different places. Eco-credits are reflections of their biocultural context. Rather than top-down prescriptions of what regeneration looks like across different contexts endemic to climate finance, the composition of eco-credits must reflect the people, bioregion, and a larger story of place. The definition and creation of an eco-credit is coauthored by the larger group of stakeholders through governance processes: — The primary author of the terms and composition of an eco-credit is the bioregional community directly responsible for the stewardship. — Indigenous Peoples and Local Communities (IPLCs), ecosystem guardians and protectors must hold the primary authority for what biocultural indicators mark the composition of a credit. — This bottom up definition of value is corroborated with external stakeholders, like the scientific community, as well credit purchasers. A process of co-authorship for the definition of value beginning with stewards  themselves means the identity and wellbeing of the communities doing the direct work of restoring and protecting ecosystems are centered in the design and development of eco-credits. Definition through decentralized protocols The joint ownership and authorship of eco-credits is made possible through decentralized protocols in the form of DAOs. DAOs can be understood as an evolution of commons, wedding digital governance with common pool resource management. They are a hybrid of digital knowledge commons and biospheric commons. DAOs can be bioregionally defined; in bioregional DAOs, the members who govern the DAO are bound by a particular region and may include the grassroots communities directly responsible for the regenerative work like IPLC’s, local stewards, community boards, and guardians. DAOs may also be defined by association as guild DAOs, where members who govern the DAO are affiliated by shared knowledge and expertise – like scientific peer communities, supply chains, and impact verifiers. Designing the governance model between bioregional and guild DAOs allows different stakeholders to interact in a facilitated manner to govern the composition, roles, and terms of eco-credits. This is particularly important for the co-authoring of credits between originators and purchasers. It also allows all aspects of the creation of eco-credits to be transparent as appropriate, auditable, and thus continuously accountable to the claims and attestations they define. Ecological Institutions Additionally, the use of decentralized protocols enables the creation of novel legal and economic actors, which would not be possible in a conventional centralized system of ownership, sensing, and governance. Decentralized protocols enable non- conventional ecological actors, like non-human organisms, ecosystems, and even whole bioregions to own their own currency, deeds, and information. Ecosystems are in effect autonomous funds or trusts of information and currency that disperse resources towards different stakeholders or initiatives based on the satisfaction of contractual conditions. These entities, broadly referred to as Ecological Institutions, are an integration of regenerative economics enabled by blockchains and DAOs with the rights of nature movement, proposed by the emerging field of Earth law. Legal personhood and other designations allow organisms, ecosystems, and whole bioregions to own their own currency, data, and contracts in digital form. This means non-humans are able to legally possess digital currencies, digital files, and data sets, as well as digital copies of contracts and deeds. The design and definition of Ecological Institutions is an area for significant potential research, which integrates social governance practices with data inputs in the form of oracles. Oracles can be understood as ecological sensing systems which deliver data about the state of ecosystems and organisms as inputs into software systems, controlling the behavior of algorithms based on conditions in the environment. Ecological Institutions may issue, own, or coordinate the creation and circulation of eco-credits using a stack like the Regen Network. A comprehensive introduction to this topic can be found in the paper, Ecological Institutions by Austin Wade Smith, Regen Foundation, and Earth Law Center. Programmable circulation The relationship between eco-credits and decentralized protocols allows finer control over the terms and conditions of credit sales. Originators of eco-credits are able to specify to whom credits can or cannot be sold, as well as the terms of their fungibility or expiration. This allows the nature of the credit circulation to be programmable  by the originators. We broadly refer to the ability to control how credits are sold, to whom, and the terms of their resale as programmable circulation, because unlike conventional financial systems, eco-credits issued and exchanged on blockchains, allow originators of credits to specify the conditions of how eco-credits are transacted. While enabled by decentralized protocols of ownership and governance, decentralized protocols are not required. The principle of community ownership around the terms and definition of regeneration at a local level lies at the heart of what an eco-credit is. As such, they may be implemented across a wide range of systems, which do not run on top of decentralized ledger technologies like blockchains. Regen Network works to scale joint trust agreements between originators and purchasers around context-specific regenerative action in the form of high integrity eco-credits. The Network supports an international community of practitioners and project developers designing and issuing eco-credits through the Regen Network app. Monthly eco-credit Builder Labs support and catalyze credit development, and are a good entry point into learning more about the relation of eco-credits to BFFs. 6.2 (Digital) Nature-based Currencies Bioregional Banks could issue complementary Nature-based Currencies that base their value on the health and vitality of the local ecosystems - the ecological wealth - in a given bioregion. While most currencies in circulation today are no longer linked to physical assets such as gold, these new currencies would be tied to natural assets – fostering a symbiotic relationship between local economies and ecosystems. With this form of bioregional, asset-backed currency, BFFs could issue tokens representing natural assets like clean water, wild animal populations, or biodiversity conservation – incentivizing regenerative practices and the responsible stewardship of natural assets. Nature-based Currencies could also be backed by a basket of bioregional eco-credits. Ongoing research on the application of active inference233 in the design of Nature-based Currencies can inform prototypes by bioregions. By integrating ecological indicators of health into monetary systems, BFFs can enable a shift in theory of value within the bioregion and beyond. For more information on digital Nature-based Currencies, we recommend reading Nature Based Currencies: Integrating natural capital in advanced monetary systems, a white paper by Open Earth Foundation.234 6.3 Local Market Networks and Bioregional Vouchers While not necessarily a novel solution, Local Market Networks are potentially powerful ways to resource bioregional transitions toward regenerative economies. 233 Friston et al.: Federated inference and belief sharing 234 Additional resources and examples include: Kolektivo: Primer on Natural Capital Currencies; Silvi: TreeForwards; Ernesto van Peborgh: Living Capital Design: The Rise of Nature-based Currencies; Single.Earth: World’s First Nature-Backed Currency MERIT These networks are decentralized systems connecting producers, consumers, and investors within a bioregion. Emphasizing local sourcing, production, and consumption, the networks can take various forms, including farmers' markets, Community-Supported Agriculture (CSA) programs, online platforms for local goods, and community-based cooperatives. Local Market Networks aim to strengthen local economies, reduce environmental impact by minimizing transportation and supporting regenerative practices, and foster community resilience by promoting relationships between producers and consumers locally. They often prioritize transparency, ethical sourcing, and community engagement over traditional market dynamics such as competition. Local Market Networks can also include innovative approaches like Bioregional Community Voucher systems as a form of community currency.235 These systems promote local economic resilience by circulating currency within the community, facilitating transactions between residents and with local businesses. Unlike conventional currency, these vouchers are tied to a specific bioregion, encouraging value exchange within the bioregional economy and supporting bioregional regeneration efforts. Such community currencies enable the two essential functions of money (i.e. serving as a standard of value and facilitating exchange), promoting quick circulation and discouraging its utilization as a store of value or a medium for speculation. They foster a sense of community ownership and solidarity, empowering residents to actively participate in shaping the future of their bioregion. They can also be used to avoid the undesired financialisation of value flows. 6.4 Bioservices Banks A Bioservices Bank236 is designed to integrate ecological services into the local financial system by turning them into financial assets. By issuing bills of exchange pegged against a stable currency and underwritten by third parties, the bank monetizes ecological services, creating a self-sustaining engine for financing ecological action. A Bioservices Bank operates by issuing notes equivalent to a national currency, backed by the value of ecological services. These notes become liquid in the market once the underwritten ecological services are matched with liabilities or financed through various methods. This system effectively transforms environmental conservation into a bankable service, creating a perpetual financing mechanism. A pivotal element of this concept is the integration of a system where landowners and other actors can attribute their future rights to ecological services — for example the carbon sequestration rights of their land to the bank. This process, functioning similarly to assigning rights, allows these stakeholders to contribute their future ecological assets to the bank. In exchange for this contribution, they receive equity in the Bioservices Bank. This mechanism ensures that stakeholders directly benefit from the bank's capitalization and investments made by the bank or other agents in ecological projects. Thus, it creates a mutually beneficial relationship, aligning the interests of individual landowners and other actors with the broader goals of transitioning to regenerative bioregional economies. A key feature of the proposed bank is its reliance on automation and transparent governance. The verification of ecological services, transaction processes, and banking operations would be fully automated, utilizing digital sensors and 235 Examples include the Community Asset Vouchers program developed by Grassroots Economics. 236 Credit to Raj Kalia and Indy Johar of Dark Matter Capital Systems. transparent frameworks. This ensures efficiency, accountability, and public trust. The governance structure is designed to avoid conflicts of interest. It suggests an independent oversight mechanism, separate from the banking institution’s administrative body. This is crucial for maintaining impartiality and enhancing credibility. 6.5 Participatory grant-making through Quadratic Voting – A method Quadratic and Conviction Voting of collective decision-making where individuals assign votes Place-based participatory grant-making allows members of bioregional to reflect both the direction and communities both to submit projects and vote on the ones they believe best serve intensity of their preferences. Instead of merely indicating the regeneration of the bioregion. Project proposals and votes are submitted via which option they prefer, an app or platform which builds on both Quadratic Voting and Conviction Voting participants can allocate more mechanisms. votes to express stronger support for specific options. In the case of participatory grant-making for bioregional regeneration, projects This system allows users to proposed by the community will need to align with the Bioregional Regeneration "purchase" additional votes on a particular matter, thereby Strategy. Once a project gains sufficient community support, it advances to the aligning the voting outcome stewardship phase, where stewards, who also serve as bioregional trustees, with the highest willingness collaborate with project leaders to finalize submissions for funding consideration. to pay, rather than solely the Successfully approved projects receive funding. They then document expenses preference of the majority, and project completion status and upload relevant information onto the selected regardless of the depth platform to enable transparency and accountability. of individual preferences. Payments for votes can be made using either artificial or Engaging bioregional stakeholders in proposing and voting on projects which they real currencies, such as voting feel best support the Bioregional Regeneration Strategy allows the community to be tokens distributed equally empowered and connected. This helps foster a sense of purpose, connection, and among voting members belonging to place. Since the projects are carried out on a rolling basis, the funding or fiat and complementary can be administered on a similar basis. currencies with actual economic exchange value.237 Participatory grant-making through quadratic and Conviction Voting is currently Conviction Voting – An being applied and piloted in the Golden Bay Bioregion in New Zealand (see Case approach to collective Study 7 below). decision-making that accounts for the ongoing collective preferences of community members. Unlike traditional methods where votes are cast during a single, time-limited session, in Conviction Voting, CASE STUDY 7: individuals continuously Golden Bay and the Wellbeing Protocol – express their preferences for the proposals they wish Participatory Grant-making through Quadratic and to support. Participants have Conviction Voting in Practice the flexibility to change their preferences at any time, but By: Reggie Luedtke the longer they maintain their support for a specific proposal, the greater the "strength" of About Mohua 2042 their conviction becomes. Mohua 2042 is a Bioregional Trust located in the bioregion of Mohua/Golden Bay, This emphasis on sustained commitment rewards Aotearoa/New Zealand. Mohua 2042 convened 60+ members of the local community longstanding community in a process to create a strategic and inspirational vision for the bioregion over the members with consistent preferences, granting them more influence compared to short-term participants who 237 Lalley and Weyl: Quadratic Voting: How Mechanism Design Can Radicalize Democracy may only seek to sway a single 238 Jeff Emmett: Conviction Voting: A Novel Continuous Decision Making Alternative to Governance vote.238  next 20 years. During the gathering, blank posters around 9 key themes were placed around the venue and people collaborated in adding to and refining each of these. As a next step the trustees converted the posters into a 65 page strategic vision document for the bioregional trust.239 The document was well received by the local government and has been published on the local district council website, under Mohua 2042. Next, the trustees needed to decide how to carry out the execution of the strategy, and how to fund it. It was decided that the combination of purpose-owned companies, which exist for the benefit of the community and bioregion, would be supported along with a participatory grantmaking process – where anyone in the community could propose and vote on ideas. The Wellbeing Protocol team, a not-for-profit organization building technology-based infrastructure, was asked to set up a trial and developed an app that bioregional stakeholders could use for proposals and the voting process. To positively constrain the types of projects which could be approved, the strategic vision was adapted into a constitution; all of the projects proposed and approved needed to fit with the constitution and vision. Once initial funding was secured from the local Tasman District Council, a kickoff meeting for Mohua Wellbeing 2042 was organized. Launching the Trust During the kickoff, community members learned both how the app functioned, and shared the projects they believed were valuable in advancing the goals set out in the strategic vision document and constitution. They also learned about other potential local projects, and the members who were present voted on projects using the app. The Wellbeing Protocol team demonstrated that projects which receive a certain number of up-votes would be approved to move to the next stage through Quadratic Voting. By this method, rather than using 10 percent of their tokens to give one up- vote, a member could use 40 percent of their tokens for two up-votes or 90 percent of their tokens for three up-votes. This allowed community members to cast their votes according to how passionate they were about a project. The up-votes would also be buffered using the Conviction Voting approach, such that the full power of the vote only set in after the vote was not moved or changed to another option. Once a project receives enough up-votes from the community, the bioregional trustees – who are stewards within the app – can choose to move the project to the next phase but this is only possible if the project matches with the constitution, which is viewable by anyone within the app. Prior to moving the project to the next phase it is also reviewed in terms of its budget and feasibility, and stewards can make suggestions for changes to the project proposers during this time. The projects that make it to the final phase are then voted on again by the community. The amount of funding the project requires compared to the amount of money in the community funding pool determines the up-vote threshold the project must meet to be approved. Moving to implementation As of March 2024, four projects have progressed to the final proposal phase. Once a project is approved, the stewards work with the project lead to transfer the approved funding amount. As the project evolves, photos and videos related to the progress of the project are uploaded to the app for anyone in the community to view. In the first phase of funding, individual project costs ranged from NZD 200 to 1,000. The 239 Mohua 2042: Strategy Document  next phase involves securing ongoing funding to top up this community funding pool, ideally by local government and local companies. Initial funding was sourced by the local government and a few leads have been established with companies that have verbally committed to allocating 10 percent of their profits to community projects that support bioregional wellbeing. One advantage of the rolling approach is that capital can be added as trust is built that the community can collectively propose, steward, and execute on valuable projects. The plan is also to help steward community-benefit companies that are steward- owned, i.e. owned by their purpose. These companies would be required to tithe 10 percent of their profits to Mohua Wellbeing, and would receive help with their incubation from local community business advisors as well as receiving community or purpose oversight from the Mohua 2042 Bioregional Trust. Mohua 2042 is a charitable non-profit, and the trust deed allows trustees to serve in an oversight capacity for purpose-owned companies in an unpaid capacity. 6.6 Quadratic Funding and Equity Crowdfunding as proxies for capital allocation Crowdfunding is a financing instrument that allows ordinary citizens to participate in funding projects that are subjectively important to them. In the special case of equity crowd-funding, participating individuals gain shares of the funded project or business in return for their money. Place-based Equity Crowdfunding thus allows local stakeholders to participate in the success of the local regenerative economy, and simultaneously weaves even stronger connections in this local economy. At the same time, aggregated data from such place-based crowdfunding platforms could help funders and investors who are not as immersed in the local context to understand which projects locals consider worthy and promising. This helps them to overcome knowledge gaps, and investment decisions can be made more in alignment with what local people think best contributes to the Bioregional Regeneration Strategy. This approach operates on the premise that locals know best what is required for holistic regeneration, and where the likelihood of financial Quadratic Funding – By success is highest. This way, more money can find its way to the right regeneration allocating funds based on projects in a bioregion. By surfacing tacit grassroots knowledge, place-based Equity a quadratic formula that magnifies the impact of Crowdfunding can act as a conduit, bridging the often-cited gap between those many small investments intimately acquainted with the needs of local regeneration and capital holders from the community (similar wanting to finance it.240 to crowdfunding) through a so-called ‘matching pool’ that Another mechanism that is currently tested to amplify community voices and is resourced by larger capital knowledge in financial resource allocation is Quadratic Funding – an idea that providers, Quadratic Funding encourages widespread emerged as an extension of Quadratic Voting as described above. participation and fosters a diverse array of projects In the context of building regenerative bioregional economies, this approach can that resonate with local empower grassroots movements, Indigenous communities, and local stakeholders communities. Projects that to propose and implement initiatives aligned with the Bioregional Regeneration receive a given amount of Strategy. Beyond magnifying small investments, Quadratic Funding, similar to community funding from a broader base of individuals receive more match funding 240 Credit to Durukan Dudu. than those that receive the 241 Quadratic Funding (QF) – Unlocking the power of community funding. See (Buteren et al. 2020) for the seminal given amount from only a few articulation. community investors.241 Quadratic Voting, incentivizes collaboration and fosters a sense of collective ownership, ensuring that resources are allocated to projects with broad-based support and high potential for long-term regenerative impact. Since 2019, Quadratic Funding pioneer Gitcoin DAO has channeled over $60 million from 4.2 million unique donations to fund open-source Web3 digital infrastructure and social and ecological impact projects, including $3.9 million towards “climate solutions.” An example of a funder leveraging Gitcoin for regeneration, is Ma Earth’s recent 2024 grant round, which supported regenerative land projects. 6.7 Retroactive Public Goods Funding (RetroPGF) Another model for funding regenerative projects is the Retroactive Public Goods Funding (RetroPGF) approach developed by the Optimism Collective. This model is based on the idea that it is easier to agree on what was useful in the past than what might be useful in the future. The approach aims to enable distributed but not fully decentralized capital allocation to public goods242 projects (similar to Quadratic Voting and Quadratic Funding). In the case of RetroPGF - which is initially focused on funding software development - badge holders vote on projects and funding is allocated based on the median score projects receive. Through this approach, the community can select criteria for people with specialized expertise. These specialists then do the necessary research and analysis to determine which projects created the greatest community benefits. The RetroPGF structure provides possible exit liquidity for public goods projects, which opens up a market for early investment in those projects. In the case of RetroPGF, revenue from the use of open source software funds that work retroactively. This approach to the governance of capital allocation could support regenerative projects – particularly in areas like ecological regeneration that also require a sufficient level of technical expertise, whether Western or Indigenous, and where revenue is hard to capture directly at the project level. One of the major challenges with this approach is that it requires projects to have access to seed funding at the outset. Thus, it will likely not work well in low-income communities. 6.8 Web3 flow funding and dynamic token issuance mechanisms for living, adaptive economies Traditional grant models and discrete funding can put the focus on securing operational funding, reducing the amount of time organizations spend on performing mission-related work. For regenerative economies to flourish, resource allocation must more closely resemble the living systems they aim to mirror in information and economic systems. Flow funding has been identified as an innovative mechanism for this purpose, and with blockchain and novel digital currency issuance mechanisms, funding flows can be automated, integrated, and expressed as highly adaptive economies that can contract and expand based on needs and value creation in the network. 242 In this book, we primarily refer to public goods as ‘common assets.’ One such mechanism making use of flow funding – bonding curves – holds great potential for the implementation of BFFs. Bonding curves243 are a new tool in the Web3 space that tie two or more elements of a system together through mathematical relationships encoded into smart contracts. They provide an economic invariant between the supply of tokens and the reserve assets backing their value, making token price deterministic and providing guaranteed liquidity for tokens. Adjusting the circulating supply based on demand dampens the volatility and couples with the demand for the token’s utility. Bonding curves and primary market token issuance lay the economic foundations for new tools that can address some of the major challenges of distributed economic systems, such as bootstrapping small economies, providing necessary exchange liquidity, facilitating demand-responsive dynamic token supply, and continuous fundraising. Bonding curves have also been ‘augmented’ with the addition of common pool treasuries or even prediction markets, to improve the collective signaling capacity of these new tools for social and ecosystemic benefit. 6.9 Place-based Bioregional Tithing, voluntary taxation, and Business Improvement Districts Bioregional Tithing, voluntary taxation, or taxation-like initiatives, such as Business Improvement Districts (BIDs) offer a promising avenue for financing bioregional regeneration. BIDs provide a defined area within which businesses elect to pay an additional fee in order to fund projects within the district's boundaries. By harnessing the collective financial contributions of businesses, property owners, and residents within a specific geographic area, BIDs can generate a dedicated pool of funds to support initiatives that aim to support regeneration and achieve what is set out in the Bioregional Regeneration Strategy. Voluntary taxation mechanisms like BIDs provide a means for stakeholders, including organizations and individuals, to directly invest in the health and resilience of their local ecosystems, fostering a sense of ownership and responsibility within the community. Additionally, they enable collaborative partnerships between public and private entities, leveraging resources and expertise from both sectors to drive meaningful ecological improvements at the bioregional level. Combined with participatory budgeting (such as outlined in Section 6.5) Bioregional Tithing can help communities mobilize financial resources in alignment with their shared values and priorities. One inspiring precedent at the bioregional scale is the Shuumi Land Tax on Ohlone territory in the East Bay of San Francisco. 6.10 Advance Market Commitments for bioregional regeneration Similar to offtake agreements, Advance Market Commitments (AMCs) constitute a promise to purchase or financially support a product upon its successful development. Governments and private foundations commonly offer AMCs to incentivize the creation of vaccines or treatments. In return, pharmaceutical companies agree to supply a specified quantity of doses at a predetermined price. 243 Jeff Emmett et al.: Exploring Bonding Curves: Differentiating Primary and Secondary Automated Market Makers This funding approach is employed when the expenses associated with research and development are deemed prohibitive for the private sector without assurance of a minimum volume of sales. In the space of bioregional regeneration, AMCs can be used as investment funds committing financial capital to projects that promise future ecological value and regenerative asset creation, but are risky or expensive to initiate. Using this tool, financial resources would be guaranteed to ventures, for example regenerative food startups, that meet certain ecological impact criteria, providing a stable market for their future development. 6.11 Profit Pooling and whole economy health as triggers for investor returns Building resilient bioregional economies relies on a strong connectivity between local businesses. In these economies, the financial health of one organization is inextricably interlinked with that of others and with the whole ecosystem – much like in the web of life in biology. With a Profit Pooling agreement, participating businesses agree to contribute a defined fair and equal percentage of their monthly or annual profits to a common insurance pool. This pooling of excess profit ensures that if any participating business faces cashflow or profitability issues due to external and uncontrollable circumstances, it can access funds to stabilize its operations. Profit Pooling has long been utilized in large global corporations to ensure healthy support between their various subsidiaries; its implementation within local economies could yield profound benefits that are currently untapped. By bolstering the resilience of individual businesses, Profit Pooling cultivates resilient or even anti-fragile enterprise ecosystems, fortifying the fabric of local economies Anti-fragile – The quality of a against external shocks.244 system, entity, or process that allows it to not only withstand — but actually benefit and Data that is generated from the usage of profit pools in a regenerative local grow stronger from — stress, economy could inform the timing and size of investor returns in a single company volatility, and uncertainty. as part of that ecosystem or an investment portfolio. Tying the payment of returns Unlike fragile systems, which to ecosystem health incentivizes holistic investment strategies that prioritize break under stress, or robust bioregional regeneration, keep invested money circulating in a local economy, and systems, which withstand prevent financial extraction. stress without changing, anti-fragile systems thrive and improve in response to challenges and disruptions. 6.12 Obligation Clearing (also known as netting) and Mutual Credit as a liquidity- saving mechanism The practice of debt clearing is centuries old, with origins in 14th century Italian banking practices. Now, its resurgence using Web3 technologies and interdisciplinary research that integrates graph and monetary theory offers new possibilities in leveraging payment graphs and cycles (second order dynamics) rather than money itself.245 The basic concept is to create greater economic efficiency and reduce the need for liquidity by clearing debts within a network, where participant’s obligations cancel each other out without money or a 244 Inspired by Graham Boyd’s book Rebuild. 245 Obligation Clearing and Mutual Credit are explained and being actively developed by Informal Systems and Sardex, a monetary network and commercial credit circuit based in Sardinia. single token changing hands. Paired with Mutual Credit in the form of loans on complementary currency backed by future production, these clearing loops can save businesses up to 50 percent of their need for cash to settle those debts. This could offer BFFs and corollary organizations significant savings in operating costs and provide shelter in high interest rate environments.246 246 For more information see Fleischman et al.: Liquidity-Saving through Obligation-Clearing and Mutual Credit: An Effective Monetary Innovation for SMEs in Times of Crisis.  7. Additional Case Studies: Stories of Bioregional Organizing and Bioregional Finance in Action  7. Additional Case Studies: Stories of Bioregional Organizing and Bioregional Finance in Action The case studies in this chapter tell diverse stories about how dedicated social processes are combined with thoughtful technological innovations to create strong foundations for BFFs. While each story is substantial as a standalone case study, their real power is found in the synergies between them, and how these linkages give rise to cascading benefits in the bioregions served by these projects and organizations. In these examples, Regenerate Cascadia (Case Study 9) emerged from the Inaugural Edge Prize (Case Study 8), which used Hylo (Case Study 10) as a platform for convening leaders to consider potential beneficiaries. As a set of independent but interlocking narratives they represent a powerful collective case study in how creative efforts across bioregions are resourcing each other and amplifying the global movement.  CASE STUDY 8: The Edge Prize – Scaling What’s Possible by Supporting and Connecting Regenerative Innovators By: Edward West About the Edge Prize The Edge Prize, represents a new methodology for growing a bioregional community by hosting a distributed online accelerator and prize challenge. The goals of The Edge Prize methodology are to: — Convene a group of extraordinary entrepreneurs, leaders, and innovators throughout a bioregion working on regenerative projects that benefit the lands, waters, and people of the bioregion — “The Edgewalkers.” — Invite them into a supportive community of reciprocity, mentorship, workshops, and collaboration. — Amplify their stories, in order to bring resources, collaboration, partnerships, and inspire others to start their own regenerative initiatives — in their bioregion and beyond. — Build from these stories a public-facing library of “what’s working” to help scale and accelerate regenerative practices worldwide. Benefiting communities and ecosystems The inaugural Edge Prize, piloted in Salmon Nation in 2023, was created by Applied Alchemy and the Terran Collective, and sponsored by Salmon Nation Trust and the Magic Canoe. The 2023 Edge Prize invited individuals and organizations doing something that benefits their community and surrounding ecosystems, offering dozens of cash prizes, ranging from $500 to $20,000. Individuals and organizations stewarding projects in areas as diverse as Food and Agriculture, Health, Culture and Education, Water, Energy, Community Finance and Development, Water, Ecosystem Restoration, or Governance sectors were invited to apply, attracting a diverse and accomplished collection of 130 leaders and entrepreneurs throughout Salmon Nation. Overall, USD 80,000 were distributed to deserving impactful projects in Salmon Nation bioregion, with USD 60,000 of that allocated by the community themselves in a participatory funding process that supported all participating Edgewalkers to get to know each other’s work. All applicants were invited to create a brief written description of their work, as well as a short video describing their work. These formed the basis of a public open-source library of bioregional solutions. Applicants, along with subject matter experts, voted to allocate the prize money to the most compelling applicants. Applicants were also invited into an online community, encouraged to discover and learn about each other’s work, and were given access to capacity-building support from mentors and subject-matter experts. The overall structure and format of the Edge Prize encouraged Edgewalkers to collaborate with each other, and numerous self-organizing partnerships emerged during the program. In one example, two Edgewalkers partnered with each other to convene the first Edge Prize-inspired event series and movement building strategy: Regenerate Cascadia.