Introducing My DEFI Pie Eco Index & Eco Direct: A partnership between Offsetra & Confluence Analytics
Investing is always a game of risk mitigation and patience, and through My DEFI Pie, Confluence Analytics have created a way to generate returns and use the power of compounding to put a dent in long-term risks to both investments and the climate.
My DeFi Pie — Eco Index gives users the same benefits as above, plus exposure to a community-curated DeFi “fund of funds”
Software and the power of markets have already created the most efficient investment pools for investors to have exposure to high-growth assets in cryptocurrency today (and soon to include assets from traditional finance…); we will build off the base of my DEFI Pie, and hope it will be a signpost for other triple bottom line investment vehicles.
Thanks to the release of these two sustainability products, Environment and Social Governance (ESG) investing essentially has a convenient and first-of-a-kind avenue for impact by leveraging the opportunities from Decentralised Finance (DeFi) and coupling them with climate finance markets.
They provide the opportunity for growth through full participation in the DeFi movement, with a portion of passive income being directed towards future-proofing climate solutions through the projects that Offsetra support.
How it works: my DeFi Pie (Eco) — Index
40% of funds are allocated to a cash reserve in rDAI (redeemable DAI) which is invested into an interest-generating pool which is used for collateralised loans. A portion of the interest generated (around 10% APY at the time of writing) will be sent to Offsetra to fund high-impact, certified carbon reduction projects.
Offsetra’s current portfolio consists of forest protection projects in Brazil and Belize, and the deployment of wind power in Honduras. Offsetra publically retire carbon credits from these projects on the Verra Registry to demonstrate the ESG impact of the investments. The impact is quantified in tonnes of CO2 reduced or avoided, and the projects also deliver a range of co-benefits, both social and economic, for the communities where they are located.
The remaining 60% of the funds are in the Balanced Crypto Pie (BCP) token, consisting mainly of wrapped Bitcoin and Ethereum, with additional investments into time-tested large and small-cap DeFi tokens.
My DeFi Pie makes it easy for individuals to diversify across the DeFi space and concurrently support impactful sustainability projects across the globe.
The Future of ESG Investing?
We expect that products like Confluence Analytics’ will see increased demand in the future, we already see those companies adopting sustainability practices outperforming their peers, and public demand for sustainable products across the value chain are rising (Harvard Business Review, 2019).
My DeFi Pie is a brilliant example of how we can shift our financial products to not only gain exposure from some of the most innovative assets on the market, but also to use growth to begin accounting for the externalities that are not currently priced in to our financial system.
For blockchain tech, this is critical especially when considering the current environmental impacts of Bitcoin and the Ethereum network. For example, a single Ethereum transfer emits roughly 17kg of CO2. More complex transactions involving lending or borrowing funds can produce upwards of 50–100kg of CO2. Over time, these things can add up and represent a large portion of a person’s environmental impact.
Check out Offsetra’s Carbon.FYI tool to calculate the emissions associated with your own Ethereum wallet (beware, it may not be a pretty site if you’re an active user or trader of Ether).
This isn’t Offsetra’s first foray into DeFi. As a team of crypto enthusiasts, they have jumped at the chance of getting more involved in the rapid innovations taking place within the world of crypto. For example, they recently worked with NFT artist Sven Eberwein to mint an art piece representing 1000 tonnes of carbon offset. You can read about that collaboration: $MEME x Sven Offset. They are also working with the Spendless team to create an rDAI pool where users can donate interest to sustainability projects in their portfolio.
Confluence is a fintech firm specializing in ESG data analytics and investment strategies. Confluence merges fundamental and quantitative techniques into software-driven, systematic processes that generate predictive performance metrics — along with other valuable, material insights — and produce model, as well as customizable, index investment strategies. Simply put, Confluence offers investors what they need to find an edge and improve results.
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