How DAOS and ReFi Can Be Used To Help Ease The Cost Of Living Crisis

Tired of rising bills and feeling helpless? Blockchain technology might hold the key. This blog explores how DAOs and ReFi can help us bulk-buy heat pumps for homes at a discount, saving money and combating the cost of living crisis.

February 29, 2024

How DAOS and ReFi Can Be Used To Help Ease The Cost Of Living Crisis

The UK cost of living crisis is something we are sure you're tired of hearing about, nowadays it seems like the prices of everything (houses, bills, food, etc.) are constantly on the rise with very little support, you may even be sceptical of traditional financial institutions and government programs. This is a genuine problem affecting millions of UK residents nationwide and maybe even yourself, however, there may be a way to help save money during this time of rising costs, DAOs and ReFi can be adapted to help bulk buy products that can help provide a more sustainable way of living. In this blog, we are going to be focused mainly on energy, with ways to save on heating bills and electricity.

In this blog you will learn how using blockchain technology in the form of a DAO (decentralised autonomous organisations) that does ReFi (regenerative finance) could be adapted to provide a process that could be started to help procure heaters for your homes, bought at a discount through buying in bulk. Bulk buying is known as the purchase of large amounts of a product usually at a discounted price, however, the average person often finds themselves needing more funds to bulk buy products for their homes, this is where DAOs come in.

Imagine an online community where people with a shared goal can come together using the newly integrated DAOs to achieve their dreams. You find a group called “Heat pumps for Humanity” for example, which is a group built around the idea of crowdfunding money for heaters in homes around the UK with smart contract magic, which is transparent, secure, and automatically handles the crowdfunding. All the system needs is your contribution, so that you and millions of homes around the UK can become interlinked with the mission to purchase affordable heating.

First, let's look at the benefits of what purchasing a heat pump can do for a home, a heat pump is a standalone fitted appliance that heats a room, these heat pumps use a mixture of water and anti freeze which absorbs natural heat from the ground as opposed to the traditional way of radiators which use a central heating system.

Heat pumps standout benefits are their energy efficiency, the use of chemical pumps fed through a ground loop negates the use of electric energy that helps minimize waste. Based on the information given to us by the nationalgrid we see that the short-term cost of these heat pumps is that they have a slightly higher cost than other portable heaters. However, their efficient operations mean that you are more than likely to see a reduction in both electricity and heating bills.

However, how do we combat the higher costs which some people may struggle to justify, through bulk buying. We previously mentioned how bulk buying is a method of buying a large amount of one product to get an overall discount but how would we be able to accomplish this? Through DAOs of course, which run on blockchain technology and powered by smart contracts, they allow communities of people to come together to start protocols funds that they can use to finance certain projects. 

Let's run through a hypothetical, residents of a UK estate are often troubled with cold houses but feel pressured to keep their heating running low due to the mounting costs. But, one person decides enough is enough and they want to purchase a heat pump to heat their house during harsh UK winters. Unfortunately, the short-term costs are too much for them but luckily for them, they have done their research and have come across an online space that promotes the incorporation of DAOs to help solve real-world impact problems.

This person looks into it and decides that they want to create a fund, word spreads and people in similar situations may also decide to invest into the heater fund. Investors in the heater fund will find themselves in ownership of a token, this token grants the investor permissions that allow them to have a voice when it comes to decision-making of allocating funds, only investors into this heater fund will be able to make decisions on the fund itself, keeping the power in the people's hands rather than just one person, having this sort of democratic systems means that we don't run the risk of people setting up funds and running away with the money and it also lives up to the promise of community-driven projects that the DAOs help support.

As the fund gains more traction a motion can be set to bulk buy heaters and distribute them to each of the members, members of the fund must do their research into what heaters to buy and what company to bulk buy them from, again this goes back to the main ideology behind the DAO with the idea that members act as stakeholders for the fund instead of a governing body having overall say. What about installation you might be wondering? Well, the community could use the savings made from their bulk purchases to pay for the installations into member homes. Yes, using a DAO to crowdfund could really be just that simple in the future.

The idea that as a community we have to struggle alone in the hard times is a thing of the past, with these new systems like DAOS, that help collaboration with community-driven products the idea that we are all alone in hardship becomes a thing of the past. Raising funds to help heat homes in neighbourhoods is just one of the many things a DAO can do when adapted correctly.

Unfortunately, DAOs like this don't exist yet, but we have a way of starting one and making all of this possible.

Register your interest here and join our cost of living think-tank on discord, this is the first step in finding community-driven projects that you are passionate about driving. We hope this you've found this post useful, see you on the next one.