For the past few days I have been moving between different parts of the Web3 stack. In Day 42 we looked at regenerative stablecoins that back money with climate positive assets, and in Day 43 we explored DePIN, where blockchains coordinate physical infrastructure like wireless networks, maps, and compute. Today I want to tie these threads together and look at how DeFi rails are starting to pay for real world things, not just swaps and yield.
This is Day 44 of my 60 Days of Web3 experiment. If you are new here, you can read the full journey on Medium, checkout Ribhav on Future, and hang out with us in the Telegram at Web3ForHumans.
The old mental model: DeFi stayed inside DeFi
When I first started this journey and wrote about DeFi 101: Decentralized Finance, the mental model was pretty contained. You had protocols like Uniswap, Aave, Compound and MakerDAO that let people swap, lend, borrow, and earn yield, but most of the action happened within crypto. You would deposit ETH or USDC, interact with smart contracts, and earn or lose money based on price movements, interest rates, and liquidity incentives. It was all on chain, all financial primitives, and mostly disconnected from physical infrastructure or real world impact.
That started to shift when real world assets showed up in DeFi. Protocols began tokenizing things like real estate, invoices, carbon credits, and commodities so they could be used as collateral or traded on decentralized exchanges. We talked about this a bit when I covered stablecoins on Day 17, especially the part about how fiat backed stablecoins are technically an RWA because there is a legal claim on dollars in a bank somewhere. But the real shift is happening now as RWAs, regenerative assets, and DePIN tokens start plugging into the same DeFi rails that used to only handle purely crypto native stuff.
The new picture: DeFi as the payment layer for physical infrastructure
Here is the shift I am starting to see after 44 days of this series. DeFi is not just "financial Legos for yield farmers" anymore. It is becoming the coordination and payment layer for real world infrastructure and regenerative projects. Let me unpack what that actually looks like in practice.
Take DePIN networks from Day 43. Projects like Helium, Hivemapper, and Render are using tokens to pay people who run hotspots, dashcams, or GPU nodes. Those tokens need liquidity, staking mechanisms, and ways to convert into stablecoins or fiat so that small operators can actually pay their electricity bills or reinvest in more hardware. That is where DeFi comes in. You can provide liquidity for a DePIN token on Uniswap or a similar DEX, stake it in a yield farm, or use it as collateral in a lending protocol. Suddenly the same DeFi primitives that power purely speculative trading are also funding wireless coverage in rural areas or map data for underserved regions.
Now layer in regenerative stablecoins like AZUSD from Day 42. If a stablecoin's reserves are parked in green bonds, tokenized carbon credits, or renewable energy projects, and that stablecoin is composable with DeFi, you get something new. Someone could deposit AZUSD into Aave to earn yield, and the collateral backing that stablecoin is quietly financing solar installations or carbon removal. Or a DAO treasury could hold a mix of USDC and AZUSD, where the AZUSD portion funds climate positive infrastructure while still behaving like stable liquidity for governance and operations.
The pattern is: DeFi protocols provide liquidity, lending, staking, and payment rails, while the underlying assets are tied to physical infrastructure, renewable energy, verified carbon, or other real world outcomes. It is not just "number go up," it is "networks get built, impact gets funded, and the financial layer routes capital to where it is actually useful."
Concrete examples of this pattern in action
Let me make this less abstract with a few examples, some real and some plausible in the near future.
DePIN treasury strategies: A DePIN project like Helium has a treasury full of its native token. Instead of just holding it or selling it slowly, the treasury could allocate a portion into DeFi yield strategies using stablecoins or liquid staking tokens. That yield can fund ongoing development, hardware subsidies, or community grants. The DeFi layer is basically the CFO of the physical network.
Regenerative lending: Imagine a lending protocol where you can borrow against tokenized green bonds or verified carbon credits. The collateral is not just volatile crypto, it is income producing real world assets tied to measurable impact. Borrowers get liquidity without selling their impact assets, and lenders earn interest backed by something with a yield and a thesis beyond pure speculation.
Liquidity for impact tokens: If a project issues a token to fund renewable energy or reforestation, that token needs liquidity so early supporters and small contributors can exit or rebalance. A Uniswap style pool paired with a stablecoin gives that token price discovery and tradability, while the underlying project continues building in the real world. DeFi is not extracting value here, it is providing the plumbing.
Stablecoin reserves funding DePIN: Flip it the other way. A DePIN network that collects fees in fiat or stablecoins could park those reserves in an impact backed stablecoin like AZUSD. Now the idle treasury balance is not just sitting in a bank, it is funding climate projects while staying liquid and stable for operational needs.
All of these examples share a common structure: DeFi provides composability, liquidity, and programmability, while the underlying assets or tokens represent something tangible in the physical world.
Why this matters beyond just cool integrations
I have spent a lot of this 60 day journey learning primitives in isolation. Blockchains, DeFi, stablecoins, ZK proofs, identity, DePIN, and so on. Around Day 44, I am starting to see how they stack and interact. This DeFi meets physical world layer is interesting to me for a few reasons.
It gives real world projects access to better financial tools. A small solar cooperative or a community wireless network does not have easy access to traditional credit markets or treasury management. DeFi, for all its chaos and complexity, is permissionless and global. If someone can tokenize an asset or launch a small fundraising round, they can plug into liquidity, yield, and payments infrastructure without needing a bank or a VC fund.
It also gives DeFi a clearer answer to the "so what" question. A lot of early DeFi felt like financial infrastructure for its own sake, optimizing for yields and incentives but not really touching anything outside crypto. When DeFi starts funding hotspots, maps, renewable energy, or carbon removal, it becomes infrastructure for coordination and impact, not just speculation.
And from a builder or product perspective, this is where things get interesting. You can design systems where the financial layer and the impact or infrastructure layer are tightly coupled. Your treasury strategy is not separate from your mission, it is part of it. That is a very different design space than "we have a token, now what?"
The messy parts we should not ignore
Of course this is not magic or guaranteed to work. There are real problems and open questions that anyone building or investing in this space should be honest about.
Liquidity and volatility. Most DePIN and impact tokens are thinly traded and can swing wildly in price. If you are trying to fund real hardware or pay real salaries, that volatility is a serious problem. Stablecoins help, but then you are adding an extra conversion layer and liquidity risk.
Valuing real world collateral. If you are lending against tokenized green bonds or carbon credits, someone has to price and verify those assets. That brings in registries, auditors, oracles, and all the complexity and trust assumptions we try to avoid by using blockchains in the first place. We touched on this in the Day 42 regenerative stablecoins piece, and it applies here too.
Regulatory gray zones. The moment DeFi starts touching real world assets, real world infrastructure, or anything that looks like securities or commodities, regulators get interested. That can mean KYC, accredited investor requirements, licensing, or outright bans in some jurisdictions. A lot of the "permissionless" story breaks down when you cross that line.
Incentive misalignment. Just because you can route DeFi capital into a DePIN or ReFi project does not mean the incentives are healthy. You can easily end up with ponzi like tokenomics, mercenary liquidity that disappears when yields drop, or systems that optimize for token price instead of actual impact or infrastructure quality. Good mechanism design is hard, and most projects will get it wrong.
So I am not saying "DeFi plus physical world equals problem solved." I am saying this is an interesting design space with real potential and real traps, and as a builder or learner, it is worth understanding both sides.
How I am filing this in my Day 44 mental map
By now my mental model of Web3 has a few clear layers. At the bottom you have blockchains, consensus, and the infrastructure we covered early in the series like nodes, RPCs, and indexers. On top of that you have the financial layer, which includes DeFi protocols, stablecoins, and RWAs. Then you have the identity and trust layer with things like ENS, soulbound tokens, and zero knowledge proofs. And now there is a physical infrastructure layer, DePIN, where tokens coordinate real world networks.
This piece is about the interfaces between those layers. Specifically, how the financial layer, DeFi, starts to route capital and liquidity into the physical and impact layers. That interface is still messy, experimental, and full of unsolved problems, but it feels like one of the more important areas to watch and understand as Web3 matures.
If you have been following since the early days of this series, you have probably noticed that I keep circling back to a few big questions. What does Web3 actually do in the real world? Where does trust come from when you cannot trust a central party? How do incentives shape behavior, and how do you design systems that do not just extract value but create it? This DeFi meets physical world layer is where a lot of those questions collide, and I am still figuring out what good answers look like.
Resources
Here are a few pieces that helped me connect these dots between DeFi, RWAs, DePIN, and regenerative finance.
What Are Real World Assets (RWAs) in Crypto? – Kraken
The Convergence of DeFi and Real World Assets – Cointelegraph
How DePIN Projects Are Bridging Crypto and Physical Infrastructure – Decrypt
Regenerative Finance: The Next Evolution of DeFi – The Defiant
If you know other good explainers, research pieces, or live examples of projects doing this well, feel free to share them.
If you are on a similar Web3 learning path
This note is part of my public 60 Days of Web3 journey, one concept per day, explained in human terms, with all the confusion and course corrections left in. You can read the full journey on Medium, follow on Future at Ribhav on Future, and join the community on Telegram at Web3ForHumans.
If something here feels off, incomplete, or sparks an idea, reply, quote it, or write your own version. I am learning in public so you do not have to do it alone.
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