From promise to practice: Decentralization in ReFi transaction networks and on-chain carbon credit retirement

Regenerative Finance (ReFi) is a Web3 ecosystem for tokenizing, trading, and retiring voluntary carbon credits on blockchain. Yet whether these networks are truly decentralized, and whether such decentralization predicts future on-chain carbon credit retirement, remains unclear. Using daily ERC-20 transfer records for Toucan Protocol’s BCT and KlimaDAO’s KLIMA tokens on Polygon from June 1, 2022, to August 31, 2025, we develop a composite framework for measuring transaction-network decentralization across participation, flow, structure, and temporal persistence. We further examine whether the level of decentralization predicts future on-chain retirement, measured by retired amount, retirement count, and retirement participants. We find that ReFi transaction networks do not fully realize their decentralization promise, instead mostly exhibiting significant core–periphery structure and lower decentralization than benchmark DeFi protocols such as Uniswap and Aave. Within ReFi, KlimaDAO exhibits a more decentralized transaction network than Toucan Protocol, with its composite index exceeding Toucan’s by 0.74 pooled standard deviations on average, mainly through broader participation, more dispersed value flows, and higher structural decentralization. Moreover, higher decentralization is associated with stronger future cumulative on-chain retirement, mainly in retirement count for Toucan Protocol and in both retired amount and retirement count for KlimaDAO, consistent with Toucan’s infrastructure-layer and KlimaDAO’s application-layer settings. These findings suggest that transaction-network decentralization is central to evaluating whether ReFi markets translate tokenization into actual carbon-credit use.