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The Role of Web3 in Circular Economy: Enabling Transparent Supply Chains and Incentivizing Sustainable Practices

In recent years, the need for a more sustainable and environmentally friendly economic system has become increasingly apparent. The circular economy, an economic model focused on eliminating waste and the continual use of resources, presents a promising solution. Web3 technologies, such as blockchain and smart contracts, have emerged as powerful tools to facilitate the transition towards a circular economy. This article aims to provide a comprehensive overview of how Web3 can enable transparent supply chains, efficient resource management, and incentivize sustainable practices, even for those who are not familiar with Web3 technologies.

Web3, also known as the decentralized web, is the next generation of the internet, built on blockchain technology. Unlike the current centralized web (Web2), where data is controlled by a few large corporations, Web3 aims to create a decentralized network where users have control over their data and can interact directly with one another without intermediaries.

Blockchain technology, the backbone of Web3, is a decentralized digital ledger that records transactions across a network of computers. These transactions are secure, transparent, and tamper-proof, making blockchain an ideal tool for various applications, including supply chain management and sustainable practices.

Transparent Supply Chains

One of the primary challenges in creating a circular economy is the lack of transparency in supply chains. Consumers and businesses often struggle to obtain accurate information about the origin, composition, and journey of products, making it difficult to make informed decisions about their purchases.

Blockchain technology can significantly enhance supply chain transparency by creating an immutable, tamper-proof record of transactions. This allows for easier tracking of products from raw materials to finished goods, ensuring that materials are sourced responsibly and that products are manufactured sustainably.

For example, Circularise is a platform that utilizes blockchain technology to trace the origin and journey of products, ensuring ethical and sustainable practices throughout the supply chain. By providing manufacturers and recyclers with secure and traceable material passports, Circularise enables companies to share and request data along their supply chains without compromising on privacy or intellectual property.

Efficient Resource Management

Web3 technologies can also improve resource management by facilitating the tracking and tracing of materials, components, and products throughout their lifecycle. This can help identify opportunities for reuse, repair, and recycling, thereby reducing waste and minimizing the need for new resources.

The Ellen MacArthur Foundation’s report, “Completing the Picture: How the Circular Economy Tackles Climate Change,” highlights the potential of blockchain technology in resource management: “Blockchain can enable more efficient and accurate tracking of materials, components, and products, allowing for better resource management and facilitating the transition to a circular economy.”

Incentivizing Sustainable Practices

Smart contracts, self-executing contracts with the terms of the agreement directly written into code, can be used to incentivize sustainable practices in the circular economy. By automating the enforcement and execution of contracts, smart contracts can streamline the process of rewarding businesses and individuals for adopting sustainable practices.

One example of incentivizing sustainable practices through Web3 technologies is the Circularise platform itself. In addition to providing traceability for materials, Circularise also offers a reward system for companies that actively engage in sustainable practices. By participating in the Circularise network, companies can earn tokens that can be used to access premium features or traded for other benefits.

Another example is the Winding Tree platform, which aims to disrupt the travel industry by creating a decentralized marketplace for travel services. By using blockchain technology, Winding Tree enables direct connections between service providers and consumers, reducing intermediary fees and promoting more sustainable travel options.

Web3 technologies, such as blockchain and smart contracts, have the potential to play a significant role in facilitating the transition towards a circular economy. By enabling transparent supply chains, efficient resource management, and incentivizing sustainable practices, these technologies can help create a more sustainable and equitable economic system.

As the World Economic Forum’s report, “Harnessing Blockchain for the Circular Economy,” states: “Blockchain technology has the potential to unlock new circular economy business models and value chains that are more transparent, secure, and efficient.” By leveraging these technologies, we can accelerate the shift towards a circular economy and build a more sustainable future.


  1. Circularise:
  2. Ellen MacArthur Foundation: “Completing the Picture: How the Circular Economy Tackles Climate Change” (
  3. Winding Tree:
  4. World Economic Forum: “Harnessing Blockchain for the Circular Economy” (

Written by Lorena Billi

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