The non-profit arm of insurance unicorn Lemonade has formed a coalition building a blockchain-based climate insurance offering for subsistence farmers and livestock keepers in developing markets.
The Lemonade Crypto Climate Coalition, constituted as a Decentralized Autonomous Organization (DAO), is aiming to build and distribute at cost instantaneous, parametric weather insurance for the world's most vulnerable farmers. Avalanche, Chainlink, DAOstack, Etherisc, Hannover Re, Pula, and Tomorrow.io are joining Lemonade as coalition members.
The climate insurance will be architected as a stablecoin-denominated, decentralised application (dApp) on Avalanche, an eco-friendly proof-of-stake blockchain. Farmers will be able to make and receive payments from their phone using global stablecoins or local currencies. An initial rollout in Africa is expected within the year.
The Lemonade Foundation will provide the initial capital to backstop the DAO’s smart contracts, and in time all crypto investors will be able to fund the liquidity pool. The DAO will also issue a governance token to reward participation by the broader community.
Daniel Schreiber, director, Lemonade Foundation, says: “By using a DAO instead of a traditional insurance company, smart contracts instead of insurance policies, and oracles instead of claims professionals, we expect to harness the communal and decentralised aspects of web3 and real-time weather data to deliver affordable and instantaneous climate insurance to the people who need it most.”