Lemonade’s non-profit division has launched a coalition focused on creating a blockchain-based climate insurance solution for smallholder farmers and livestock keepers in developing regions.
The Lemonade Crypto Climate Coalition, structured as a Decentralized Autonomous Organization (DAO), aims to provide affordable, instantaneous parametric weather insurance for vulnerable agricultural communities. This initiative includes collaboration with a diverse range of partners, such as Avalanche, Chainlink, DAOstack, Etherisc, Hannover Re, Pula, and Tomorrow.io.
Designed as a decentralized application (dApp) on the eco-friendly Avalanche blockchain, the insurance will be denominated in stablecoins, allowing farmers to make and receive payments using either global stablecoins or local currencies via their mobile devices. The coalition plans to roll out this service in Africa within the year.
The Lemonade Foundation will initially underwrite the DAO’s smart contracts, and over time, cryptocurrency investors will have the opportunity to contribute to the liquidity pool. Additionally, the DAO will introduce a governance token to engage and reward community participation.
Daniel Schreiber, director of the Lemonade Foundation, expressed, “Using a DAO rather than a conventional insurance company, implementing smart contracts instead of traditional policies, and relying on oracles instead of claims professionals will allow us to harness the collaborative and decentralized nature of Web3. This enables us to deliver affordable and immediate climate insurance to those who need it most.”