Insurtech firm Lemonade has announced the launch of the Lemonade Crypto Climate Coalition, which will offer climate insurance to the world’s most vulnerable farmers.
The climate insurance will be architected as a stable coin-denominated, decentralised application (dApp) on Avalanche – an eco-friendly proof-of-stake blockchain. This will allow farmers to make and receive payments with ease from their mobile phones by using global stable coins and local currencies.
This new service is being launched through Lemonades non-profit foundation – The Lemonade Foundation which promotes the use of AI, data and software to build socially impactful products and programs.
The coalition is being constituted as a Decentralised Autonomous Organisation (DAO), dedicated to building and distributing at-cost, instantaneous, parametric weather insurance to subsistence farmers and livestock keepers in emerging markets.
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 DAO’s liquidity pool. The DAO will also issue a governance token to reward participation by the broader community.
Alongside the Lemonade Foundation, founding coalition members include Hannover Re, Avalanche, DAOstack, Chainlink, Etherisc, Pula, and Tomorrow.io.
Director of the Lemonade Foundation, Daniel Schreiber said: “The Lemonade Foundation was established to build exponentially-impactful technologies. “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 decentralized aspects of web3 and real-time weather data to deliver affordable and instantaneous climate insurance to the people who need it most.”
An initial rollout of the coalition in Africa is expected within the year.
“Africa has an estimated 300 million smallholder farmers. The majority face real climate risks to their livelihoods, as traditional, indemnity-based insurance is often unaffordable or unavailable to them,” said Rose Goslinga, co-founder of Pula, a Kenya-based insurtech that specializes in digital and agricultural insurance to de-risk millions of smallholder farmers across Africa.”
She continues: “This is where the power of the Lemonade Crypto Climate Coalition comes in: An on-chain solution that can be immediately impactful at scale will allow farmers to finally get financially protected against the increasingly frequent risks such as drought.”
Addressing the coalition, Sergey Nazarov, co-founder of Chainlink, the market-leading blockchain oracle said: “We’ve been helping developers and institutions usher in a new age of economic fairness and transparency with web3. The Lemonade Crypto Climate Coalition is a prime example of how innovative solutions built on the blockchain can drive global financial inclusion previously unavailable.
“We plan to make the Chainlink team and platform available to L3C in an effort to protect the millions of farmers who depend on what they grow from the devastation of climate change.”
The Lemonade Crypto Climate Coalition will be presented at the Avalanche Summit on March 23, 2022.