The Lemonade Foundation, the nonprofit founded by Lemonade, is to offer climate insurance to protect subsistence farmers via its Crypto Climate Coalition.
The coalition is being constituted as a Decentralized Autonomous Organization (DAO), dedicated to building and distributing at-cost, instantaneous, parametric weather insurance to subsistence farmers and livestock keepers in emerging markets.
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 with ease from their phone using global stablecoins or local currencies, much as they do for banking and payments today. 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 DAO’s liquidity pool. The DAO will also issue a governance token to reward participation by the broader community.
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, said “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.
“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.”
Alongside the Lemonade Foundation, founding coalition members include Avalanche, Chainlink, DAOstack, Etherisc, Hannover Re, Pula, and Tomorrow.io.
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