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Building A Global Framework For Decentralized Insurance

Etherisc is an open-source, decentralized insurance protocol for building blockchain-based insurance products that self-execute using highly reliable data from Chainlink oracles. Because these products don’t require access to centralized providers, they’re democratizing insurance for people in developing nations.

Last year, Etherisc integrated Chainlink Data Feeds to launch its blockchain-based flight insurance product, FlightDelay, which autonomously issues policies and executes payouts for travelers experiencing flight delays or cancellations. In an interview with Chainlink Today, Etherisc cofounder Christoph Mussenbrock said FlightDelay is just one of many useful applications of Etherisc’s generic insurance framework (GIF) combined with Chainlink oracles.

“Chainlink oracles guarantee data availability, authenticity, and integrity – three main pillars of our solution which benefit all stakeholders, be it customers, product owners, or investors in risk pools,” he said. 

Recently, Etherisc integrated Chainlink on Polygon to power the world’s first on-chain carbon offsets insurance product. Using Floodlight’s geospatial weather data, delivered on-chain via Chainlink, insurance smart contracts can determine when a policy’s conditions are met and claims are paid out to projects like the Coorest platform’s NFTrees initiative.

At SmartCon 2022, Mussenbrock presented a history of decentralized insurance, examined the industry’s current challenges, and offered a blueprint for delivering decentralized insurance solutions at global scale in the future.  

“Decentralized insurance is not about a single product, but about an ecosystem of many people, many projects which are working on insurance products and which use a common platform,” he said, drawing a comparison to the growth of decentralized finance (DeFi) using common infrastructure like Chainlink’s oracle network.

One of the most compelling use cases for insurance smart contracts is crop insurance for farmers in emerging economies without access to traditional providers. In 2020, Etherisc integrated Chainlink to deliver parametric crop insurance to small farms in Kenya

The next step, Mussenbrock explained, is scaling Etherisc’s solution beyond this initial group of 25,000 policyholders to hundreds of thousands of farmers with the ultimate goal of making parametric crop insurance accessible to an estimated 600 million smallholder farmers who collectively produce about a third of the world’s food.   

“This is of course a huge market and very promising and maybe blockchain is the only way to approach these farmers and these target groups,” Mussenbrock said.

Doing so means refining Etherisc’s GIF so that it’s faster, cheaper, more flexible, and easier to integrate. Current and future initiatives include utilizing gasless transactions that reduce costs by up to 90% and enable 10x higher throughput, stacking risk pools to improve capital efficiency, and creating a one-click installation process that allows developers to launch new GIF instances quickly and securely.

Mussenbrock envisioned a future where developers can use Etherisc’s GIF as a template for launching no-code insurance solutions:

“Interested teams do not need to code a smart contract; they just need to take the template, change some parameters, maybe add a data source and an oracle, and then they will be able to deploy it and have an audited system without ever coding a single line.”

To learn more about Etherisc, visit their website, Twitter, Telegram, and Medium.

Watch Christoph Mussenbrock’s full presentation at SmartCon 2022.

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