Farmers are likely the hardest hit by weather unpredictability. For many, severe weather conditions can lead to the loss of their livelihood, or even starvation. Although farmer insurance has been around for decades — if not centuries — according to Jha, it is unaffordable for the vast majority:
“If you had less than two hundred thousand dollars in premium to spend, you actually had no real access.”
Arbol blockchain infrastructure. Source: Arbol.
Jha claims that Arbol both lowers the entry barrier and makes hedging less expensive. With blockchain, settlements and payouts can be instant, whereas in the centralized world, participants may have to wait weeks, if not months.
Farmers can hedge against various adverse weather conditions having a negative impact on their crops. They can buy a hedge — for example, if a temperature in their region reaches a critical level, which will trigger an automatic payout. By adding Chainlink’s oracalized weather data feeds, the company’s platform has become more decentralized and resilient.