Cerchia Revolutionizes the Parametric Insurance Market with Milestone Bilateral Transaction on Avalanche
Cerchia's decentralized marketplace facilitates the first digital peer-to-peer insurance risk trade utilizing Backed’s yield-bearing tokens as collateral–all powered by the Avalanche blockchain.
Blockchain enabled fintech platform Cerchia has achieved a groundbreaking milestone in the parametric insurance space. For the first time, an insurance buyer directly sourced protection–specifically from losses associated with Florida storms – from an institutional investor; Cerchia’s Direct Risk Transfer (DRT™) marketplace enabled the buyer to bypass traditional middlemen and secure a more cost effective solution. This transaction marks a significant step forward in the industry’s work to improve upon legacy infrastructure and institutional workflows using blockchain rails, decentralized applications, and tokenization – a concept known as on-chain finance (OnFi).
Through smart contract technology on the Avalanche blockchain, Cerchia enables automated, transparent, and instantly settled parametric event risk payouts. All required collateral is deposited in a segregated and audited smart contract, i.e., an automated escrow account, which is only released if a predetermined trigger event occurs or transaction maturity is reached, eliminating counterparty credit risk and allowing for immediate settlement.
Importantly, funds will accrue yield while held in escrow. Rather than non-yield bearing stablecoins, this inaugural transaction used tokenized US Treasury bill ETFs, issued by Backed, as the settlement currency. This innovative approach raises the bar for escrow mechanisms in both the traditional and digital arenas.
Cerchia’s DRT™ redefines traditional risk transfer methods with greater transparency and efficiency, while Backed’s composable yield-bearing fixed-income product adds greater utility to the platform’s on-chain collateral. Finally, Avalanche’s fast, secure, and scalable blockchain infrastructure underpins the rapidly growing innovation and institutional focus in driving forward OnFi.
Transaction details;
https://snowtrace.io/tx/0xe273066d1f3bf33cb520fa02fe91446b2a0eb8bed4902d3fdaee55cf84944706
For media inquiries, please contact:
contact@cerchia.io
About Avalanche
Avalanche is a smart contracts platform built to scale infinitely and finalize transactions in under a second. Its novel consensus protocol, Subnet infrastructure, and HyperSDK toolkit enable businesses to easily launch powerful, custom blockchain solutions. Build anything you want, any way you want, on the eco-friendly blockchain designed for both Web3 devs and businesses.
About Backed:
Backed issues freely transferable tokenized securities that track the value of RWAs such as Stocks, or ETFs, powering a new age of decentralized finance applications. Such tokens can be used as collateral for decentralized finance applications such as Cerchia’s DRT™.
About Cerchia:
Cerchia is a pioneering provider of decentralized risk transfer solutions, dedicated to reducing the global protection gap. Their DRT™ marketplace allows buyers and sellers to transfer risk securely and transparently. With its standardization of risk, DRTTM makes protection affordable and accessible.
Foto: REUTERS/Marco Bello