according to the materials from the website - By Cryptopolitan_News
Ripple has completed a blockchain-based drought insurance pilot program in Kenya aimed at assisting hundreds of livestock herders in Laikipia County through smart contracts. This initiative was part of Ripple Impact's mission to use blockchain for social good.
The pilot program, launched in April, was implemented in partnership with Mercy Corps Social Venture and the charity DIVA Donate. Ripple tested a data-driven drought insurance model based on RLUSD—the company’s stablecoin pegged to the dollar and hosted on Ethereum.
According to the latest updates, the testing concluded without any payouts, but the donated funds were reserved for future support of drought victims in RLUSD. How the drought insurance program worked.
The program involved 517 livestock herders, 70% of whom were women living in northern Laikipia, a region often affected by irregular rainfall and vegetation stress.
The model used satellite data on the normalized difference vegetation index (NDVI) to assess the intensity of drought in Laikipia County. If by the end of May, when NDVI values typically peak, the vegetation level fell below predetermined thresholds, participants automatically received compensation in RLUSD.
The insurance utilized smart contracts to automate payouts upon meeting certain conditions outlined in the NDVI reading guide. Participants receive full payouts if the vegetation state drops below 0.55.
A linear scale defined values between 0.55 and 0.61. If the NDVI reading was 0.57, beneficiaries received approximately 67% of the available funds. As in the current cycle, payouts are not made if the NDVI index exceeds 0.61.
Laikipia experienced vegetation stress from 2014 to 2019, as well as in 2022 when residents were unable to feed their livestock for months. In 2023, the drought was initially tolerable from June to July, but due to scant rainfall, the vegetation condition deteriorated from August to October.
However, satellite observations during the pilot period indicated favorable conditions for vegetation growth, and no payouts were made.
Funds allocated for the pilot project in RLUSD will be used during the next high-risk drought period, which is expected later this year. Ripple will redistribute resources and prepare for any climate changes.
According to a company blog announcing the program in April, Ripple's support helped the project increase its fundraising target to $40,000 to insure 533 livestock herders at $75 each against future droughts. This amount was deemed sufficient to sustain one livestock unit for six months for communities whose livelihoods depend on herding.
According to the National Drought Management Authority (NDMA), 23 counties will continue to face severe drought-related challenges, and millions of people are at risk of hunger. The NDMA report states that 15 counties are in a 'normal' state, while eight are at 'emergency' levels.
"In many counties, the situation has worsened, although most are showing a declining trend," said an NDMA representative.
Expansion of RLUSD's presence in the global market
The market capitalization of the Ripple stablecoin exceeded $500 million just seven months after its launch, allowing it to enter the ranks of the 110 largest crypto assets in the world.
On July 8, the circulating supply of RLUSD tokens surpassed 501 million, and its market value reached around $501 million, according to CoinGecko data.
As reported by Cryptopolitan last Wednesday, Ripple appointed Bank of New York Mellon as the custodian of the US dollars and treasury bills backing its stablecoin. BNY Mellon, which manages assets worth about $52 trillion, will oversee the reserves and support liquidity maintenance operations for RLUSD.
