One who can’t achieve his goals; cannot win
Pranaam. We are looking to the future as we consider the past. For the last few years, we have been building a series of artificial intelligence products to solve challenges in the traditional insurance industry. We’ve established important industry relationships and entered into agreements with some of the world’s largest carriers. Yet, each step forward has caused us to reflect on the billions of underserved who need insurance to achieve their goals. Enter Pana DAO.
What Is the Problem?
Insurance requires capital and today’s wealth is built upon asset ownership. Further, those who hold the capital are incentivized by today’s securities laws to provide their wealth to opportunities that have the highest growth potential. Because providing insurance to micro/small businesses and individuals is considered low margin, there is a strong disincentive to go down market. This means today’s insurance does not democratically serve those who need it most. To make things worse, as inflation increases globally, the poorest do not have a way to park their cash in assets and potentially mitigate the effects of inflation. Inflation accelerates their path deeper into poverty.
How Are We Solving This?
Through the lens of crypto and digitalization, we are taking a fresh view of insurance — we are experiencing a Lloyd’s Coffee House moment.
What if low margin was viewed as a major opportunity? What if there was a radically different system we could leverage? We brainstormed from that angle and landed on the merger of DeFi and insurance; what we are calling Democratized Insurance. With the recent emergence of Protocol Owned Liquidity (POL), sustainable stablecoins and the popularity of NFTs, we believe this has created a confluence of technologies that can be leveraged to offer a product suite that is only solved with crypto and digitalization. Even better, we can now construct an asset that provides insurance-like benefits that is fully transparent, asset-backed and governed by a global community — while leveraging aspects of the time-tested model of syndicates to unlock these opportunities.
The Background Story
NeuralMetrics launched in 2017 with the idea that AI and machine learning could enable commercially viable insurance to micro and small businesses. We launched our products in the United States in order to leverage the extensive insurance industry located there — we believed this would enable us to get our footing. We’ve since established engagements with some of the world’s largest carriers, who have been fantastic partners — they are unequivocal leaders.
But the overall industry pace can be slow at times leading to an unclear path to extend beyond borders and address those most underserved by today’s focus on safeguarding wealth for the prosperous. While we wholly support the service of prosperity and deeply respect the entrepreneurs of the past and present, we want to help the entrepreneurs trapped in the present without a path forward. Entrepreneurism requires taking risks and without insurance, one mistake results in catastrophe for those less privileged.
With these realizations, we concluded that we needed to turn to a decentralized economy where the pace of innovation was only as slow as the inventor’s imagination and capital was available for organizations that provided meaningful service to their communities and the majority of those involved were bullish on humanity’s ability to collaborate and solve the world’s biggest problems.
How It Works
Phase one of the Pana protocol is focused on building a treasury that can be leveraged to support a product that we call, Assurance NFTs. Assurance NFTs are a triple-point asset with complex valuations. NFTs are important for several reasons, one of which is our mission to serve the underserved by providing assets with the hope of enabling wealth creation for the least privileged. People who do not understand crypto still connect with imagery and understand that visible digital assets have tangible value. This forms a critical abstraction atop an otherwise hard to understand DeFi protocol.
Our use of Assurance NFTs is founded on the design of our governance token, Karsha. We will dive deeper into Assurance NFTs in the future (they are part of phase two), including more detail on why we call them triple-point assets.
With phase one, we are launching a governance token called Karsha, the name being lifted from the history books related to the great Maurya Empire a few millennia ago. At that time, KarshaPana coins were issued by merchants and bankers rather than the state. This innovative currency created a thriving trade economy, enriching the masses and growing the Maurya Empire to its height along with subsequent dynasties in the Indian subcontinent.
In our Pana economy, Karsha can be purchased via bonds. Bonding enables us to accumulate a treasury and in return, our governance token behaves like an exchange asset. All Karsha coins use a rebasing mechanism similar to that pioneered by Olympus DAO. This mechanism is an important piece of architecture for phase two when we launch multiple Assurance NFT collections.
Keep in mind that our mission is to serve the underserved, so Pana utilizes a layer two (L2) network as opposed to Ethereum mainnet. This facilitates ultra-low-cost transactions, which enables the least privileged to transact with the blockchain while still enabling the wealthiest to benefit from Ethereum’s network effects, interoperability and decentralized security. But let me emphasize, we crucially exist to serve all citizens of the world and our syndicate model has significant wealth creation potential.
Pana DAO is wholly separate from NeuralMetrics. But we are proud that we have received working capital from NeuralMetrics Capital, a separate investment entity. Pana DAO provides a rare opportunity for crypto to successfully move into the insurance industry by solving one of the most difficult types of insurance — parametric insurance. We believe this type of insurance fits nicely in the DeFi universe in a way that is profitable for all parties.
The role of the DAO is to facilitate the use of the treasury to first manage market liquidity for Pana and Karsha, which will see high volatility during parametric events. Second, by increasing the range of Assurance NFT offerings while simultaneously moving into OTP/M-Pesa/SMS type engagements in Southeast Asia, the Middle East and Africa and other payment rails globally that can provide the most basic access to democratized insurance. By developing the Pana protocol to be transparent and asset focused, we aim to create a level of trust afforded blockchain solutions that cannot be matched by today’s opaque insurance offerings — most of which are neither an asset nor a direct accumulation of value for the end customer, which are the key differentiators afforded Assurance NFTs. Additionally, our team has successfully built several real-world, global solutions and has experience in the insurance industry. This helps us confidently chart a long-term, sustainable roadmap.
Lastly, a key design philosophy for Assurance NFTs is to build them for composability, enabling a B2B ecosystem that provides insurance not only to brick-and-mortar institutions but also fully digital ones. Over time, we expect our B2B engagements to evolve into programmable syndicate models sustained by disaggregated treasuries. In a democratized environment, everyone should benefit — there are no permissioned walls in the Pana economy.
Seed Contributors and Mentors
We are proud to have raised private seed funding for Pana DAO. This generous infusion of capital empowers us to reach our goal of providing the first tranche of Assurance NFTs and compensate our builders and contributors to the Pana DAO. We thankfully make a special call out to:
· NeuralMetrics Capital
· Dharmendra Vasant
· Marcus Daley
· And Many Other Insurance Mentors and Advisors
Watch for additional Medium articles as we continue development of phase one. We appreciate your support and look forward to democratizing insurance together — with you.
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A Humble Mission to Serve the Underserved. A Bold Goal to Provide Insurance to Everyone.