Parametric Vineyard Insurance

Issues + Augmented Future

Wine farmers are at the mercy of the weather and face the risk of their vineyard/grapes not producing adequate/ideal yields, sugar concentration, and organoleptic qualities (appearance (clearness and color), aroma (purity, intensity and quality), purity, intensity, durability, taste quality). Weather has to be perfect for the grapes.  Humidity, rain, sunlight, and temperature must be within certain thresholds, frosts absent. Rainfall has an important influence on yields during the flowering-ripening period and on sugar concentrations and the organoleptic qualities of wines at harvest time. Ripening requires plenty of warmth and very little water. The vines must have the water they need, but no more than that. Meteomatics reveals the weather events that have contributed to the low production yields across the world’s major wine-producing areas in France and Italy. 

Different climates for growing grapes will have different parameters that need to be met for the crop/insurance policy E.g. at temperatures below 10°C and above 35°C, photosynthesis will be disrupted and vines will not grow properly. In France, average temperatures during a vine’s growth cycle vary from 13°C on the vineyards of Alsace to 18.3°C on the vineyards of the southern Rhône Valley. The planting make-up or choice of grape variety (early or late) will therefore depend on the local climate and the level of ripeness needed to produce different types of wine. French vineyards are classified by climatic areas (cool, temperate, warm) and grape varieties chosen according to the conditions they need to ripen adequately.


Different grapes grow best in different zones


A study by Zion Market Research found that the global wine market was worth $302 billion in 2017 and is predicted to grow to $423.59 billion by the end of 2023.California produces ~85% of wine in the US. An estimated retail value in 2021 of $44B

Grape Insurance Map US


Insurer gets the premium, policyholder gets money if contract is triggered, and the insurer will provide collateral in return of guarantee of payment to insured. If nothing is claimed, we return the collateral to insurer. The protocol can earn fees by lending collateral on aave
It will not be pool based . There will be choice for anyone to provide insurance for a particular case. The protocol acts as an intermediary holding collateral and earning interest and facilitating payments


1. The client interested applies for insurance. They provide the parameters of the contract: The insurance period (start date and end date), Geographical area, Amount to cover
2. A premium is computed based on geographical risk factors and the amount to cover.
3. The client interested accepts the terms of the policy, and now they are a policyholder. The policy has an initial status of CREATED but is still not active until other insurers are willing to cover the insured amount. In terms of the smart contract, the user will approve X amount of USDC (or other crypto) to the contract where X = premium * months of the insurance period.
4. A potential insurer sees the CREATED policy and applies to cover all or a percentage of the insured amount. The amount is transferred from the potential insurer’s wallet to the smart contract and assigned to the policy.
5. If there aren’t enough funds to cover the insurance by the time the specified insurance period starts, it will transition to an UNFULFILLED status.
6. When there are enough funds assigned to the policy to cover the amount, the status of the policy will be ACTIVE. The insurers’ funds will be locked in the contract until the event happens or the policy expires.

7. When the funds get locked, the smart contract will convert the funds to interest-bearing tokens in Aave. The interest generated by these tokens will serve as revenue to the protocol.
8. Every month the smart contract will charge the premium to the user directly from their wallet. If the smart contract cannot charge the premium, it will unlock the funds, return them to the respective insurers and transition the state of the policy to TERMINATED (this is not ideal behavior, but okay for an initial version)
9. If the event happens, the policyholder can claim the collateral. If the smart contract determines the event has occurred, it will send the locked funds to the policyholder, and the policy transitions to a CLAIMED status.
10. If the policy expires and the event hasn’t happened, the funds get unlocked and returned to the respective insurers, and the policy will transition to an EXPIRED status.


In our Chainlink Hackathon prototype, our application is only monitoring the temperature (the most important data) of a given location (no sunlight, humidity, rain, etc.) We take the daily temperatures and add them together. By the end of the 6-7 month coverage period, the temperatures must fall into the range of lower than 2200 or greater than 2700, if the temperature does not fall within the range, the contracts claim processing occurs

Chainlink Spring Hackathon 2022