CHARLI3 FIDA HOWDEN: Automated Parametric Insurance using Cardano blockchain

[GENERAL] Name and surname of main applicant

Robert Hever

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

10

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

Fida will build a Parametric Insurance platform for Howden on Cardano, automating policy processing and payments, with Charli3 Oracles providing data to eliminate manual verification steps.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

Yes

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

This is a joint venture between 3 entities with Charli3 Oracles taking the Lead on delivering the project.

https://www.howdengroupholdings.com/about-us The largest European broker, serving clients all over the world. Howden began in 1994, as just three people and a dog. Now there are 18,000 of us, and we're a leading global insurance group, managing $38bn of premiums for our clients. 

Howden Group will be providing Parametric Insurance policies that will settle on the blockchain. In addition, the Howden Group may provide the coverage for settling (paying out) those policies. This may require moving liquidity into one of Cardano’s stablecoins.

Howden Group’s blockchain division is the lead on this project. They will direct the architectural design, compliance and regulatory requirements, and ultimate deliverables for this project. This is a project to showcase to Howden the capabilities of Cardano and to entice them to move their billion dollar operation onto the chain.

CHARLI3 ORACLES:

Charli3 Oracles is the first decentralized enshrined oracle solution on Cardano. The first live data feeds on mainnet launched in 2022. We specialize in delivering real world data onto the Cardano blockchain to be used as input in Decentralized Applications. 

15,000+ hours of continuous Ecosystem uptime (100% uptime)

30,000+ successful updates on-chain

125,000+ successful node updates on-chain

4 distinct alert and monitoring systems to catch issues before they happen

Partially Open-Sourced

Want to understand how Charli3 works? Click here to view a short video

View our active feeds: portal.charli3.io

Charli3 will be responsible for identifying data sources and building a real-time data collection solution specifically for this project. This will involve taking our current architecture (either pull or push based oracle systems) and adapting it. The data will become the inputs for triggering parametric insurance policies. 

FIDA FINANCE: A revolutionary Cardano based decentralized insurance protocol that allows investors to earn yield by providing coverage for insurance policies. 

The FIDA team will work with the other two partners to create a policy database, configure smart contracts to automate the insurance claims process, and execute timely payments. The data from Charli3’s data collection system will become input for the risk transfer back end or Automated Claims System that Fida will build. Fida will write all the custom smart contracts to enable the transfer and distribution of risk from the insured to Howden's systems. Having this fully expressed on-chain.

Fida Finance will also create a front end UI/UX for customers purchasing insurance policies. Fida will create a full service front end for customers to view, purchase, claim, and manage policies.

[GENERAL] Will your project’s output/s be fully open source?

No

[GENERAL] Please provide here more information on the open source status of your project outputs

This will be a closed source project to protect the IP of all parties involved. There are strict compliance and regulatory standards for customer and insurance data; for this reason alone most, if not all, code developed during this project will be closed source to maintain compliance.

[METADATA] Horizons

Financial Services

[SOLUTION] Please describe your proposed solution

SUMMARY

The goal of this project is to develop a working proof of concept (POC) for an automated parametric insurance solution integrated with the Cardano blockchain.

The POC will use real insurance policies from Howden Group. Charli3 Oracles will design and build a Parametric Insurance Data Verification System that leverages Charli3’s current oracle architecture. 

Fida Finance will design and build a Risk Transfer Platform to a) automate the claims approval process, b) automate the payout process with payments made in ADA, c) enable mock customers to receive mock payouts for real policies. 

The goal of this project is to showcase the technical capabilities of Cardano and present a working end-to-end solution for a real use-case (likely policies for Argentine Farmers in the wine region of Mendoza). Howden's blockchain division will present the POC to the broader Howden Group leadership team to convince them to move operations along with billions of dollars onto Cardano to launch the project output with live customers.

The output of this project will be a ready to go live with real customers POC optimized for a specific use-case and configured to support real policies.

Given the magnitude of this project, we’ve broken this solution section down into several parts to aid the reader in understanding the solution in relation to the context and problems it is meant to solve. 

TABLE OF CONTENTS

S1 Context

• What is Parametric Insurance?
• Definition
• Traditional vs. Parametric
• Examples and use-cases

S2 The Problem

• What are the challenges with Parametric Insurance?

S3 The Solution

• Technical components:
• 1 Database of Policies
• 2 Parametric Insurance Data Collection System (PIDC) by Charli3 Oracles
• 3 Risk Transfer Platform by Fida Finance

S4 Project Output

• Final Project Output
• Demonstration of functionality using mock data
• System ready to go live with real use-case
• How does Cardano and enshrined Charli3 Oracle Networks solve those challenges of executing Parametric Insurance?

S5 Post-Project Paths

• Live Customers
• Coverage on-chain
• Fiat Ramps
• Definition of Success

S6 Closing Note

• The Benefits of smart contracts and Blockchain Oracles in Parametric Insurance

S1 CONTEXT

What is Parametric Insurance?

Parametric Insurance is an innovative new product offering in the insurance industry with the goal of eliminating multiple pain points of traditional insurance products. The execution of Parametric Insurance can be significantly improved by adopting smart contract functionality and the use of blockchain oracles for data verification. But, for those that are new to the insurance industry let’s take a moment to understand Parametric Insurance. 

“Parametric Insurance is a non-traditional insurance product that involves specific trigger events that offer pre-specified payouts based upon a trigger event” (Read more about parametric insurance here: wikipedia). 

Let’s discuss a few different use-cases to understand the difference between Parametric and traditional insurance using the above infographic. Parametric insurance is not specific to a particular area (e.g. natural disasters) it can apply to any specific event that can be determined by exact data. 

For a travel example, if a flight is delayed with traditional insurance a policyholder would need to submit a claim and go through the lengthy process of getting it approved. With a parametric policy, the policyholder agrees to a specific trigger event (flight is delayed 2 hours or more) then they will receive $1,000. The idea is that when the departure time is known to be above 2 hours, a claim is automatically processed and payment is made directly to the policyholder.

For a climate risk example, an earthquake of magnitude 5.0 hits next to a policyholders house. Their house is demolished. In traditional insurance, the claim needs to be submitted, reviewed, damage to the house assessed, etc. The lengthy process causes significant delays in receiving payouts when the policyholder needs it most. A parametric insurance policy triggers a claim and payout when a magnitude 5 earthquake is recorded within the distance established in the policy. Moreover, the policyholder knows exactly how much payout they will get from the policy. There is no uncertainty and lengthy processes.

Parametric Insurance benefits both policy issuers and holders. By automating the process, it means policyholders do not have to submit claims and go back-and-forth with claims adjusters. On the other side, Insurance companies save money by reducing resources required in the claims process (such as customer support). Likewise, since the policies stipulated the exact payouts based on a trigger, both parties know exactly what to expect after a world event. This is much more transparent for both sides, whereas in traditional insurance products both parties have to wait for the claims process to truly know the outcome and payout. Parametric Insurance is a win-win product for both Insurance companies and policyholders. 

Here are several other use-cases to learn more. 

View Munich Re (Reinsurance Company) use-cases and examples

Travel Insurance

• If your flight from London to Vancouver is delayed by 4 hours, you get a payout of USD$250

ClimateRisk

• If an earthquake with magnitude 5.0 is located 2 miles from your home, then you get a payout of USD$500,000

Business Supply Chain Events

• If rainfall reaches 200mm over a 24 hour period, then you get a payout of USD$1M

S2 THE PROBLEM(s)

What are the challenges with Parametric Insurance?

Parametric Insurance is a powerful product that if executed properly benefits both insurance providers and policyholders. The automation, transparency, and speed of this non-traditional insurance product is a significant innovation. There are, however, challenges executing this type of insurance in a fully automated and transparent way. Let’s explore some of these challenges to understand how blockchain helps solve them.

• CHALLENGE 1: Multiple centralized parties are involved with bias and must conduct manual processes before a claim can actually be triggered. 
• Parametric Insurance claims are sold and resold by multiple companies including a final reinsurance company to provide the coverage (money), each must agree that a real world event has occurred (parameter met) for triggering payout. Communication between these parties is manual and their processes for real world data validation can be distinct from each other and result in disagreements.
• Parametric Insurance products are sold to end-users (Policyholders) by Insurance brokers, these insurance brokers sell these products on behalf of Insurance companies (taking a commission), and those Insurance companies often sell these products on behalf of Reinsurance Brokers (such as Howden Group), and then ultimately Reinsurance Companies are the financial institutions that back the policies with money. See some examples below:
• Reinsurance: https://www.reinsurancene.ws/top-50-reinsurance-groups/
• Reinsurance Broker:
• Howden Group
• Insurance Company
• Aon 
• Insurance Broker
• Marsh
• IMPACT: Manual processes cause delays
• Problem a: No consensus on data sources between parties
• The problem with multiple parties is that they each will verify whether a threshold parameter for paying out a Parametric Insurance policy (e.g. Earthquake magnitude and distance from location) accurately got triggered by real world events. So, each party will independently find a data source and validate the data.
• Problem b: Data validation is not automated and streamlined
• Instead of relying on a shared agreed upon data source and verification process that can be automated, each party has to complete their own process for a claim to be approved, adding significant delays. 
• Problem c: Friction between parties during data validation process resolve with manual processes
• During each parties independent data validation, there can arise discrepancies between the data that require additional dispute resolutions to come to mutually agreed measurement of a real world value. For example, a reinsurance company may cherry-pick data sources that suggest the magnitude of an earthquake was 4.9 instead of 5.0 while an Insurance Agency has sources that show the earthquake at 5.0. Resolving disagreements is a manual process that negates the benefits of parametric insurance.
• CHALLENGE 2: Management of Parametric Insurance Policies have the potential to be much more transparent 
• Parametric Insurance is already much more transparent from traditional insurance products by showing exactly what parameters need to be met for exact payouts. However, there are still ways to improve the transparency of these products when it comes to automating the execution of the real world data monitoring, validation of parameters, approval of claims process, and payout process. 
• IMPACT: Increasing transparency increases adoption and security
• Problem d: Although policies have clear parameters for payout conditions and exact payout amounts, the execution of the claims process is still unclear to buyers/policyholders.
• Problem e: Policies are backed by coverage (money) that may not be available. There are notable examples in the industry where Reinsurance companies were bankrupt. (Read about an example here)

S3 THE SOLUTION

Please note that we dedicate the first milestone to reviewing the scope and project plan in this proposal after conducting research. The exact implementation during the project may deviate from the proposed description and scope here. We will follow the procedures and rules of Catalyst if making any significant changes.

Once again, our solution migrates the verification process onto blockchain oracle networks using Charli3’s core architecture and migrates the automated payout process by converting policies into smart contract logic integrated between oracle data input and payment output mechanisms. This latter part is designed by Fida Finance. Howden Group is responsible for directing design to fit their needs. 

The solution has three main parts: 

1. Database of Policies
2. Real World Data Verification System designed by Charli3 Oracles
3. Risk Transfer Platform designed by Fida Finance

1 - Database of Policies

The first task for the team is to convert policies from their standard format (basic documents such as a car insurance policy) into configurations ready to determine the operations of both oracle networks and the Risk Transfer Platform.

Parametric Insurance Policy → Configuration file for blockchain oracle network setup

This is one of the few parts of the process that will remain manual at this time. A configuration file for a blockchain oracle determines parameters such as data sources, triggers for updating data on-chain (e.g. such as price deviation), regular heartbeat update intervals, number of nodes, and so on. For this project, Howden Group will direct our team in selecting optimal data sources for real policies and other parameters for the blockchain network. The total number of policies and data sources will be determined in milestone 1 where we will commit to delivering a working solution for a real use-case. At this time, it is likely we will be building a POC of policies for winemakers in the Mendoza Argentina wine region to protect against earthquakes and/or temperature anomalies such as late summers or early frost. 

Parametric Insurance Policy → Smart Contract Logic for the Risk Transfer Platform

Likewise, the Fida Finance team needs to know the exact parameters and threshold values for triggering policy payouts. These will inform the creation of smart contracts and allow configuration of smart contract logic for each policy. Each policy will have a corresponding smart contract that triggers upon receiving data and causes an automated payout in ADA (or USDM or fiat if we can implement these solutions in time). Converting policies into smart contracts is likely a manual process for this project, but can be automated in the future to enable rapid scaling.

The project team will need to build a reliable back-end database solution to store this information, it will become the source of truth for both the Data Verification and the Risk Transfer Platform. In milestone 1, we will consider an entirely on-chain solution if feasible.

2 - Parametric Insurance Data Verification System

Second, Charli3 Oracles will design and build a Parametric Insurance Data Verification System (PID System) that is optimized specifically for this use-case and driven by Charli3’s enshrined blockchain oracle networks. 

About Charli3 Oracles 

Charli3 Oracles is the first decentralized enshrined oracle solution on Cardano. The first live data feeds on mainnet launched in 2022. We specialize in delivering real world data onto the Cardano blockchain to be used as input in Decentralized Applications. 

15,000+ hours of continuous Ecosystem uptime (100% uptime)

30,000+ successful updates on-chain

125,000+ successful node updates on-chain

4 distinct alert and monitoring systems to catch issues before they happen

Partially Open-Sourced

Want to understand how Charli3 works? Click here to view a short video

Configuration of Oracle Network

The policies will be converted into configurations that direct the function of an oracle network. An exact number of node operators will monitor exact data sources for exact data and events. Although we will have a database of configurations ready to launch networks to support a real use-case (e.g. Argentinian Wine policies), we will only be launching networks pulling mock data for milestones 2-3, then for testing purposes integrating the real world data sources in milestones 4-5. This will do two things: lower project costs and enable demonstrations of the system’s capabilities… or we would have to wait for an earthquake (or some other event) to occur before a demo could take place. 

Data Monitoring 

Once an oracle network is configured and deployed, the first function of the system will be to monitor data sources in real-time (e.g. every 2 minutes). Since Nodes running the Charli3 Node Software already monitor deviations for price pairs, we can adapt this monitoring tool for different policies. There may be customizations to the current Charli3 Oracle architecture to optimize for this use-case that we’ve accounted for in the milestones and budget. Positive responses from the monitoring solution trigger the second part of the solution: data verification. 

Data Verification via Oracle Networks

After the monitoring service (run by node operators, automated, and built into the node software) identifies a parameter threshold being met, it then triggers the oracle network assigned to verify the real world event by querying the data sources, aggregating the results, and passing it along to an on-chain (second processing step) aggregation contract. 

Charli3 Oracles has an already built and tested system to do all of this work. It just needs to be optimized for the data sources, parameters, and expected on-chain value for Parametric Insurance policies. The final on-chain is the culmination of all the independent external node operators verifying multiple data sources and the Charli3 aggregation contract removing any outliers and nefarious node activity. This on-chain data becomes input for the third part of the system, the Risk Transfer Platform. 

The expectation is that a single Oracle Network will service multiple policies, but we will likely need to create many networks to scale the service. We will determine how to do this efficiently during the project architectural design phase. 

What are the unknowns? What’s actually being delivered for the POC?

It is unclear how easily Charli3 can adapt its current architecture to support this use-case, so some design and restructuring is likely. It isn’t clear what data sources we will be using, so it is unclear if we will need to custom build integrations with sources for this proof of concept. Data sources may incur costs without live customers. Lastly, as noted before, we can’t force world events. For these reasons, we will prepare mock data sources in addition to preparing real world oracle feeds ready to go live with the end-to-end solution. In other words, we will create mock data sources with mock data (databases and endpoints) that will allow the team to test the system. At the end of this project, if Howden Group would like to launch a live customer POC, then the necessary oracle networks would already be deployed on testnet -- requiring a push to mainnet.

3 - Risk Transfer Platform

The function of the Risk Transfer Platform is:

• to consume values from the PID System
• trigger the automated claims approval process
• trigger the automated payout system
• act as an UI/UX for customers to check statuses of claims 

Leveraging Cardano’s smart contract functionality and Fida’s knowledge of converting policies into on-chain smart contracts, the Risk Transfer Platform is an end-to-end solution for automating Parametric Insurance. While significant challenges with the current way parametric insurance is executed by integrating with a blockchain oracle solution, the adoption of smart contract functionality on Cardano, to execute the approval and payout process, is essential to solving the challenges we address in the previous section. 

Integration with PID System

For this project, Fida will drive the design of this platform by translating parametric insurance policies into smart contracts with specific logic. An integration between the PID System may also be necessary to identify what specific feed values trigger which particular policies. There are different ways that we can integrate the two parts of the solution and will research which is the best option during the design phase in milestone 1. There have been discussions of a bitmap on-chain, but more research is required to settle on the right solution here. 

Risk Transfer Back-end and On-Chain Setup

The core function of the platform is to identify the right policies when a verified parameter is satisfied, then automate the claims approval and payout process. After receiving a triggering event from the PID system driven by Charli3 Oracles, the Risk Transfer back-end is a set of smart contracts that ensure that the specific policies triggered automatically lead to the right payouts. For this project POC, we will payout in ADA and likely on testnet to conserve funds. We will provide a report at the end of the project to describe the implementation of a live customer solution where payment may occur in fiat too (optional: if possible we may implement fiat or USDM for the project). 

Risk Transfer Platform Operation

Once smart contracts are configured, then the process between the PID System and payout should be seamless and automatic. The Fida team will construct a payment mechanism that gets triggered by the policy smart contracts. For the MVP, this may simply be an ADA payment to a crypto wallet or, if possible, a USDM or fiat ramp to a bank account of a policyholder. 

Risk Transfer UI/UX

In addition to automating Parametric Insurance, we will create a front-end. Prospective policy-holders can view policies and buy policies. While policy-holders can view and manage current policies. The exact design and functionality of the front-end will be determined in the design phase of the project. For example, if the front-end is supposed to be optimized for Argentine winemakers, then content ought to be written in Spanish. At the very least, the project will have a front-end that allows viewing and basic management of policies. 

This is not a mock-up of the front-end, but gives an idea of the direction the project will be going. 

S4 PROJECT OUTPUT

Here is a quick flowchart to illustrate everything described above.

PROJECT OUTPUT 1: Demos of System Functionality

• Demonstration using mock data of a single policy triggering automated payout on Cardano testnet
• Demonstration using mock data from multiple data sources triggering automated payout of multiple policies on Cardano testnet

The first demo for this project will output a single policy demo where a mock data source is monitored, triggers an oracle network verification event, and culminates with a verified and aggregated data value placed on-chain consumable by a single smart contract. That smart contract automatically executes the payment of a single policyholder. 

The second demo for this project will output a multiple policy demo where multiple mock data sources are monitored, triggers multiple oracle network verification events, and triggers multiple policies to execute automated payment. This “scaling” demo will likely show a few scenarios. The point of the second set of demos is to show the system works under stress. We will create test cases and showcase the functionality of the system.

PROJECT OUTPUT 2: POC in “ready-to-go-live” state

• Fully deployed Cardano testnet solution with live oracle networks
• Demonstration of readiness to go live with real-use and customers
• Launch plan for deploying live service

Upon completion of the project, we can demonstrate an end-end solution on Cardano testnet that is missing only real customers and coverage.

What is project success?

The POC will deliver a PID System and Risk Transfer Platform designed by the requirements of the Howden Group with the intention to launch a live customer version after the success of the POC. This live customer version may include moving millions of dollars on the Cardano blockchain to payout policyholders. For the POC the payment solution will likely remain ADA, but if we can build a full USDM fiat ramp enabling customers to receive payments directly to their bank accounts that would be the best possible solution. As we develop this project, the Howden Group team will direct us to the best fit for their needs.

Success is creating a Cardano testnet end-to-end solution that works as expected, demonstrates the benefits of using Cardano and Charli3 Oracles, and convinces the leadership team at Howden Group to move forward with a live customer pilot program.

How does Cardano and enshrined Charli3 Oracle Networks solve those challenges of executing Parametric Insurance?

Although it is easy to see the automation benefits from adopting the Cardano blockchain, let's take a moment to address each problem identified and explain how this solution solves that specific challenge:

S5 Post-Project Paths

Without going into more detail in this proposal, we will share a few thoughts on where this implementation goes next: 

• Live Customers: Let’s suppose we choose the Argentine winemakers use-case for the project. We will be ready to onboard new customers on the front-end shortly after project completion. Part of this project will involve getting users (e.g. farmers) to test our systems (milestones 4-5).
• Coverage on-chain: This point was already covered, but it can’t be understated that if the POC becomes a live customer platform liquidity must move on-chain in some way. We are already working with USDM and other banks to determine if a fiat ramp is possible even for this POC. 
• Fiat Ramps: Placing coverage on-chain comes hand-in-hand with the potential to create fiat ramps.
• Definition of Success: An end-to-end working testnet deployed proof of concept that accurately triggers on real world events and payouts policies according to the parameters in them. A front-end interface for policyholders that is intuitive to use and friendly enough to onboard. Success is the Howden Group’s blockchain division having a working blockchain engine that drives their parametric insurance product and integrates seamlessly into a front-end such that customers hardly realize they are relying on blockchain technology. 
• Requirements for a live customer pilot approval will become known as we work through this proof of concept. The Howden Group are the overall guides in this technical implementation and will ensure the project output addresses any of their concerns (regulatory, technical, or otherwise)

S6 Closing Note: The Benefits of smart contracts and Blockchain Oracles in Parametric Insurance

Blockchain Oracles, like Charli3, play a crucial role in automating parametric insurance by providing real-world data to smart contracts on the blockchain. 

1. Real-Time Data Collection:

   Oracles act as a bridge between blockchain-based smart contracts and external data sources. In parametric insurance, the triggering event (e.g., a natural disaster like a flood, drought, or earthquake) is defined by a parameter, such as the amount of rainfall, temperature, or wind speed. Oracles gather this data in real time from trusted sources (like meteorological databases, satellite imagery, or IoT devices).

   Example: For flood insurance, the oracle might fetch rainfall data from a trusted weather station or a government database. Once a predetermined threshold (e.g., 200mm of rainfall in 24 hours) is crossed, the data is sent to the Risk Transfer Platform and the smart contract(s) that represent the policy.

Parametric insurance, unlike traditional insurance, triggers payouts based on predefined parameters or conditions rather than assessing the actual loss. This makes the claims process faster, more transparent, and efficient, especially with the integration of blockchain technology and oracles.

2. Triggering the Smart Contract:

   Once the oracle confirms that the parameter has been met (such as an earthquake exceeding a certain magnitude or rainfall reaching a critical level), it sends this verified data to the Risk Transfer Platform on the Cardano blockchain. The smart contracts that represent the policy, pre-programmed with specific conditions for payout, automatically triggers based on this data.

   Automation: Since the process is automated by the smart contract, the insurance claim can be processed without any manual intervention. The smart contract calculates the payout based on the parameter and instantly transfers the agreed-upon compensation to the insured party.

3. Transparency and Trust:

   The use of oracles adds transparency to the process. All stakeholders—policyholders, insurers, and regulators—can access the same data used to trigger payouts, which is publicly recorded on the blockchain. This reduces disputes and the need for third-party verification, improving trust in the claims process.

   Trustless System: Traditional insurance often requires claim adjusters to assess the damage, but with parametric insurance and oracles, the reliance on subjective assessment is reduced. Since oracles provide unbiased, real-world data directly to the blockchain, the process becomes more transparent and less prone to fraud.

4. Efficient Policy Payout Processing:

   Because smart contracts execute automatically once the conditions are met, the entire process of claim settlement is expedited. Policyholders no longer need to file claims or wait for approval. This automation dramatically reduces the time and administrative costs for insurers and provides quicker relief to policyholders.

   Cost Efficiency: By automating claims processing and reducing human involvement, insurers can cut down on operational costs, making parametric insurance more cost-effective.

5. Customizable Insurance Policies:

   With oracles feeding different types of data, parametric insurance policies can be highly customizable. Businesses can choose specific parameters that matter most to them. For example, a farmer may opt for insurance against drought based on soil moisture data collected by IoT sensors, while a shipping company may insure its operations based on wind speeds or sea conditions provided by oracles.

---

Example of Blockchain Oracle in Action:

Imagine a parametric insurance policy for farmers to cover crop loss due to drought. A blockchain oracle is connected to weather stations and satellite data that measure rainfall. If a particular region experiences less than 50mm of rainfall over a 30-day period, the oracle would fetch this data and automatically trigger the smart contract policy within the Risk Transfer Platform to release the insurance payout to the farmer, without the need for traditional claims adjustment or verification.

Benefits of Combining Blockchain Oracles and the Risk Transfer Platform in Parametric Insurance:

1. Speed: Immediate data transfer and smart contract execution reduce payout time.

2. Accuracy: Oracles provide precise, real-time data, ensuring that payouts are based on factual, verified information.

3. Lower Costs: Automation decreases the need for manual labor and paperwork, reducing overhead for insurance and market providers

4. Fraud Reduction: With transparent data inputs, fraudulent claims are minimized.

5. Scalability: Oracles allow parametric insurance policies to cover a broad range of parameters and industries, from agriculture to travel.

By integrating blockchain oracles, parametric insurance can transform how claims are processed, providing a fast, transparent, and efficient alternative to traditional models.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

Value to the community:

1. Massive Increase in On-Chain Activity and Transactions

Benefit: A large insurance company integrating with Cardano would result in substantial on-chain activity due to the automation of claims, payments, policy management, and data recording. This would lead to a significant increase in the volume of transactions on the blockchain.

Impact on Cardano:

• Higher transaction volume would increase the utility and demand for ADA, the native cryptocurrency, potentially boosting its value.
• More on-chain activity would contribute to higher transaction fees collected by validators and delegators, incentivizing network participation and improving the security of the blockchain.
• It could also stimulate the development of Layer 2 solutions to handle increased traffic, further expanding Cardano’s scalability and technology stack.

2. Strengthening Cardano's Position in the Real-World Finance Sector

Benefit: Integrating a high-revenue insurance company would help establish Cardano as a significant player in the traditional finance and insurance industries. This kind of adoption would showcase Cardano's ability to handle large-scale, real-world applications.

Impact on Cardano:

• It would enhance Cardano’s reputation and credibility, attracting more businesses and institutions to explore blockchain technology for their operations.
• Positioning Cardano as a leader in enterprise blockchain solutions could lead to further partnerships in finance, banking, and other traditional sectors.
• Regulatory recognition could increase as governments and regulatory bodies take notice of the blockchain's role in managing significant financial flows, potentially leading to more favorable regulatory treatment.

3. Improved Ecosystem Development and Innovation

Benefit: The integration of a large insurance company would likely drive innovation within the Cardano ecosystem, encouraging developers to create new decentralized applications (dApps), smart contracts, and services to support insurance use cases.

Impact on Cardano:

• The ecosystem could see the emergence of a variety of applications, such as parametric insurance platforms, risk assessment tools, and decentralized reinsurance solutions.
• Increased funding and resources for development could be directed towards ecosystem projects, with incentives for developers to build tools, SDKs, and solutions that cater to insurance-related requirements.
• This could foster a diverse range of DeFi (Decentralized Finance) products built on Cardano, leveraging insurance-related data to offer innovative financial instruments or staking models.

4. Expanding Cardano's DeFi and Stablecoin Ecosystem (USDM/USDA)

Benefit: With an insurance company using Cardano, there could be new demand for DeFi services and stablecoin integrations, such as for holding premiums, issuing payouts, or managing policyholder funds.

Impact on Cardano:

• The introduction of stablecoins backed by the insurance company could provide more liquidity to the Cardano ecosystem, boosting DeFi protocols and lending platforms.
• The insurance company could facilitate the creation of new financial products, such as tokenized insurance policies or reinsurance pools, which would diversify and deepen Cardano's DeFi landscape.
• Policyholders could be incentivized to interact with Cardano’s DeFi ecosystem, such as by staking their insurance payouts or using DeFi services to grow their wealth.

5. Enhancing Data and Oracle Solutions (CHARLI3)

Benefit: Integrating an insurance company would involve real-world data sources, such as weather data for parametric insurance, healthcare data for health insurance, or logistics data for shipping insurance. This would create a need for innovation of robust oracle solutions.

Impact on Cardano:

• It could accelerate the development and adoption of oracle services within the Cardano ecosystem, helping to improve data feeds for other applications.
• Reliable and decentralized oracle networks would improve, which would also benefit other sectors that rely on real-world data, such as supply chain management, gaming, and IoT.
• The demand for verified data from multiple sources could highlight the security of enshrined oracle systems, further enhancing Cardano’s capability for data-driven smart contracts

How will you measure this impact? 

We can provide a forecast of TVL at the end of the project based on the size of the live customer pilot this project may enable. If the project is successful and Howden Group approves a live customer pilot, liquidity will move onto the chain that is trackable and measurable. We will share the tangible on-chain impact this project makes. In the event that the Howden Group has feedback and decides not to move forward, we will share this with the broader Cardano community so we can potentially address chain specific issues through Intersect and/or CIPs. There is the co-marketing opportunities with Cardano Foundation and other entities during this project to convince other Insurance companies to join the chain via the same solution. Perhaps in the event of not moving forward with live customers at the end of the project, we will have a working POC solution to pitch other, perhaps smaller, insurance companies.

We estimate that a live customer pilot could bring 15M+ in liquidity onto the chain and a co-marketing partner with a global reach. If the pilot is a success, this could mean significant liquidity entering Cardano and usage by a global leader.

Summary

• Number of users is a measurement of success during the pilot
• Approval for live customer pilot is a measurement of success
• TVL and liquidity moved on-chain for coverage is a measurement of success
• Co-marketing opportunities are measurable (What is the reach of a global leader like Howden Group?)

How will you share the outputs and opportunities that result from your project?

Apart from the deliverables in the milestones, we will share project progress and updates on one of our partner's sites and use our companies to promote the updates. Ideally this will happen on the Howden Group's blockchain division website. As the budget permits, we will continue to share updates on the project after completion through various marketing channels available to us: youtube KOLs, podcasts, tweets, and etc.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

CHARLI3 (Lead Partner) Team:

Charli3 launched one of the first smart contracts on Cardano and we're the first decentralized oracle solution live on Cardano. We've been building since 2021 and our core solution has been live since 2022 with 15,000+ hours of continuous uptime. There is no better team on Cardano to deliver an enterprise solution such as proposed in this project.

View our live decentralized oracle feeds here: portal.charli3.io

The Charli3 team have been awarded 10 funded project catalyst proposals in the past. 3 have successfully completed. 5 are in-progress and scheduled to complete by November 2024 from Fund 11. We are beginning 2 other projects this quarter. The summary is our team has a track record of delivering projects and understand how to successfully deliver a catalyst project.

We have an in-house development team with members that joined in 2021. Our core team have been with the company long-term and through a difficult bear market together. We have working relationships with every Cardano entity, most major labs, and are actively participating in the Cardano development community so we are always on the forefront of all technical innovations.

Again, our Oracle solution with push-based architecture has been live since 2022, the first Decentralized Oracle Solution on Cardano. You can view the feeds at portal.charli3.io. Our pull-based oracle functionality is live and a demo is viewable when you look at the project 1100090 milestones deliverables.

We are currently working with Anastasia Labs, Metalamp, Txpipe. We've worked with other labs such as Plank and successfully passed a Certik level 2 audit (the first on Cardano to pass one).

Our team has stayed committed through a difficult bear market subsidizing the majority of our data feeds to enable projects to build using them.

Our current offerings includes the following active services: push-based oracle data feeds, pull-based oracle data feeds, Proof of Reserves (USDM).

Fida Finance

View their site

Fida Finance is a decentralized insurance protocol that enables users (investors) to stake ADA to provide coverage (money to payout policies). If a policy does not payout, then the investor earns yield proportional to the risk of the policy. This is an innovative way to decentralize the insurance industry.

Their team consists of seasoned professionals with strong professional track records outside of the Crypto world. Within Cardano, they have been awarded two catalyst proposals in the past are familiar with the Catalyst process:

1. https://cardano.ideascale.com/c/cardano/idea/129014
2. https://cardano.ideascale.com/c/cardano/idea/120188

Whereas Charli3 is an expert on data and data delivery, Fida Finance expertise is in converting insurance policies onto on-chain smart contracts and building user friendly front-end solutions. They are an ideal fit for this project and already have some reusable parts of their current solution that can accelerate development.

Howden Group Blockchain Division

View website here

Howden's annual revenue in 2023 was $3,170,688,983 USD. They are one of the 5 largest insurance market companies in the world with millions of customers around the globe. Garnering even 0.5% of that volume (~$16mil) towards blockchain-run insurance endeavors would be incredibly beneficial to Cardano. https://www.howdengroupholdings.com/news/howden-announces-2023-full-year-results#:~:text=Exceptional%20financial%20performance%3A%20a%2033,19%25)%20and%20selective%20acquisitions.

The Howden Group has actively been investing in blockchain and digital asset insurance products. This project is a continuation of the long line of successes they've already enjoyed. As a global leader, the blockchain division has the internal resources to direct this project and make it a success.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Milestone 1: Team formation, Requirements Gathering, and Use Case Definition (Month 1-2)

Objective: Form team. Establish the specific requirements for the PoC, including the parameters for weather or seismic data, the conditions that will trigger payouts, and the customizations needed for the oracle system.

Output

• Form project team
• Hiring and Contracting
• Assigning project roles
• Write project design document that includes:
• Define use-case for real world implementation
• Defines Data integration plan including proposed real-world data sources
• Designates and describes real Howden Group insurance policy templates for POC
• Describes high level smart contract development plan including, but not limited to, Integration with Oracles and smart contract logic for automated payout
• Describes front-end portal functionality and user journey for policyholders
• Research customizations required for Oracle integrations with data sources

AC

• All necessary team members assigned to project, hired and/or contracted
• Design document completed that includes:
• Define use-case for real world implementation
• Defines Data integration plan including proposed real-world data sources
• Designates and describes real Howden Group insurance policies for POC
• Describes high level smart contract development plan including, but not limited to, Integration with Oracles and smart contract logic for automated payout
• Describes front-end portal functionality and user journey for policyholders

Evidence

• Public article hosted on one of the partners sites describing the project team and dependencies with any contractors
• Design document available for public review (e.g. PDF, Google Doc, or suitable alternative format)

MS2 Build MVP of Data Verification System and Risk Transfer Platform for demo purposes (Month 3-4)

Objective: Both the Data Verification and the Risk Transfer Platform are completed. A single real world policy is used with mock data and a mock customer to demonstrate the capabilities of the MVPs. Create a database of policies that will contain all real world policy templates.

Output

• Create a working end-to-end demo on Cardano testnet 
• Using a single source of mock data, triggering a real policy, and a mock payout to a single customer
• Test the oracle integration with FIDA’s smart contracts to confirm that data is correctly triggering payouts under specified conditions.
• Setup custom smart contract logic for demo
• Integrate Oracle network into Risk Transfer Platform
• Run Oracle network to trigger whole system
• (Required) Build Data Verification System MVP for demo purposes
• Customize the existing oracle infrastructure to fetch, validate, and push the specified policy data on-chain
• Develop custom logic for data processing, such as aggregating data from multiple sources or calculating averages, to ensure accuracy.
• Create a mock data source for demonstration purposes (we can’t force an earthquake to happen just for a demo)
• Set up an Oracle network on Cardano testnet that pulls from mock data source
• (Required) Build Initial Risk Transfer Platform MVP for demo purposes
• Build MVP of the platform although front-end is not required
• Create smart contract logic for automated payout for a single policy to a mock customer
• Create a mock customer account with wallet
• Develop the smart contracts to automate policy issuance, monitoring, and payouts based on real-time data from the oracle
• Conduct initial testing of the smart contracts on a testnet environment.
• Integrate with Data Verification System
• Create a Database of Policies
• Populate database with at least one real policy template for demo purposes
• Populate database with at least one mock customer and policy

AC

• Completed build of MVP for demonstration purposes
• (1) Data Verification System MVP completed
• Mock data source completed
• Monitors and verifies from mock data source
• (2) Risk Transfer Platform completed
• Smart contract logic for a single policy completed
• Simple payout solution completed
• Successful demonstration of monitoring a mock data source, triggering verification, communicating with the Risk Transfer Platform and executing the right ADA payment to a wallet per policy 

Evidence

• Demo video provided that shows:
• Completed Mock data source and github repo to view it
• Calling data source and getting a response
• Policy details and shows database design (expected results shown)
• Smart contract details including mock customer info with destination wallet
• End-to-end test showing the mock data source triggering an automated payment to the destination wallet on Cardano testnet (showing expected results)

MS3 Front-end MVP, Scaling and Demonstration of capabilities (Month 5-6)

Objective: Add all policy templates for real-use case defined in milestone 1, scale systems to support real-use cases, create mock demonstration of scale systems. System is capable of pulling data from multiple sources and triggering multiple policy payouts. 

Outputs

• Add all policy templates to database
• Add all real world use-case policies into the Database of Policies
• Create front-end portal MVP
• Users can buy and view policies
• Users can manage policies
• Scale Data Verification System
• Prepare configurations for oracle networks for every policy template including sourcing data providers 
• Customize integrations to support data sources and/or ensure output to Risk Transfer Platform is in a consumable format
• Add multiple mock data sources in order to demonstrate multiple data sources and triggering multiple policies
• Scale Risk Transfer Platform
• Add all real world policy templates are input into the platform as smart contracts
• Add mock customers for demonstration purposes (with wallets)
• Demonstrate different scaling test cases 
• Create demo of multiple policies triggered by single data feed
• Create demo of Multiple data feeds triggering one policy (if applicable)
• Create demo of Multiple data feeds triggering multiple policies

AC

• All policies added to database of policies
• Front-end MVP completed with basic functionality
• All configurations for oracle networks created
• All policy smart contracts added to Risk Transfer Platform
• Multiple Mock data sources created with working endpoints
• Mock customers added to Risk Transfer Platform
• Test cases for demonstration defined
• Demonstration of successful test cases passed

Evidence

• Document (PDF made public) showcasing progress:
• List of policies added
• Description of real-use cases
• Demo Video:
• Showing front-end portal with basic functionality
• 
  
• Showing test cases, expected results, and demonstrations of successful passing them

MS4 Live user testing and feedback (Month 7)

Objective: Conduct end-to-end testing of the PoC to validate the system's ability to automate insurance payouts based on real-world data. The focus will be on testing data accuracy, smart contract functionality, and user experience. Enhancements to the front-end will be completed through a set of user tests. 

Outputs

• HOWDEN: Feedback after user testing
• Review the results of the initial tests to validate that the payout conditions are met accurately.
• Re-run simulated scenarios from previous milestone using historical weather or seismic data to test the smart contracts and oracle integration from the perspective of the policy-holder.
• Provide feedback on policy configurations and suggest adjustments if needed.
• FIDA: Live users testing service, platform test
• Gather feedback from initial testers on the user interface and experience, focusing on clarity and ease of understanding.
• Perform security testing to identify any vulnerabilities in the smart contract code.
• CHARLI3: Live users testing service, mock data and oracles performance test
• Mock data sources are setup for user testing 
• Oracle networks provide data for testing purposes on new policy creation and setup, and different user tasks, and etc. 
• Monitor data feeds for accuracy and reliability during the testing phase, making any necessary adjustments to data processing logic.
• Validate that custom oracle functions are performing correctly, delivering the right data to trigger insurance payouts.
• Provide support in troubleshooting any issues related to data flow or smart contract execution.

AC: 

• User testers invited to participate and they provide feedback on front-end
• End-to-end test cases defined
• End-to-end test cases executed
• Security test of smart contract completed
• Howden reviews results and provide feedback

Evidence

• Document (PDF available to public) that contains:
• Howden Feedback
• User testing feedback
• Security review details and updates to smart contracts 
• Improvement plan and list of issues found from user testing

MS5: PoC Optimization and Final Adjustments (Month 8)

Objective: Optimize the PoC system based on testing feedback, addressing any identified issues, refining smart contract logic, and improving the user interface for a smoother experience.

Outputs

• HOWDEN:
• Advise on adjustments to policy conditions based on the findings from the testing phase.
• Help validate the final payout structure to ensure it aligns with industry expectations.
• FIDA:
• Refine the smart contracts to improve efficiency, accuracy, and user experience based on tester feedback.
• Enhance the front-end interface to improve usability and clearly communicate policy conditions and payout triggers.
• Finalize documentation for the PoC, including user guides and technical documentation.
• CHARLI3:
• Optimize oracle performance to ensure minimal latency and maximum data accuracy.
• Make final adjustments to data source integrations based on testing outcomes to enhance reliability.
• Conduct a final validation of the entire oracle and smart contract system to confirm all components function as intended.

AC

• Improvement plan and all issues found in testing are resolved or acknowledged in documentation 
• All systems are optimized and working as expected
• Deployed testnet version of POC with real world data feeds integrated (budget permitting)

Evidence

• Improvement and optimization plan document (PDF publicly available)
• POC demo video made public

MS Final: Project Close-out, Final Version of POC, Presentation to Howden Group (Month 9-10)

Objective: Present the PoC results to stakeholders, showcasing the feasibility and benefits of the parametric insurance platform. Use the insights gained to plan the next steps for a full-scale deployment. Secure final approval for moving forward to full-scale implementation by presenting a summary of the PoC outcomes, compliance status, and risk management strategies to the grant approval board.

Outputs

• Present the POC and results from all previous milestones to Howden Group’s blockchain division for further feedback
• HOWDEN:
• Present the business case to broader Howden Group team for expanding the platform based on PoC outcomes, including potential return on investment and market impact.
• Create report containing:
• Compliance Status: All regulatory requirements for parametric insurance in the target market were reviewed. The platform meets relevant standards for data privacy, insurance policy management, and financial reporting. Documentation for compliance has been prepared and no regulatory barriers were identified for proceeding.
• Risk Management: A thorough risk assessment was conducted, and strategies for mitigating identified risks (e.g., data source reliability, smart contract security) are in place. The platform is considered ready for expansion, with all major technical and operational risks addressed during the PoC phase.
• Approval/Feedback: After presenting to the Howden Group, the team will be create an issue resolution plan if necessary and/or share approval status with implementation plan
• Write Close out report
• Film Close out video

AC

• Presentation is completed to Howden Group blockchain division and to Howden Group broader team to get approval for live customer pilot
• Document created that contains:
• Requirements (issues to resolve, compliance tasks, risk tasks, and other) for project to proceed with live customer pilot
• Full live implementation plan and next steps 
• Approval of live pilot with full implementation plan written or issue remediation plan to seek approval
• Close out report written
• Close out video filmed

Evidence

• Demo presentation made public
• Document containing final report made public
• Full implementation plan or Issue remediation plan made public
• Approval status made public
• Close out video approved by catalyst
• Close out report approved by catalyst

[RESOURCES] Who is in the project team and what are their roles?

HOWDEN: Blockchain division

• Lead: Blockchain sector head (https://www.linkedin.com/in/freddie-palmer-2442729/)
• More details on their team dedicated to this project: https://www.howdengroup.com/uk-en/sector/financial-services/digital-assets-and-cryptocurrency-insurance

FIDA: Entire team

• Lead: https://www.linkedin.com/in/rodolfohansen/
• Leadership team
• Development team, smart contract and front end/ full stack
• Business development

CHARLI3: Entire team

• Charli3 brings a robust team of developers with a proven track record

Project lead:

Robert Hever

Business Development:

Damon Zwarich

Technical advisors on our team that may be involved

George Flevorsky

Founder of Steelswap.io (https://x.com/ElderM)

Current contractors who may join the project:

• Metalamp (Currently engaged)
• Txpipe (Working on complimentary project)

In-house Development team:

Talha Hussain

Deep Bhatt

Jose Seraquive

We will hire inhouse team members dedicated to this project, including a senior architect.

In addition to the in-house team assigned to this project, we will likely hire a technical project lead and full-stack developer. We have two in mind from our working relationship with Metalamp.

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

The Howden Group will be providing resources from their blockchain division for all milestones. We estimate the total contribution from the Howden Group to this project will total USD$500,000 in time and resources on top of the funding from Catalyst. We do not include the hours or rates of Howden Group team members in this budget, but only Fida and Charli3's budget requirements.

Milestone 1

Month 1-2

Charli3: main deliverable Data source Integration plan

• Interview and Hiring 1 month (40 hours x USD$50) = 2,000 
• 1 Architect (USD$125 hourly full-time) 1 month
• 176 working hours @ 125 = 22,000
• 1 Junior developer (USD$45 hourly full-time) 1 month
• 176 working hours @ 50 = 8,800
• Total milestone cost: $32,800

Description of activities:

Hiring of project lead (architect). We will bring some in-house and have a few potential candidates already selected. As a fallback, we have excellent resources through our multiple development lab partners. A junior developer will be hired and onboarded as well likely from our core team to focus exclusively on delivering this project. They will provide the architect with the necessary information to get onboarded, act as a bridge to our core team, and support them in the design phase.

Fida Finance

• Architect
• 46 Days
• USD$80 Rate hr
• Plutus Dev
• 10 days
• USD$100 Rate hr
• Product Owner
• 10 days
• USD$65 Rate hr
• Web Developer
• 0 days
• USD$65 Rate hr
• UX Specialist
• 5 days
• USD$70 Rate hr

Total milestone cost: $74,240.00

Milestone 2

Month 3-4

Charli3: Build MVP and create demo

• 1 Architect (USD$125 hourly part-time) 1.5 month
• 264 working hours @ 125 = 33,000
• 1 Junior developer (USD$45 hourly full-time) 2 month
• 352 working hours @ 50 = 17,600
• 1 Senior developer back-end (USD$90 hourly full-time) 2 months
• 352 working hours @ 90 = 31,680
• Total people cost: $82,280
• Google Cloud costs: 
• Database policies
• Database mock sources
• $1200 x 2 months = $2,400
• TOTAL: $84,680

Description of activities:

Team will start implementing the design and output a functioning demo. A senior developer is added to support in implementing any infrastructure changes that are required. The junior developer is focused on data source planning. The Architect acts as technical project lead.

Fida Finance

• Architect
• 10 Days
• USD$80 Rate hr
• Plutus Dev
• 46 days
• USD$100 Rate hr
• Product Owner
• 11.5 days
• USD$65 Rate hr
• Web Developer
• 92 days
• USD$65 Rate hr
• UX Specialist
• 2.5 days
• USD$70 Rate hr
• Tester
• 5 days
• USD$60 Rate hr

Total milestone cost: $113,060

Milestone 3

Month 5-6

Charli3: Scaling the MVP, Launching 

• 1 Architect (USD$125 hourly part-time) 1 month
• 176 working hours @ 125 = 22,000
• 1 Junior developer (USD$45 hourly full-time) 2 month
• 352 working hours @ 50 = 17,600
• 1 Senior developer back-end (USD$90 hourly full-time) 2 months
• 352 working hours @ 90 = 31,680
• Total people cost: $82,280
• Google Cloud costs: 
• Database policies
• Database mock sources
• $2200 x 2 months = $4,400
• TOTAL: $75,680

Description of activities:

This is a big step and involves considerable development, deployments, and developer time. The output is a scaled demonstration for the project and implementation of all policy templates. The bulk of the design and architecting work will be complete in milestones 1-2, so there is less time involvement for the architect.

Fida Finance

• Architect
• 10 Days
• USD$80 Rate hr
• Plutus Dev
• 46 days
• USD$100 Rate hr
• Product Owner
• 11.5 days
• USD$65 Rate hr
• Web Developer
• 92 days
• USD$65 Rate hr
• UX Specialist
• 2.5 days
• USD$70 Rate hr
• Tester
• 5 days
• USD$60 Rate hr

Total milestone cost: $113,060

Milestone 4

Month 7

Charli3: Support user tests, maintenance, implementing improvements/responding to issues

• 1 Architect (USD$125 hourly part-time) 1 month
• 88 working hours @ 125 = 5,500
• 1 Junior developer (USD$45 hourly part-time) 2 month
• 176 working hours @ 50 = 8,800
• 1 Senior developer back-end (USD$90 hourly part-time) 2 months
• 176 working hours @ 90 = 15,840
• Total people cost: $30,140
• Feed costs: 5,000 ADA
• Google Cloud costs: 
• Database policies
• Database mock sources
• Higher loads because of stress tests
• $3500 x 1 months = $3,500
• TOTAL: $33,640 + 5,000 ADA

Description of Activities:

Charli3 team is now actively maintaining oracle networks and responding to user feedback. There will be bug fixes and optimizations during this phase. Additional server costs are added during this phase. Development hours reflect any integration issues with data sources that may need fixing. Report creation will require developer hours too.

Fida Finance

• Architect
• 10 Days
• USD$80 Rate hr
• Plutus Dev
• 30 days
• USD$100 Rate hr
• Product Owner
• 5 days
• USD$65 Rate hr
• Web Developer
• 20 days
• USD$65 Rate hr
• UX Specialist
• 5 days
• USD$70 Rate hr
• Tester
• 5 days
• USD$60 Rate hr

Total milestone cost: $73,080

Milestone 5

Month 8

Charli3: Support user tests, maintenance, implementing improvements/responding to issues

• 1 Architect (USD$125 hourly part-time) 1 month
• 88 working hours @ 125 = 11,000
• 1 Junior developer (USD$45 hourly full-time) 2 month
• 352 working hours @ 50 = 17,600
• 1 Senior developer back-end (USD$90 hourly part-time) 2 months
• 176 working hours @ 90 = 15,840
• Total people cost: $44,440
• Feed costs: 5,000 ADA
• Google Cloud costs: 
• Database policies
• Database mock sources
• Higher loads because of stress tests
• $3500 x 1 months = $3,500
• TOTAL: $47,940 + 5,000 ADA

Description of Activities:

Team will put it more hours during this phase to manage bugs and resolve issues. This step involves preparing the POC for final presentation and last minute fixes.

Fida Finance

• Architect
• 10 Days
• USD$80 Rate hr
• Plutus Dev
• 30 days
• USD$100 Rate hr
• Product Owner
• 5 days
• USD$65 Rate hr
• Web Developer
• 10 days
• USD$65 Rate hr
• UX Specialist
• 5 days
• USD$70 Rate hr
• Tester
• 0 days
• USD$60 Rate hr

Total milestone cost: $50,600

Final Milestone

Month 9-10

Charli3: Support user tests, maintenance, implementing improvements/responding to issues

• 1 Architect (USD$125 hourly part-time) 1 month
• 10 working hours @ 125 = 1,250
• 1 Junior developer (USD$45 hourly full-time) 2 month
• 20 working hours @ 50 = 1,000
• 1 Senior developer back-end (USD$90 hourly part-time) 2 months
• 20 working hours @ 90 = 1,800
• Total people cost: 4,050
• Buffer for bug resolutions: 2,025
• Feed costs: 5,000 ADA
• Google Cloud costs: 
• Database policies
• Database mock sources
• Higher loads because of stress tests
• $3500 x 1 months = $3,500
• TOTAL: $9,575 + 5,000 ADA

Fida Finance

• Architect
• 0 Days
• USD$80 Rate hr
• Plutus Dev
• 0 days
• USD$100 Rate hr
• Product Owner
• 40 days
• USD$65 Rate hr
• Web Developer
• 0 days
• USD$65 Rate hr
• UX Specialist
• 0 days
• USD$70 Rate hr
• Tester
• 20 days
• USD$60 Rate hr

Total milestone cost: $42,400

BUDGET TOTALS

Charli3: USD$ 284,315 + 15,000 ADA | Converted Nov 7 2024 into ADA

SUB-TOTAL: 729,000 ADA

Fida Finance: USD$404,040 | Converted Nov 7 2024 into ADA

SUB-TOTAL: 1,015,000 ADA

GRAND TOTAL: 1,744,000 ADA

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

Howden's annual revenue in 2023 was $3,170,688,983 USD. They are one of the 5 largest insurance market companies in the world with millions of customers around the globe. Garnering even 0.5% of that volume (~$16mil) towards blockchain-run insurance endeavors would be incredibly beneficial to Cardano. https://www.howdengroupholdings.com/news/howden-announces-2023-full-year-results#:~:text=Exceptional%20financial%20performance%3A%20a%2033,19%25)%20and%20selective%20acquisitions.

Pilots for organizations the size of Howden Group often run into the millions of dollars. Working with someone like Chainlink would cost easily 10x to onboard them onto ETH.

This is a very rare opportunity for Cardano to invite a global leader onto our chain. The budget is relatively low compared to the level of standards both Charli3 and Fida Finance will need to meet in order to successfully deliver this project to Howden Group's liking.

Our estimates for budget are based on previous catalyst project experience and anticipating developer costs increasing in 2025 with a potential bull market.

If a full live customer pilot is launched, there could be millions of liquidity brought on-chain and the co-marketing benefits of having a global brand with Cardano. We truly believe this is a fantastic value for the Cardano community and shouldn't let the Howden Group get away to build on Ethereum or a competitor.