One of the most exciting promises of blockchain technology is enabling better collaboration in order to solve problems via consortia. However, in order to ensure good results, consortium-building in itself needs a coherent, transparent goal with a clear benefit for all participants.
Shared process pain-point approach.
One way that private industry has sought to bring blockchain technology into use is through consortia that share resources in order to mitigate industry-wide pain points. This “coopetition” approach has great potential, but it’s tricky to implement amongst established competitors who might have a tendency toward zero-sum gamesmanship.
Ecosystem approach - shared problem-solving.
A proven way to build a consortium is to solve an ecosystem level problem. After identifying a problem that affects keystone players across an ecosystem, the consortium develops around the necessary stakeholders and actors for a solution. In such a system, the “transparency” of blockchain technology is focused on the consortium project and solution rather than stakeholders’ internal business processes. Solving ecosystem-sized problems greats exponential growth and incentives for all stakeholders.
Smart contract “trust” nexus.
Historically, a nonprofit administrative nexus is often optimal in order to compensate for lack of reliable information and process assurance in business consortia. Monax smart contract permissions and transparency can create this nexus in an ecosystem application with reduced process expense and finite yet extensible scope.
Risk, or why blockchains are fintech, legaltech and insurtech.
Commercial ecosystems involve risk and loss as well as growth, so insurance is a critical feature of an ecosystem model meant to serve commercial needs. Insurance is a keystone player in every vertical, from individuals to complex financial instruments that apportion risk in order to keep commerce flowing. Smart contracts are ideal for creating a lens on end-to-end risk management that enables next-generation insurtech models.
Ecosystem software in action: Monax Insurance Linked Securities.
This year, Monax debuted its Insurance Linked Securities (ILS) ecosystem, which enables sponsors to incentivize resilient infrastructure through smart contract catastrophe bonds linked to a smart contract capital project management project. The project is calculated to reduce risk of loss in the subject area, and smart contracts provide constant data on project status. This end-to-end software ecosystem creates reliable processes, profitable investment, better risk pricing and overall reduced risk of loss. For more detail on how the Monax ILS solution works, read our CEO Casey Kuhlman’s Use Case Deep Dive: Insurance Linked Securities.