Dynamis is an Ethereum-based “distributed application”, meaning that the authority to validate or rescind transactions between participants is distributed evenly across the network. In this case, Dynamis is using Etherum to provide a peer-to-peer (P2P) insurance platform for redundancy insurance and other niche product lines. Eventually, Dynamis aims to create a decentralized organization to restore the trust and transparency currently lacking in the insurer-insured relationship. Dynamis intends to achieve this by providing a blockchain based consensus mechanism that will circumvent the costs and processes traditionally applied by insurance companies.
The first product Dynamis has created is a community-based unemployment insurance product using smart contracts that run on the Ethereum Blockchain platform. Specifically, Dynamis will use social networking data and validation points to verify a claimant’s employment status among peers and colleagues whilst also relying on Bitcoin-powered smart contracts for automating claims.
According to Joshua Davis, CEO and founder of Dynamis “What the Internet did to liberate information, blockchain technology is now doing to facilitate agreements.”
Under this unemployment insurance offering, a participating company pays premiums through bitcoin into a smart contract for employees, and depending on claims ratios, over time the premiums would go down. In the event of redundancies, employees receive payouts directly from this network of employees without the involvement of a traditional insurer.
An additional advantage of using smart contract logic to automate the underwriting of policies and evaluate claims is that other policyholders are able to issue supplemental unemployment insurance without the need of any full time staff.
By using the Blockchain, Dynamis wants to ensure that severance funds actually belong to employees and not employers who might be motivated to change the terms of a claim on a case by case basis.