Blockchain andDecentralized Finance inthe (Re)insurance space: apractitioners perspectiveAuthor: Marco Mirabella
Short Course IME,Chicago IL (July ‘24)

Marco Mirabella
Working Experience● Chief Executive Officer @Ensuro● Co-Founder @EnsembleData● Chief Strategy Officer @BigGo● Co-Founder @Cartesi● Former Analyst @SOSVEducation● Double Bachelor Degree fromPolytechnic of Milan and Tongji Universityof Shanghai

Bitcoin: a new digital cashCommunal Ledger
The Drunken Clam: Ledger

TransactionAmountPeter pays Quagmire

10USD

Cleveland pay Joe

20USD

Joe pays Peter50 USD

Communal Ledger
The Drunken Clam: Ledger

Transaction

AmountPeter pays Quagmire

10USD

Cleveland pay Joe

20USD

Joe pays Peter

50 USD

Anyone canadd a lineCommunal Ledger
The Drunken Clam: Ledger

Transaction

AmountPeter pays Quagmire

10USD

Cleveland pay Joe

20USD

Joe pays Peter

50 USD

Quagmire pays Joe

100 USDFRAUDULENT TRANSACTION

Hey!!

Signature

The line isvalid only ifsignedThe Drunken Clam: Ledger

Transaction

AmountPeter pays Quagmire

10USD

Cleveland pay Joe

20USD

Joe pays Peter

50 USD

Signature

Digital Signature/ Private-Public Keyprivate key:pk:

Public Key:

PK:

pk:

pk:

KxMEp1Qk4T564BsSmDM3EBW799HiK
g7GEUp2dpTePePwkjnoKLAC
35hK24tcLEWcgNA4JxpvbkNkoAcDGq
QPsP

L5QtMYqi2WrY4B9GtcYL3RSzEEBm8tYy

KwRm3sxfi1HaNwhnBFfKoFresGTVqYSXJoCbzPKx2Hx4a1rsfd3J
34EiJfy4jGF32M37aQ2ZobupwiRQWa1
Siy

UE1SUtHiJTxxq6v7hhtV

L5PFYVg9QQtBH7wXjMqywLQCAQLbt5
XQkSBiwi6kiDzPNjTHZtB2

37XuVSEpWW4trkfmvWzegTHQt7BdktSKUs

1FeexV6bAHb8ybZjqQMjJrcCrHGW9sb
6uF

Pk:

PK:

Digital Signature/ Private-Public Key

private key:

Password:

KxMEp1Qk4T564BsSmDM3EBW799HiK
g7GEUp2dpTePePwkjnoKLAC

IloveBeer!1!

Public Key:

Email:

35hK24tcLEWcgNA4JxpvbkNkoAcDGq
QPsP

cleveland@gmail.com

Sign and Verify
private key:

5KYZdUEo39z3FPrtuX2QbbwGnNP5zTd
7yyr2SC1j299sBCnWjss

Public Key:

Message:“Peter pays Quagmire 10USD”

1HZwkjkeaoZfTSaJxDw6aKkxp45agDiEz
N

Sign=(Message,pk)

Sign= (Peter pays Quagmire 10USD,

Verify=(Message,Signature,PK){TRUE/FALSE}

Verify=(Peter pays Quagmire 10USD

5KYZdUEo39z3FPrtuX2QbbwGnNP5zTd7yyr2SC1j299sBCnWjss) = 1HZwkjkeaoZfTSaJxDw6aKkxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syHnKjk4eLhkIltHYoYpXACMAGogs=.,1HZwkjkeaoZfTSaJxDw6aKkxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7YpWjUGpKFEOkZLgC2845dki974x
wR/sAFDxj3syHnKjk4eLhkIltHYoYpXACMAGogs=,1HZwkjkeao
ZfTSaJxDw6aKkxp45agDiEzN) = TRUE

TRY IT:
https://reinproject.org/bitcoin-signature-tool/#sign

Settlement
The Drunken Clam: Ledger
Transaction

AmountPeter pays Quagmire

10USD

Cleveland pay Joe

20USD

Joe pays Peter

50 USD

Signature
HZwkjkeaoZfTSaJxDw6aK
kxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7
YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syH
nKjk4eLhkIltHYoYpXAC
MAGogs=SJIWFfsuhufsZfTSaJxDw6aKkxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7
YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syH
nKjk4eLhkIltHYoYpXAC
MAGogs=SJIWFfsuhufsZfTSaJxDw6
aKkxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7
YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syH
nKjk4eLhkIltHYoYpXAC
MAGogs=I don’twant topay

Settlement
The Drunken Clam: Ledger
Transaction

AmountSignaturePeter pays Quagmire

10 USD

HZwkjkeaoZfTSaJxDw6aK
kxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7
YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syH
nKjk4eLhkIltHYoYpXAC
MAGogs=

BTC
Cleveland pay Joe

20 USDBTC

Joe pays Peter

50 USDBTC

SJIWFfsuhufsZfTSaJxDw6
aKkxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7
YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syH
nKjk4eLhkIltHYoYpXAC
MAGogs=SJIWFfsuhufsZfTSaJxDw6
aKkxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7
YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syH
nKjk4eLhkIltHYoYpXAC
MAGogs=Storing the ledger
I hate thoseguys

The Drunken Clam: Ledger

Transaction

AmountPeter pays Quagmire

10 BTC

Cleveland pay Joe

20 BTCJoe pays Peter

50 BTC

Signature
HZwkjkeaoZfTSaJxDw6aK
kxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7
YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syH
nKjk4eLhkIltHYoYpXAC
MAGogs=HZwkjkeaoZfTSaJxDw6aK
kxp45agDiEzN
HN2MsIqFuUg9i5GicfHd7
YpWjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syHnKjk4eLhkIltHYoYpXAC
MAGogs=Each person maintains one
LedgerLedgerDate

Description

10/29/2020
11:30am

Balance Forward

11/1/2020
8:45amSalary: Nuclear
Power Plant

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Increase

Decrease

£500

£20

Date

Description£100

10/29/2020
11:30am

Balance Forward£500

11/1/2020
8:45amSalary: Nuclear
Power Plant£520

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Balance

LedgerIncrease

Decrease

Balance

£100

£500

£20

£500

£520

LedgerDate

Description

10/29/2020
11:30am

Balance Forward

11/1/2020
8:45amSalary: Nuclear
Power Plant

11/5/20205:00pm

Incoming Wire fromPeter Griffin

Increase

Decrease£500£20Balance

Date

Description£100

10/29/2020
11:30am

Balance Forward£500

11/1/2020
8:45amSalary: Nuclear
Power Plant£520

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Increase

Decrease

Balance

£100

£500

£20

£500

£520

Distributed Ledger
LedgerLedgerJoe pays Cleveland 10 BTC

Date

Description

10/29/2020
11:30am

Balance Forward

11/1/2020
8:45amSalary: Nuclear
Power Plant

11/5/2020
5:00pmIncoming Wire
from Peter Griffin

Increase

Decrease

Date

Description£100

10/29/2020
11:30am

Balance Forward£500

11/1/2020
8:45amSalary: Nuclear
Power Plant£520

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Balance£500£20Ledger

Joe pays Cleveland 10 BTC

I payCleveland
10 BTC

Increase

Decrease

Balance

£100

£500

£500

£20

£520

LedgerDate

Description

10/29/2020
11:30am

Balance Forward

11/1/2020
8:45amSalary: Nuclear
Power Plant

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Increase

Decrease£500£20Balance

Date

Description£100

10/29/2020
11:30am

Balance Forward£500

11/1/2020
8:45amSalary: Nuclear
Power Plant£520

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Increase

Decrease

Balance

£100

£500

£20£500£520

Joe pays Cleveland 10 BTC

Maintaining the same ledger
I payCleveland
10 BTC

What did hesay?!?

LedgerLedgerDate

Description

10/29/2020
11:30am

Balance Forward

11/1/2020
8:45amSalary: Nuclear
Power Plant

11/5/2020
5:00pmIncoming Wire
from Peter Griffin

Increase

Decrease

Balance

£100

£500

£20

£500

£520

LedgerLedgerDate

Description

10/29/2020
11:30am

Balance Forward

11/1/2020
8:45amSalary: Nuclear
Power Plant

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Increase

Decrease£500£20DateDescription£100

10/29/2020
11:30am

Balance Forward£500

11/1/2020
8:45amSalary: Nuclear
Power Plant£520

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Balance

Increase

Decrease

£500

£20

Date

Description£100

10/29/2020
11:30am

Balance Forward£500

11/1/2020
8:45amSalary: Nuclear
Power Plant£520

11/5/2020
5:00pmIncoming Wire fromPeter Griffin

Balance

Increase

Decrease

Balance

£100

£500

£20

£500

£520

Hash Function
MESSAGE/FILE

SHA256 (Message/File)=Digest 256 bit
SHA256 (“Ciao Mamma”) ==b27db372300ec1f97c8207e032363d75fb3e7517a4
adc45ab7da1b6f9e49452c

HASH
FUNCTION

SHA256 (“ciao mamma”) ==40a4831429450e50d44fd6b4b77bf40a26ea20aad
9be4acae25ca56778223e29
FixedSize

DIGEST
256bits

Cannot bereverted

MiningLedger

Miner #1

Transaction

AmountPeter pays
Quagmire

10 BTC

Cleveland pay
Joe

20 BTCJoe pays Peter

50 BTC

Signature

1HZwkjkeaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki9
74xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=
1ghygdabfaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7YpWjUGpKFEOkZLgC2845dki9
74xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=
1ghygdabfaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki9
74xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=

NONCE: 15054454446

Miner #2
SHA256

Miner #3

I pay Joe
20 BTC

0000000000450e50d4
4fd6b4b77bf40a26ea20
aad9be4acae25ca56778
223e29

I pay Peter
50 BTC

I pay
Quagmire
10 BTCBlockchain
Previous Block Hash

Transaction

AmountPeter pays
Quagmire

10 BTC

Cleveland pay
Joe

20 BTCJoe pays Peter

50 BTC

Previous Block Hash

Signature

Transaction

Amount1HZwkjkeaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki9
74xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=

Joe pays
Quagmire

30 BTC

1ghygdabfaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki9
74xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=

Cleveland pay
Peter

20 BTC

1ghygdabfaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki9
74xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=

Joe pays
Cleveland

50 BTCNONCE: 15054454446

BLOCK #nPrevious Block Hash

Signature

Transaction

Amount1ghygdabfaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki9
74xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=

Peter pays
Quagmire

10 BTC

1HZwkjkeaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=

Cleveland pay
Joe

20 BTCJoe pays Peter

50 BTC

1ghygdabfaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=

NONCE: 8425121251

BLOCK #n+1Signature

1HZwkjkeaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=
1ghygdabfaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syHnKjk4eLh
kIltHYoYpXACMAGogs=
1HZwkjkeaoZfTSaJxDw6aKk
xp45agDiEzN
HN2MsIqFuUg9i5GicfHd7Yp
WjUGpKFEOkZLgC2845dki974xwR/sAFDxj3syHnKjk4eLhkIltHYoYpXACMAGogs=NONCE: 14545412187

BLOCK #n+2

Mining Reward

Source: Quora.com

Myth Buster“Blockchain is the FUTURE but
Cryptocurrencies are a SCAM”

Bitcoin: a new digital cash
● Decentralized● Transparent● Fixed Supply

Applications

BEFORE

Transaction Fee: 50
USD

AFTER

Transaction Fee: 4 USD

Blockchain 2.0

Ethereum

Ethereum is a, censorship-resistant,decentralised protocol for building
decentralised applications. Ethereum
allows anyone to write smart contracts
and decentralised applications (Dapp)

Source: GY’s Cryptocurrency & Blockchain Compendium

Smart Contract
IF --> THEN
Given an initial input if
these conditions apply thenthis output is reached.

A computerized transaction protocols that execute terms of acontract. (Nick Szabo)Design
STATE MACHINE: The Ethereum blockchain is essentially a transaction-based statemachine. A state machine refers to something that will read a series of inputs and,based on those inputs, transition to a new state.

Source: GY’s Cryptocurrency & Blockchain Compendium

Proof of Stake
1.

4.

Stake ETH

2.

Selection Validator

3.

New block proposal

Block approval5.

Block inclusion

5.

Validator Reward

Source: SEBA researchApplications (Finance)
Commercial Banks

P2P Lending

Exchanges

DEX(Re)insurance companies

Blockchain based (Re)InsuranceApplications (Stablecoins)
Annual of Bitcoin/Stablecoin vs Traditional financial systems

Source: Nic Carter (Castle Island Ventures)

Defi Market sizeEnsuroEnsuro is a blockchain based, fully licensed (Re)insurance company.
The company holds a license as Insurance General Business (IIGB) Digital asset Business
License Class M from the Bermuda Monetary Authority (BMA) and can operate as a segregatedaccount company.

Risk Model
provider/MGA

More competitive
Insurance capacity

Invest USDC

Collect premium interest+ Aave returns

Pay premiums

InvestReceiveinterest

Liquidity
ProvidersA Live Example
Spot: a flexible cancellation policy for experience reservations.

Customers can cancel the activity for any reason and receive an80% refund on the cost.
Sold as B2B2C or as B2B as a revenue protection for travelcompanies
Distributed through US travel experiences providers

DEMO

Embeddedprotection
bundled inthe saleprocess

Start date

Expiration datePayout

PremiumCapital locked for Solvency

Interest for
Investors

Real-time Analytics

Risk-Specific Pool

REAL-TIME ANALYTICSREAL-TIME ANALYTICS

Capital Locked forSolvency

Public Analytics (Dune)

REAL-TIME ANALYTICS

Questions?
Marco Mirabella
Email:marco@ensuro.co
Telegram: @marcomirabella