Cole Snell and Anthony Moro are bringing blockchain to the world of life insurance.
Cole, CEO of Infineo, is shifting how we think about life insurance policies by turning them into tradable digital assets. Anthony, heading up Provenance Blockchain Labs, is providing the specialized blockchain platform that makes this possible.
Together, they're bridging the gap between traditional finance and DeFi, potentially unlocking new value in one of the oldest forms of financial protection.
In our conversation, we explore:
- Why life insurance is uniquely suited for blockchain tokenization
- The importance of purpose-built blockchains for financial services
- The process of creating true digital assets from real-world items
- A $12 trillion opportunity in the life insurance market
- New metrics for evaluating tokenized real-world assets
Whether you're in finance, tech, or just interested in how blockchain is reshaping traditional industries, this interview offers a peek into the future of assets and investments.
Here are five key takeaways from my conversation with Cole and Anthony:
Life Insurance: The Ideal Real-World Asset for Tokenization
Cole explains why life insurance is uniquely suited for blockchain tokenization:
If you think about what a non-fungible token is, think of a life insurance contract. It's about 70 pages of paper with a wet ink signature. There's no better description of a non-fungible asset than an actual life insurance contract.
Each policy is unique, valuable, and represents a significant real-world asset. The life insurance industry's size and stability make it an attractive target for blockchain innovation. By tokenizing these contracts, we could transform a traditionally illiquid asset into a more accessible and tradable form, opening up new possibilities in a typically static market.
Purpose-Built Blockchain: A Financial Services Necessity
Anthony explains why Provenance Blockchain is essential for tokenizing regulated assets like life insurance:
Provenance is built with all those ERC3643 type functions within the protocol. When they're upgraded, they're upgraded holistically. They're all in an open-source manner owned by the community.
Unlike generic blockchains, Provenance is specifically designed for financial services. This approach integrates regulatory compliance and necessary financial functions at the protocol level, eliminating the need for complex smart contract "Jenga towers." By addressing these industry-specific requirements, Provenance simplifies adoption and reduces risk, potentially accelerating the tokenization of real-world assets in the regulated financial sector.
The Five-Step Journey to True Digital Assets
Cole outlines the complex process of truly tokenizing a real-world asset:
There's a five-ingredient recipe to become digitally native. You start with the real-world asset, then add legal, regulatory, and compliance. Next, create the digital twin, followed by the digital asset. Finally, you move into a digital security with fractionalization.
Effective tokenization goes beyond digitization. Many projects stop at creating a digital twin, which is just a derivative. True tokenization involves ensuring legal compliance, establishing real ownership, preventing double-dipping in collateral pledges, and enabling fractionalization. This approach is crucial for creating genuinely valuable and tradable digital assets from real-world items like life insurance policies.
Bridging the $12 Trillion Life Insurance Gap
Cole highlights a significant market opportunity in life insurance:
In the United States alone, there's a protection gap of $12 trillion. That's how much America is essentially underinsured - people who should own life insurance but don't for whatever reason.
People who need life insurance but don't have it are often in that position due to the industry's complexity and lack of accessibility. Tokenization could address this by making life insurance more understandable and accessible. By leveraging blockchain technology to simplify and modernize life insurance, there's an opportunity not just for business growth, but to significantly improve financial security for millions of Americans.
New Metrics for Real-World Assets on Blockchain
Anthony explains why traditional crypto metrics don't apply to tokenized real-world assets:
TVL really isn't the right metric for what we're doing. Real-world assets, or assets under administration or custody, are closer than TVL. TVL in crypto means a very different thing than having a mortgage, HELOC, life insurance policy, or tokenized treasury on your platform.
In DeFi, Total Value Locked (TVL) is a common metric. However, for tokenized real-world assets like life insurance policies, mortgages, or HELOCs, this metric doesn't accurately represent value or success. Instead, metrics more akin to traditional finance, such as assets under administration or custody, may be more appropriate. As the sector matures, developing suitable evaluation methods will be crucial for accurate valuation, analysis, and attracting institutional investment.
