How it works

Amplifying impact through parametric conditional donations

Funds are securely deposited into a programmatic escrow (a “smart contract”) and released based on a pre-defined parametric trigger, such as the NDVI (Normalized Difference Vegetation Index), reported by a data oracle.

The diagram below visualizes the key components at play. At the heart of this mechanism is DIVA Protocol, an open-source smart contract that enables the creation and management of conditional payment agreements peer-to-peer.

Campaign setup

The DIVA Donate team collaborates with the campaign sponsor to specify the trigger metric, the data source, the data provider and the payout profile. Afterwards, an immutable programmatic escrow reflecting these specifications is created on the blockchain through DIVA Protocol and integrated into the DIVA Donate app.

1 Depositing funds

Users can deposit funds into the escrow, which are intended to provide coverage in the event of a drought.

2 Reporting

The designated data provider communicates the outcome to the DIVA Protocol, which in turn calculates the payouts for both donors and beneficiaries.

3 Beneficiary claim

If any funds are released as a donation, beneficiaries can claim them directly from the DIVA Protocol smart contract through the DIVA Donate app.

Note: If beneficiaries are unable to claim their payouts directly due to technological constraints (for example, lacking a smartphone capable of cryptocurrency transactions), a custodian can serve as an intermediary. This custodian will claim the funds on behalf of the beneficiary, convert them into the local currency, and then distribute the funds through mobile payments (such as MPesa in Kenya) or other methods.

4 Donor claim

Donors have the opportunity to reclaim any funds that have not been disbursed and use them for subsequent campaigns as they see fit.