Lemonade (LMND -1.92%) recently made a move into the cryptocurrency space that would help farmers in Africa.  In this video clip from "The Crypto Show" on Motley Fool Live, recorded on March 23, Fool.com contributors Jon Quast and Chris MacDonald share their thoughts about the insurance technology company's interesting project to offer crop insurance via crypto.

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Jon Quast: Lemonade. So, this is the public insurance technology company symbol LMND. I think it's a favorite stock among a lot of Fools and seeing that it is getting involved in the cryptocurrency space and so announcing a coalition to bring crop insurance to farmers in Africa.

I want to frame this narrative a little bit here. In the U.S., by and large, we have a lot of farming infrastructure so farmers who have access to irrigation, fertilizers, all this other stuff is very high. I mean, industrialized farming, I don't know if anyone really would just rely on natural elements in an industrialized farm here in the U.S., and even still farmers have crop insurance in the U.S. and it is subsidized by the U.S. Department of Agriculture.

In fact, roughly 60% of premiums I was reading from government sources this morning. Roughly 60% of premiums are subsidized by the government. Farmers only pay about 40% of those crop insurance premiums and it handles big disasters like floods and hurricanes, things like that, that can destroy crops.

In a region like Africa, you have these small-scale farmers who are relying much more on natural elements. I've lived in a society like this in South America, I can appreciate how reliant they are on certain weather conditions because you don't have the farming infrastructure and so wouldn't it be nice if they had access to crop insurance when it is their livelihood.

Lemonade here, partnering with Avalanche (AVAX 6.43%), Chainlink (LINK 4.16%), and a variety of other cryptocurrency players to provide a way for farmers in Africa to get access to crop insurance and the way it's going to work as a decentralized autonomous organization. In other words, the idea is that the smart contract program, if you will, will access weather information, all sorts of stuff, and create this predictive model on what a fair price for crop insurance is going to be.

The idea is to be no profit, so on a breakeven basis and the idea is that farmers could simply use a phone, go onto this program, input where their field is or whatever, and get crop insurance and protect their livelihood in the case of not having the right weather for an appropriate crop, and so the Lemonade Foundation is going to provide the initial capital for the liquidity pool. There's got to be money in there from the beginning. People are going to pay their premiums but in starting this out, it's not going to be enough if payouts are needed right away.

The Lemonade Foundation will provide the initial liquidity but they're going to open it up to investors to also provide liquidity and be rewarded with governance tokens and a really, really interesting use case here I thought from pioneered by Lemonade of all players. I don't know if you guys have any thoughts here but just found this whole story fascinating.

Chris MacDonald: Yeah, I think it's a real feel-good story. In terms of like you said, a real-world use case that can deliver some real value. However, the skeptic in me, and you guys know that I can be a pessimist from time to time is, what's the recourse if something does happen that it will pay out? Because just the nature of crypto is such that there are those risks involved and for an insurance company, perhaps Lemonade will backstop it so there's some assurances there.

But there's a whole legal framework behind insurance in the U.S. and around the world to protect those that are insured. The extent to which and comes back to our regulation conversation previously is and this is one area where regulation might be a good thing to provide that and perhaps grow this industry out but it will definitely be something interesting to watch.

I think insurance is one of the key growth areas in crypto that hasn't necessarily been exploited to the extent that I think it could. There are other sectors as well as healthcare and data records and certain growth areas that we're seeing some movement with, but insurance is definitely an interesting one. From a regulatory standpoint, this is one that I think will be interesting to watch.