This topic is quite interesting and needs to be looked at from several angles.

**Is parametric insurance gambling?**

From a technical perspective, it does have similarities to binary options. But the key difference lies in "insurable interest"—that is, whether you actually have a risk to hedge. Farmers buying drought insurance are genuinely hedging risk, whereas Wall Street traders buying drought options are engaging in speculation. The question is, how does on-chain systems distinguish identities? In reality, they can't. Interestingly, the DeFi market automatically adjusts supply and demand through price mechanisms (i.e., premiums). Although speculators profit from the spread, they objectively provide liquidity to farmers who truly need to hedge risks.

**What if a hacker attacks meteorological satellites?**

This is indeed a "source risk." If NOAA gets hacked, all weather data across the US could be compromised. But the defense strategy for such projects is usually "physical decentralization"—not relying on a single data source, but simultaneously connecting to NOAA, Europe's ECMWF, and commercial satellite data providers. Completely shutting down these systems would be too costly and not cost-effective.

**Will it replace traditional insurance companies?**

No, it will not. This is more of a complementary relationship. Traditional insurance handles complex, subjective cases—such as medical disputes or car accident liability—that require human judgment. Parametric insurance is suitable for simple, objective events like natural disasters or flight delays, where automatic payouts are driven solely by data. In essence, it acts like a technology outsourcing partner for traditional insurers.

**What about regulators' attitude?**

Actually, regulators are more of beneficiaries. Because on-chain fund flows are fully transparent and cannot be misappropriated. The EU's Solvency II regulation requires insurance companies to maintain sufficient capital. The data from on-chain pools is real-time and verifiable, which is actually an advantage for regulators.