1. Project Background

Macro challenge #1 - Water scarcity is real

Water today is undervalued, misused, and misallocated. Pollution and over-reliance contribute to the growing lack of clean drinking water globally. Although water covers about 70% of the earth’s surface, only 3% is suitable for drinking. 2/3 of the drinking water is bound in glaciers, leaving only 1% of the drinking water accessible on earth. Most of this supply is underground.

The groundwater reservoirs (aquifers), and rivers flowing beneath the ground are decreasing as a consequence of human activities and overconsumption in certain areas. Water is a regenerative resource, changing state and location. The volume remains constant. However, when the local hydrological cycles are too disturbed, the effect shows as extreme droughts and intense water flooding. Hence, the drinking water resources get dried out or contaminated.Climate scientists shocked by scale of floods in Germany

This in turn has a strong negative effect on biodiversity and the climate. Water affects temperatures by providing underground coolness. One of the world’s largest aquifers is the Ogallala aquifer in the USA has helped to keep a stable climate and large natural biodiversity for thousands of years. Farmers and industries heavily rely on the aquifer for their operations. They gain access to freshwater to irrigate large fields of crops by drilling and pumping water from holes in the ground. When the water dries, the drilling goes deeper to continue production. Over reliant stories like these are becoming more frequent and the need to prepare for a water crisis is getting urgent.Farmers are depleting the Ogallala Aquifer because the government pays them to do it

Global population growth, economic development and changing consumption patterns have caused the global water demand to increase by 600% over 100 years. The UN predicts that the global demand for water will exceed the supply by 40% in 2030. Half the World to Face Severe Water Stress by 2030 unless Water Use is "Decoupled" from Economic Growth, Says International Resource Panel

The OECD Secretariat and UN-Water host a Roundtable on Financing Water in 2023, with “ambitions to anchor equity in water economics and define the hydrological cycle as a global common good, leading up to new economics to value and finance the hydrological cycle”.

The increasing water demand, poor resource management, and no transparent market value of water indicates that the problem will become a global emergency:

Access to clean drinking water from the tap is a luxury for some people. Countries like Canada, Sweden or Switzerland can still offer access to clean drinking water from the tap, but in many parts of the world, tap water is no longer potable. A recent study sampling tap water drank by 19 million Americans showed concerning levels of arsenic, lead, PFAS, and other contaminants. We sampled tap water across the US – and found arsenic, lead and toxic chemicals | US news | The Guardian.

Different solutions on how to provide clean drinking water have been tried, such as drilling deeper, filtering non-potable water, or desalinating seawater. None of these processes have proven sustainable, affordable or without risk to disturb the natural cycle of water.

The best waters in the world are naturally filtered through their own ecosystems such as layers of soil, sand, and rock, where minerals and the movement of water in nature creates a quality that mankind is unable to recreate.

Macro challenge #2 - Centralization and speculation

Due to the ongoing water crisis, economic interests in water related business activities have increased significantly on a global scale. Water related activities are one of the best investment categories in the last 10 years, with an average annual return on investment of 9.71%. https://www.spglobal.com/spdji/en/indices/esg/sp-global-water-index/#overview.

Centralized ownership of water is contractionary to closing the water scarcity gap. A centralized system increases the risk of overuse of central resources and lacks motivation to develop water wells for the people in need.

New technology, new possibilities

In the last 10 years, a disruptive technology called blockchain has entered the internet era. This enables decentralization within several central structures such as finance, big data privacy, supply chain and infrastructure projects. It is becoming a foundation in all information created today and applications for transportation, sourcing, governmental databases, and hospitals are developed.

Most people know blockchain as the underlying technology for Bitcoin and other cryptocurrencies. However, cryptocurrencies are a rather small part of the blockchain infrastructure, and the technology is constantly evolving.

The main idea is relatively simple: a blockchain is a decentralized database that registers information about any event, so that it cannot be altered. New information must agree with the information already available in the database.

Web3.0 is a community using blockchain technology to develop the globe into a more decentralized world. The community is a growing minority, and includes billionaires, CEOs, and heads of states globally.

Scientists at Rensselear Polytechnic institute have found that when 10% of the population holds an unshaken belief, their belief will always be adopted by the majority. Minority rules: Scientists discover tipping point for the spread of ideas -- ScienceDaily

The introduction of blockchain technology is comparable to the introduction of the Internet. In March 2000, 5% of the people were using the Internet. After the Dot com bubble, the Internet grew to mass adoption. The number of blockchain users by now is 320 million (4.2%) worldwide. In 2021, the crypto world experienced a bubble similar to the Dot com bubble. The mass adoption of cryptocurrency is expected before 2025 (SCNARC at Rensselear).

The crypto world continues to improve the technology, despite the resistance from centralized players. The WEF (World Economic Forum) predicts that 10% of the world's GDP will be on the blockchain before 2027. Bank of America, Goldman Sachs and Morgan Stanley are working with crypto adaptation and Mastercard is developing a way to support more banks offering crypto. Mastercard Is Bringing Crypto Trading To Your Bank

A few of the Top 100 Public Companies investing in blockchain companies include:

  • Alphabet

  • BlackRock

  • Samsung

  • PayPal

  • Microsoft

  • Tencent

  • Citi bank

  • Wells Fargo

  • LG

  • American Express

As the technology evolves, new applications are developed. The trends are leaning towards decentralization of management, and regenerative finance (ReFi). Regenerative Finance is focused on natural regenerative resources, affecting systemic challenges like climate change. Under this system, a positive impact is no longer a by-product of return on capital. Instead, the goal is to make a positive change, also delivering a financial return to the owner community. It supports a shift from an economy that is extractive to one that is regenerative.

ReFi blockchain technology is evolving towards decentralization and a shift in how we value and monetize natural capital.

DeFi Beyond the Hype The Emerging World of Decentralized Finance

Decentralized Finance (DeFi) promotes efficiency, transparency, innovation, and financial inclusion. There are six major DeFi service categories—stablecoins, exchanges, credit, derivatives, insurance, and asset management—as well as accessibility services such as wallets and oracles. While traditional finance relies on intermediaries to provide financial services, DeFi operates in a decentralized environment. Public blockchains provide services encoded in open-source software protocols and smart contracts.

The value of DeFi services for digital assets grew from less than $1 billion in 2019 to over $80 billion in May 2021 (DeFi Pulse). Yet, DeFi is still early in its maturation.

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