4. Business model – Secure, Engage, Unite
The vision of Water150 by Longhouse Foundation is to secure water ecosystems for humanity. The progress can be described with a three-pillar model; Secure, Engage and Unite.
- Secure – sourcing spring water at a local, undervalued water price
- Engage - adding value by managing distribution of water and global tokenization
- Unite – creating an impact water ecosystem helping people in need
Water 150 by Longhouse Foundation is a unique business model, changing the traditional water industry into a decentralized market. The high-quality spring water is pre-purchased in the form of a WATER150 token on the blockchain. Each WATER150 token is a proof of pre-purchased water from a regenerative water flow, allocating one liter of spring water per year for at least 150 years.
The profit margin origins from:
1. The difference between the current undervalued water price locally and the W150 token's market price globally.
2. Added value from the utility functions of the WATER150 token (see token functionality section).
Secure - an ecosystem of 1000 regenerative spring water wells
By identifying undervalued water sources with naturally filtered spring water, we can secure a regenerative flow of water that is legally approved and protected from a biodiversity perspective through:
- Well acquisition
- Lease contracts with well owners
- Drilling own wells
The water acquisition department is responsible for acquiring, leasing, and drilling water assets. Finding and signing water sources worldwide is the key to a quick and efficient growth of available water flow.
There are thousands of high-quality water wells around the planet, filtered by surrounding biodiversity and secured by their well owners. However, due to lack of equipment and management expertise, many well owners have a limited distribution to the market
A lease contract secures the availability of a regenerated water flow and offers the well owners an income based on the water flow. The well owner can be responsible for operations and maintenance. Throughout the agreement, they must fulfill the Longhouse Water Quality Standard requirements.
By building a global and decentralized organization based on wisdom and knowledge, Water150 by Longhouse Foundation can secure the water volumes and scale fast.
Longhouse Water Quality Standard
The wells that the Longhouse Foundation controls through acquisition, leasing or drilling will follow careful quality controls. To assure that the quality of water sources of all 1000 wells stays unspoiled for present and future generations, every well will be secured by the Longhouse Water Quality Standard. The standard clearly defines the criteria to become an approved water source.
When a water source is identified, third party accredited hydrologists will measure and control the quality and flow of the water to ensure that it meets the criteria of the Longhouse Water Quality Standard. The measurements follow the latest scientific guidelines and provide reliable proof of water quality. When a partnership with the owner of a water well that fulfills the conditions to become long-term partners is secured, Longhouse Water150 AB (Marketing & Operations) will perform thorough and regular controls to secure water quality.
Wells that meet the standards and become associated suppliers by acquisition or lease contracts will receive a certificate. The certificate is a proof for WATER150 token holders and well owners, assuring that the water source is of premium-quality. The certified wells will be visible on the official Water150 by Longhouse Foundation website.
The criteria have different requirement categories such as microbial, physical, chemical, radiological and mineral content. To ensure high quality standards, the water must fulfill the minimum requirements, where test results and restrictions are more rigorous than WHO, FDA, and Swedish National Food Administration recommendations. The tests will be conducted by local or centralized facilities that are accredited according to ISO 17025. Regular updates of the requirement list will take place according to the latest knowledge about dangerous substances like PFAS and microplastics. Independent third-party hydrologists will audit the entire certification process.
All well owners must understand, accept, and meet all the seven (7) standards to enter the well network:
- Water sources for seven generations. Water sources that enter the ecosystem will enter a commitment for one (1) generation. The well owner enters a partnership to stay in the ecosystem for the entire duration of the arrangement, receiving financial compensation from the Longhouse Foundation for their partnership.
- Natural water flow filtered by biodiversity. The water source needs to have a natural water flow, where the water is filtered by nature and its surrounding biodiversity. This process preserves the beneficial properties of water and replenishes the flow over time.
- High-quality drinking water with extraction permits. The water source needs to have an accredited tap, where high-quality, clean drinking water is easily accessible. We will accept large and small facilities as long as the water is easily accessible through efficient outlets. The source will also get regular quality control tests as recommended in the Longhouse Water Quality Standard to ensure high-quality clean drinking water.
- Financed upfront and legally verified. Well owners will follow the local water protection legislation giving the water extraction permits. Longhouse will conduct risk assessments to ensure the well's protection in places with unclear or undefined requirements.
- The water flow becomes pre-purchased WATER150 tokens. The well needs to be defined and allocated in accordance with the Longhouse Water quality Standard to enter the Longhouse Foundation. These water rights consist of water flow, meaning that the well maintains its water flow rate every year, for at least 150 years.
- Democratized through transparency and decentralization. Every water source connected to the Longhouse Foundation has to comply with the company transparency and decentralization principles. The water sources must connect to the well network through the blockchain.
- Global initiative making water available for all humankind. The well owners support the vision to make clean drinking water accessible globally.
If a water source (for instance, due to pollution or natural disaster) no longer fulfills the quality demands, it will be removed from the Longhouse ecosystem. There is an expectation to incentivize well owners to protect their water sources and the surrounding environment. The Longhouse Foundation will have a buffer of water to make sure that such an incident will not affect the core promise of the regenerative WATER150 token.
When water is secured, the process of adding value starts by tokenizing water from the wells. Tokenizing the water means adding value by functionality. The flow of water is divided into tradable units on a global blockchain. By following the tokenization process, an added value of the water will result in a margin of the tapped water. Bottled mineral water is sold at 1.5-3$ per liter in the U.S. (2022).
The process of tokenization starts when a certified water well is secured according to the Longhouse Water Quality Standard. The volume of flow is audited by Deloitte to be prepared for tokenization. For every liter of water flow, one WATER150 token can be put into circulation in the decentralized marketplace. By tokenizing the water tapping functionality, a pre-purchase of a part of an annual natural water flow is made possible.
A WATER150 token is generated through a smart contract on the blockchain. The smart contract is a program code, triggered when predefined conditions are met. Deloitte giving a clearance for a new water volume to be released (also called an Oracle process) can be such a trigger. The smart contract, defined as “automatable and enforceable agreements” cuts out the middlemen in the traditional vertical water value chain.
The blockchain is a decentralized record of transactions, distributed on thousands of computers to prevent corruption. All transactions are transparent and non-corrupt. The WATER150 token holder stores the codes to their proof of ownership on a digital wallet, either online or physically (on a ledger). All W150 token holders, also called the Water150 community, connect to a marketplace for trading. The marketplace can be a centralized or decentralized exchange (DEX) where the WATER150 token is listed.
The WATER150 token is a regenerative utility token. It is always equal to the pre-purchase of an annual liter of spring water for at least 150 years from the project's start, which makes the number of tokens in circulation irrelevant for the individual token holder. A saturated market of high-quality spring water will decrease the demand, and a water scarcity will increase the demand. It is easy to make a prediction that the global scarcity of water on earth will affect the category of “drinking water” however the demand and supply will differ from place to place and cannot be predicted.
The maximum supply in the system is 210 billion tokens, which corresponds to 1000 water wells with an average size of 210 million liters of flow per year.
The launch of tokens is planned with an initial batch of 4,5 billion tokens followed by “minting by community demand” up to the max supply capped at 210 billion tokens. The purpose of the initial batch is to create a proof of concept (20 wells) followed by the scale up phase (980 wells) minted by community demand. The period of implementation of the initial batch is three years and the continuous scale up is another 7 years. All tokens from the initial batch (4.5 billion WATER150 tokens) are released at the Token Generating Event (TGE) just before the public Initial Decentralized Offering (IDO). The tokens generated will be set into market circulation as new water flow is secured, certified, and approved.
A higher demand for the WATER150 token benefits:
- Token holders by increased value
- Well owners by increased security
- People in need of water by increased funds for drilling wells.
The initial price of the WATER150 token at IDO will be 0.1$, to be compared with a pre-purchase of 150 liters of spring water of today. The average price of one liter of bottled spring water in the USA is $1.5 - 3 (2022). This corresponds to a water price of $ 1-2.5 deducting the bottling and distribution cost of $0.5. With a non-inflation calculation, this corresponds to $150 -$ 375 of bottled spring water.
After the public launch, the value of the token will be set by the decentralized market.
The decentralized market will analyze the token business model, Tokenomics, where the utility of the water and tokens create economic value. For more on Tokenomics see chapter Market & Distribution.
The Longhouse Foundation is named after the longhouses in the center of ancient villages worldwide. Wise indigenous people used a longhouse to make important decisions for their tribes. The decisions should be grounded with nature, and planned for seven generations. They said that for humanity to thrive and live in harmony with nature, we must work with “greed” and “jealousy” as these are humankind’s greatest weaknesses.
To avoid making another business system thriving on the expense of other humans and natural resources, Water150 by Longhouse Foundation has designed a system with the purpose to contribute its success to people in need and a thriving ecology.
From the sales of WATER150 tokens issued into circulation from the Initial batch (see Tokenomics), 12.8% of the funds are allocated to drill wells for people in need of drinking water. This number, 12.8%, is approximately the same as the current percentage of people on earth with no access to clean drinking water.
When the initial batch is in circulation the minting continues by community demand as water is secured. The funds allocated for impact can be increased according to the long-term goals of the impact system, depending on the market price of the WATER150 token.
The defined maximum supply of WATER150 tokens is capped at 210 billion, corresponding to 1000 water wells with the average yearly flow of 210 million liters. There can never be more tokens in the system than 210 billion but the max supply can be decided to be decreased for several reasons such as an oversupply on the market. This is aligned with the shared value ecosystem’s will of a high price (see shared value ecosystem)
If the secured annual flow of water exceeds the number of tokens in circulation, it can be used to fulfill the purpose of Longhouse Foundation in other ways such as increasing revenue through selling the water or donation.
This project supports and directly impacts the Water & Sanitation goal #6 from the Sustainable Development Goals established by the United Nations, ensuring availability and sustainable management of water and sanitation for all.
Creating impact through a shared value ecosystem
The Water150 by Longhouse Foundation business model has the capacity to create a decentralized and democratic drinking water system for 10.5 billion people by 2100. It will be the first decentralized and regenerative water flow on earth.
According to ‘theory of change’, people’s actions can lead to change of behavior and affect entire communities with new acts of consciousness. The current water scarcity urgently needs a new type of financial system to be able to involve communities in the creation of a new water market. The Regenerative Finance (ReFi) element in Water150 by Longhouse Foundation is symbolized by the recurrent water flow in a healthy ground water system.
Profound change can only be created when all stakeholders become part of a system moving in a higher conscious direction. The shared value ecosystem of Water150 by Longhouse Foundation is such a model, making participants and people in need of clean drinking water benefit from the transparent impact ecosystem.
For every WATER150 token sold, a resource is activated to help the billion people on Earth who do not have access to clean drinking water. During its 150-year business plan, the aim of the project is to help the entire planet's inhabitants with the two liters of drinking water a day required to live. For every water well that is secured and taken care of, there is an underlying biodiversity that filters the water through its soil and contributes to well-functioning ecosystems.
This is no longer a utopian far-reaching vision. The Organization for Economic Co-operation and Development (OECD) and UN-Water recently had a Roundtable meeting on financing water, focusing on new economics to value water, discussing the hydrological cycle as a global common good and what it means for future finance. (Roundtable on Financing Water 2023)