- According to H2O securities, almost 30 per cent of the world’s population (2 billion people) live in water-scarce conditions
- The water token (H2ON) focuses more on the funding aspect rather than the technical aspects of water infrastructure
- The H2O network will utilise blockchain technology to meet the funding gap. By combining off-chain and on-chain elements
South African company H2O securities launched what is described as a water crypto token. The ambitious project looks to tackle one of the developing world’s most challenging problems, access to clean water.
Bahamas-based GEM digital has already invested US$150 million in the water network. Amongst other challenges related to water, the network wants to use blockchain technology to help with matters of water infrastructure and water quality.
According to H2O securities, almost 30 per cent of the world’s population (2 billion people) live in water-scarce conditions. Additionally, climate and population changes are expected to grow to 50 per cent by 2030.
While the solution is known, funding for water infrastructure has a global deficit that could exceed US$18 trillion by 2030, as per the OECD 2016-2018 report. Nowhere is this more evident than in Africa, where large populations live in places without water infrastructure for potable (drinkable) water.
H2ON water network
The water network crypto token is an idea that seeks to raise capital financing for global water infrastructure. The water token (H2ON) focuses more on the funding rather than the technical aspects of water infrastructure construction and management, according to founder and CEO of H2O securities Julius Steyn.
The token is listed on the cryptocurrency exchange Bitmart and has been listed on other decentralised cryptocurrency exchanges with much activity. This Steyn believes is proof that the token has a bright future given the important matter it tackles. However, the H2ON token has not been spared by the crypto winter crashing drastically from its initial listing price.
The water crypto token (H2ON)
The H2ON white paper states that the funding gap emanates from the continuously changing financing environment. Furthermore, many of the technologies needed to solve existing water infrastructure problems are in existence but lack the financing to get a fair chance in the field.
As such, many of these technologies remain unproven in the real world. This creates a chicken and egg problem, making water infrastructure investment unattractive. Traditional infrastructure horizons are long, up to 15 years. However, the changing environment makes forecasting increasingly difficult for such extended periods. The result is many infrastructure projects going dormant.
How the water crypto token will work
The H2O network will utilise blockchain technology to meet the funding gap. By combining off-chain and on-chain elements, the token will direct water infrastructure project funding to where it is needed most. The off-chain element will allow the onboarding of existing or proposed water infrastructure projects onto the network through a sophisticated web2 portal.
This will monitor and evaluate water plants in the building and operation phases providing performance feedback and other metrics daily. The on-chain element encompasses four main smart contracts that will run on the blockchain: Token smart contract, smart plant contract, Settlement smart contract and Plant dynamic NFT. The white paper explains the four as follows;
(I) The H2O Plant Smart Contract that governs the production parameters of the water plant. It evaluates on a daily basis, the expected production capacity and quality of water produced;
(ii) The H2O Settlement Smart Contract that governs the automated and immutable purchasing of H2ON Tokens from the DEX and CEX platforms as well as the payment settlement of services rendered by network participants in the H2O Water Network based on automated billing;
(iii) The H2O Settlement Smart Contract that governs the automated and immutable purchasing of H2ON .Tokens from the DEX and CEX platforms as well as the payment settlement of services rendered by network participants in the H2O Water Network based on automated billing;
(iv) The H2O Plant Dynamic NFT (dNFT) Smart Contract that serves to inform the community of the particular water plant production data, production status, and benefit created to society and the ecosystem.
Additionally, the H2ON Token provides economic incentives, which will be distributed via smart contracts to encourage network participants to contribute to, and participate in, the H2O Water Network. It creates a mutually beneficial system where network participants are fairly compensated on an individual basis for participation and contribution.
Water crypto token a step in the right direction?
Is a water crypto token a step in the right direction? On the surface, it seems so. Blockchain technology has many wide applications, and we have only truly scratched the surface of it. Applying blockchain technology to real-world problems that devil the African continent should only be seen as a win.
In conclusion, using a DeFi approach to a large infrastructure problem is still untested and H2O securities water crypto token could prove a major litmus test for such an approach.
