Pilot Launch | Building a Peer-to-Peer Network for Clean Water Access in India

Mercy Corps Ventures and Atlantis DAO, with the help of local partners, launch a new pilot in rural India building a decentralized peer-to-peer water network for underserved groups to access clean water resources while increasing earning opportunities.

This post is the first of a two-part series; the second blog will share key insights after the pilot is completed. Written by Abeera Akhtar, Pilot Manager at Mercy Corps Ventures.

Image courtesy of Mercy Corps.

India is facing a water crisis. Water availability per capita has declined by 75% in the last 60 years alongside rising demand from a growing population of over 1.38 billion.

This crisis is being exacerbated by climate change whereby delayed monsoons are resulting in dried out reservoirs, while lack of proper infrastructure and government oversight are leading to unchecked water pollution.

In India, centralized water solutions often do not exist. In Tier 1 cities (the most densely populated areas), the installed capacity for wastewater treatment is only sufficient to manage 32% of the daily volume of sewage generated. In Tier 2 cities, only 8% capacity exists, and across urban areas, only 30% of wastewater is recycled.

When solutions do exist, they do not run at scale due to:

• Expensive set up and operational costs — the capital investments needed to achieve safely managed water supply, sanitation, and hygiene by 2030 are estimated at $200–400 billion per year in low- and middle-income countries such as India
• Governments and corporations are slow to respond to quality issues, disruption in supply, and leakages
• Huge negative ecological footprint due to high energy consumption and extensive sewage infrastructure that needs to be built

In some parts of India, there has been a move towards decentralized solutions such as pushing apartments above a certain size to install on-site sewage treatment plants (STPs) and reuse 100% of their wastewater. However, results have been middling with some success but no definitive way forward. For example, despite local policies in Bangalore, no apartment complex has been able to reuse 100% of its treated water due to a complex mix of economies of scale, the price of fresh water, the level of enforcement and awareness, and technological choices made under information asymmetry.

We believe there is huge potential to innovate and drive impact in this area by incorporating a Web3 token-based network that promotes community, coordination, and financial inclusion.

The Pilot

We’ve partnered with Atlantis DAO to launch a new pilot in rural India, with the help of local partners, building a decentralized peer-to-peer water network for underserved groups to access clean water resources while providing the opportunity to earn income through incentive schemes. The pilot aims to provide the digital infrastructure to improve coordination around water access, reduce water waste, and increase earning opportunities.

Atlantis DAO

A decentralized autonomous organization (DAO) is a collectively-owned, blockchain-governed organization working towards a shared mission. Atlantis DAO aims to create a system where communities and businesses are rewarded to reduce emissions and achieve self-sustainability (through access to essential resources, like water), by making it easy to create new energy and carbon and impact credits that help users earn while having a positive impact on the environment.

Through the pilot, Atlantis DAO will build and test a decentralized peer-to-peer (P2P) network that supports users to access clean water and earn tokens on the Citizen App through conservation methods, such as water recycling, or harvesting rainwater or local freshwater sources. Pilot participants will be able to buy and sell water from the Citizen App through a secure online wallet with an open auditable blockchain-based ledger and the water will then be delivered by contracted service providers.

Image courtesy of Mercy Corps.

The Citizen App will embed smart contracts to enable verification of the quantity and quality of water, water delivery, and storage rights, supplied to/by the network. Successful completion of a task will trigger smart contracts which will record the event on chain and allow individuals to be compensated accordingly.

The pilot will run for six months and focus on a population of approximately 45,000 people across five remote villages in the Chikmagalur district of Karnataka, India. This area was selected because of the limited access to safe water and sanitation due to a lack of infrastructure, jobs, and capital, which has been adversely affecting the health and livelihoods of local populations.

This pilot involves five key stakeholders:

1. Water surveyors and validators — community contributors employed to ensure the quality of drinking water to those who directly source from the ground either to earn tokens which can be used as discounts for products or services or earn income directly.
2. Water suppliers and harvesters — people who have farmlands with rainwater harvesting systems, or local communities with over 20 houses with sewage treatment facilities who collect water either earn tokens that can be used as discounts for products and services, or earn income directly.
3. Service providers — individual tankers and truck owners who are responsible for the transportation of water from one location to another and who receive immediate payment for deliveries.
4. Marketers — individuals raising awareness about the project and its processes within the local community.
5. Consumers — village dwellers, farmers, and micro, small and medium-sized enterprises (MSMEs) that use the water for drinking, cleaning, and agricultural purposes.

Given that water is a fundamental need, people who are financially excluded are encouraged to serve as surveyors and validators, allowing them to earn on the network, forming the first touchpoint of financial inclusion. With the extensive cost to access safe water currently, this system not only allows for local groups to earn an income, but also reduces their reliance on inefficient centralized utilities to a community-based decentralized model.

Image courtesy of Atlantis DAO.

The pilot will design, build, and test Atlantis DAO’s token system and digital wallet so that the exchange of value becomes more seamless and users are better incentivized to fulfill responsibilities on the Citizen App. Tokens serve to align incentives on the network to deliver higher volumes and quality, with the option to use the token for discounts to buy goods/services on the app, or earn income directly.

This pilot will test out if the proposed decentralized water infrastructure can solve the inefficiencies in current centralized processes to increase access to clean, safe water.

Centralized water infrastructure

• Expensive - requires large capital and land approvals to set up
• Relies on moving freshwater long distances, with a high cost of delivery
• Slow to respond to quality control, disruption in supply, leakage loss
• Huge negative ecological footprint

Decentralized water infrastructure

• Inexpensive - moderate to low capital requirement with favorable regulations
• Relies on rainwater and used water regenerated on-site, with a low cost of delivery
• High control on the quality of water, with quicker response to disruption in supply and leakage losses
• Positive ecological footprint due to the regeneration of water

Images courtesy of Mercy Corps.

Our Hypotheses

Access to clean, safe water will increase through the coordination and incentive structure provided by the decentralized P2P water network. This will be measured by:

• # of individuals accessing clean water
• # of liters of water exchanged on the platform (total and avg per consumer)

The decentralized P2P water network will generate new income earning opportunities (via tokens) for users through the creation of informal jobs such as water validator, surveyor, marketer, etc. This will be measured by:

• # of surveyors (+ % female) and earnings per surveyor per month
• # of validators (+ % female) and earnings per validator per month
• # of marketers (+ % female) earnings per marketer per month

Water waste will be reduced and regeneration increased through the recycling and capture of water, improving climate resilience and livelihoods for rural communities. This will be measured by:

• # of harvesters / suppliers contributing water (+ % female) and earnings per harvester / supplier per month
• # of liters of rainwater harvested and exchanged (per harvester per day)
• # of liters of recycled water regenerated and exchanged (per system per day)
• Time savings for consumers due to increased access / reduced distance to water supply
• Cost savings for consumers due to easier and more affordable access to water

Learning Questions:

1. How can decentralized water networks increase the water supply and lead to quality of life improvements for rural consumers (i.e. MSMEs/households)?
2. How will the tokens work? How are people using their tokens?
3. What is the best approach to designing and implementing a user-friendly digital wallet for semi-rural populations?

Through the creation of an innovative decentralized token economy, we are testing a model of incentivization for clean water access, which could be applied to other scarce resources around the world. This pilot is exploring how incentives can motivate individuals to build a reliable P2P network to increase access to clean water, improving community health and boosting income. As articulated by the Atlantis DAO COO, Nakul Reddy, “Scaling this pilot could truly contribute towards a system that improves the delivery of scarce public goods in India and beyond”.

Stay tuned for updates, evidence, and insights on our other Mercy Corps Ventures pilots, responsibly testing Web3 solutions for unbanked and underbanked populations in emerging markets.