Backing and liquidity

The portfolio behind uWatt, its shared protections, and the assets that fund exits.

The Reserve combines productive energy assets with assets that can fund withdrawals. These serve different purposes: operating projects generate income over time, while stablecoins and supported liquid instruments provide access to cash.

What the Reserve holds

The Reserve holds contractual rights to operating-project cash flows, represented on-chain by pWatts, alongside stablecoins and supported financial instruments held in custody.

Idle liquidity is put to work in instruments selected for low risk and high liquidity. These holdings earn a base yield while keeping funds accessible for withdrawals. The balance between energy assets and liquid holdings evolves as projects enter the portfolio and capital moves in and out.

Both uWatt and staked uWatt are exposed to this same Reserve. Staking adds participation in funded rewards; it does not move the holder's position into a separate backing portfolio.

The shared collateral buffer

Suno targets $1.15 of backing for each uWatt, a collateral ratio of 1.15. With 1 million uWatt issued, that means $1.15 million of Reserve value and a $150,000 buffer above the $1 reference.

For example, a $50,000 asset write-down would leave $1.10 million of backing against the same 1 million tokens, before any other changes. The buffer takes that loss while backing remains above $1 per uWatt.

Retention at project entry and from collected income helps build this protection. The buffer is a public good within Suno: it supports the whole portfolio, rather than belonging to an individual depositor or serving as distributable operator profit. Redemptions do not pay out the surplus above $1.

The target guides policy. Actual backing and the buffer available at any moment depend on the portfolio's current value and token supply.

How assets are valued

A plant's net asset value, or NAV, estimates what its remaining net income is worth today. The financial model projects revenue and costs, then discounts future income for time and risk.

Authorized reports bring those values on-chain to account for the Reserve's project holdings. The result is an estimate of future cash, not cash already available for withdrawal.

Preserving liquidity

Suno targets a minimum 10% liquidity allocation to support withdrawals. Smart-contract checks restrict covered treasury investments and outflows to preserve the configured liquidity floor. These settings can change, and the stricter configured limit applies. The safeguards support the policy by limiting how much withdrawal capacity operators can commit elsewhere.

This liquidity is there to be used: withdrawals can draw it down, while incoming deposits and collected income replenish liquid holdings. Redeeming an instrument already counted as liquid converts existing backing into withdrawal cash; it does not add new Reserve value. Daily limits pace withdrawals, and actual availability depends on cash balances and the instruments' exit liquidity. The uWatt guide explains the withdrawal process.

Layers of protection

Real-world income, diversification, the collateral buffer, and liquidity controls address different risks. Spreading investments reduces dependence on any one plant or counterparty, while the buffer absorbs losses across the portfolio.

These protections do not eliminate operating losses, inaccurate valuations, counterparty failures, software exploits, or liquidity shortages. Custody, reporting, upgrades, and cross-chain transfers also depend on secure administration and external systems. Partial or total loss remains possible. Risks and protections explains what each safeguard addresses and the exposure that remains.