> For the complete documentation index, see [llms.txt](https://docs.suno.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.suno.finance/overview/how-value-moves.md). # How value moves How project financing becomes portfolio backing and income for stakers. Suno connects two kinds of capital. Project investors finance new solar plants through pWatt. Depositors add liquidity by acquiring uWatt directly. Completed projects and collected revenue bring the two together in the Reserve. ## Financing a new plant pWatt is a fundraising instrument for a specific project. Investors provide capital during development and construction, taking the risk of bringing a plant into operation in exchange for the opportunity to participate in the value created by completing it. The project offering defines the funding terms. Construction delays, additional costs, or failure to reach operation can affect the outcome. This is a different stage of investment from joining the operating portfolio through uWatt. ## From construction to the Reserve After commissioning and verification, an authorized operator processes conversion: pWatts move into the Reserve and investors receive uWatt. The Reserve holds the project position and receives its operating income. The original investors now participate in the portfolio, rather than retaining a separate income stream from that individual plant. The amount of uWatt issued depends on the completed project's valuation, the Reserve's collateral ratio, the project's retention setting, and any conversion fee. Retention leaves part of the contributed value as shared backing without an equal amount of new uWatt. ### Why a completed plant can be worth more than it cost Suppose a plant needs **$1 million to build** and is valued at **$1.2 million once operating**. Construction cost measures the capital needed to deliver the plant. Operational value measures the present worth of the net income it is expected to earn, using the [financial model](/overview/overview.md). Completing construction resolves development risks and establishes a productive asset whose earnings can justify a value above cost. This is an illustrative successful project, not a promised return. A completed plant's value can also fall short of its cost. ### How that value becomes uWatt For the same project, assume the Reserve has $1.15 of backing per uWatt, the project's retention setting is 20%, and there is no conversion fee: 1. **Start with the existing buffer.** $1.15 of backing is $0.15 above the $1 reference. 2. **Calculate the conversion price.** The 20% setting applies to that $0.15 surplus—not to the project's entire value. One-fifth of $0.15 is $0.03. Adding it to $1 gives a conversion price of **$1.03 of contributed value per new uWatt**. 3. **Convert the project value.** Divide $1.2 million by $1.03 to issue approximately **1.165 million uWatt**. The roughly **$35,000 difference** remains as shared backing above those tokens' $1 reference. The full project position enters the Reserve. Retention means issuing fewer uWatt against it, not removing part of the asset or paying an operator fee. ## From electricity sales to staking rewards Operating plants sell electricity. Collected energy payments enter Reserve custody, adding cash. The protocol determines how much of each payment can fund new uWatt for stakers and how much should support the collateral buffer without matching issuance. Those rewards enter the staking vault and are released gradually into its exchange rate. Depositors earn through c-uWatt, their share of that vault; they do not have to select or manage individual projects. [Backing and liquidity](/overview/backing-and-liquidity.md) explains the portfolio's protections. [Staking with c-uWatt](/for-depositors/staking.md) follows the return from the holder's perspective. --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. 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