> 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/protocol/the-pwatt.md). # The pWatt The per-project financing token: the raise, the swap at commercial operation, and who earns the appreciation. The pWatt is how new infrastructure gets built. It is a financing instrument with a deliberately bounded life: it exists to raise the capital for one specific project, carry its investors through construction, and pass into the Reserve the moment the project proves itself. At commercial operation its investors move on to uWatt; the pWatt itself stays in the Reserve as the on-chain certificate of the project it financed. ## One token per project Each project is tokenized as its own ERC-20 with a fixed supply proportional to installed capacity, priced so that one pWatt reflects the cost of originating one watt of generation. Investors who fund the project earlier, carrying more construction timeline and more uncertainty, enter at a discount to those who join closer to the operation date. The raise funds the build directly, with proceeds released against installation milestones. ## If a project never reaches operation The swap happens only when a project produces. A project that stalls or is abandoned during construction never enters the Reserve and its pWatts never become uWatt; the holders keep a project-specific token with no redemption right against Suno, and the Terms and Conditions state the outcome plainly: a project may fail to reach operation, with permanent loss of the expected revenues. Milestone-based disbursement limits how much capital is exposed at any point in the build, and the risk is set out in full in [Risk disclosures](/legal/risk-disclosures.md). The boundary runs the other way as well: because only operating projects enter the Reserve, a construction failure never reaches uWatt holders. ## The swap at commercial operation When the project starts producing (its first revenues confirm the asset works as designed), the entire pWatt supply is swapped for newly minted uWatt. The swap is total: no pWatt exposure survives commercial operation. The purpose is to strengthen the aggregate. Individual projects carry risks of their own that a portfolio absorbs; bringing every operating asset into the Reserve, rather than leaving some investors exposed to single projects, is what makes the Reserve's diversification real and the uWatt's backing homogeneous. The swap is executed by the protocol in batches across all holders, each holder settled exactly once, and it is value-neutral for the system: the project's audited value enters the Reserve in the same transaction that mints the corresponding uWatt. ## The economics: who earns the appreciation A project that survives construction is worth more than it cost: financing risk has been retired and revenue is flowing. Call the margin between the audited net present value `V` and the construction capital `K` the project's appreciation `g`: $$ V = K \cdot (1 + g) $$ The swap decides how that appreciation is divided, through a single lever, the **swap price** `P`: the price per uWatt at which the incoming project is recognized. `V` itself is not a protocol decision: it is the project's NAV from [The Financial Model](/financial-model/overview.md), the published NAV per pWatt times the pWatt supply. `P` is a protocol decision layered on top of that valuation. The Reserve books the full audited value `V`; the investors collectively receive `V / P` uWatt. Since each uWatt is worth $1 at the desk, the investor return over the construction period is: $$ r\_p = \frac{1 + g}{P} - 1 $$ and everything not issued stays in the Reserve as retained appreciation: $$ \theta = \frac{V - V/P}{V - K} \quad \text{(the fraction of the uplift retained)} $$ * At `P = $1`, investors capture the entire uplift and the swap adds backing and supply one-for-one, and the Reserve's ratio dilutes toward 1 with every project. * At `P = C` (the current collateral ratio), the swap is exactly ratio-neutral: the retained share is precisely what keeps `C` unchanged. * In general, a constant swap price `P` makes the collateral ratio converge to `P` over successive swaps: the swap price *is* the long-run collateralization the entry mechanism sustains. The protocol sets `P` per project, between par and the ratio-neutral level, balancing two obligations that pull in opposite directions: rewarding the investors who carried construction risk, and funding the buffer that protects everyone who holds the result. A floor on `P` comes from economics: the pWatt return must beat what the same capital would have earned holding staked uWatt over the construction period, plus a premium for the added risk. A project whose expected uplift cannot clear that bar at a buffer-sustaining swap price does not get originated, so the viability test doubles as an origination filter. **A worked example.** A project raises `K` = $1.0M and reaches commercial operation appraised at `V` = $1.20M (`g` = 20%). Swapped at `P` = $1.09, investors receive 1,100,917 uWatt, worth $1.10M at the desk: a 10.1% return over the construction period. The Reserve books $1.20M of assets against $1.10M of new liabilities: $99k of the $200k uplift (`θ` ≈ 0.5) stays in the buffer. Both sides are paid from the same appreciation, and the division is explicit, on-chain, and decided before the swap executes. After the swap, the investor holds the most liquid form of the same underlying exposure: uWatt they can redeem at the desk, hold as a stable unit, or stake to keep earning the portfolio's yield, now diversified across every project in the Reserve instead of concentrated in one. --- # 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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