Reserve Income Management and Sustainability

The Reserve is a core component of the Suno Protocol. It aggregates income-producing assets by holding pWatts from multiple operational clean energy projects. By doing so, the Reserve earns a share of the net income generated by each of these projects—just like any other pWatt holder.

This diversified income stream forms the financial foundation for the uWatt token, which represents fractional ownership of the Reserve. To ensure long-term sustainability, the Protocol defines clear rules for how this income is managed and allocated, covering depreciation, liquidity, and rewards.

All income flows are governed by smart contracts, ensuring transparency, automation, and auditability.

Revenue Source: pWatt-Based Income

The Reserve does not generate revenue directly. Instead, it accumulates income by holding pWatts from various projects, and thereby receives a proportional share of the net revenue from each one. These net revenues have already accounted for operational costs and administrative fees at the project level.

As a result, the Reserve earns a blended yield from a diverse portfolio of clean energy assets, which serves as the basis for the value and returns distributed to uWatt holders.

Revenue Allocation

The income earned by the Reserve is allocated across three primary functions:

1. Depreciation compensation

A portion of the income is allocated to offset the gradual decline in asset value as projects age. Instead of waiting until an asset is fully depreciated, the Protocol continuously reinvests this portion into acquiring new pWatts from operational projects. This helps maintain or increase the Reserve’s backing over time.

1. Liquidity Provisioning

Another portion of the income may be used to provide liquidity on decentralized exchanges. This enhances the tradability of uWatts and helps align their market price with their intrinsic value. It ensures that participants can buy and sell uWatts with minimal slippage and friction.

1. Rewards to uWatt Holders

The remaining income is distributed directly to uWatt holders, proportional to their share of the total uWatt supply. This creates a predictable, yield-bearing instrument for participants who want passive exposure to clean energy infrastructure.

Automated and transparent

All allocations and distributions are executed via smart contracts. This ensures consistent and transparent operations without centralized control. uWatt holders can verify income flows, Reserve performance, and reward distribution at any time via on-chain data.

A Sustainable Economic Loop

This model establishes a regenerative cycle:

Projects generate income → Reserve receives pWatt-based yield → Income funds depreciation, liquidity, and rewards → uWatts remain backed by productive assets → Demand grows → New projects are funded

Through this loop, the Suno Protocol ensures that uWatts are continuously supported by real-world infrastructure and that the ecosystem scales sustainably over time.