Integrating Nano-mesh Filter-based Water ATMs with last mile economy by Sunil Aggarwal

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Integrating Nano-mesh Filter-based Water ATMs with last mile economy
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Integrating Nano-mesh Filter-based Water ATMs with the last mile economy of public
health, jobs and regenerative food chain via blockchain
-Sunil Aggarwal1
Abstract
Water pollution and scarcity are core threats to human survival today. This project aims to
address both these challenges by providing a new patented disruptive technology using
Carbon Block Nano-mesh based water filters that can purify water without disturbing the
natural minerals. It does not waste any water like current popular filter methods used in both
industries and homes, generally known as Reverse Osmosis (RO). With nearly zero-electricity
requirements and small potable structure, it works as an always-ready-to-deploy instrument
for public. It is completely unlike current water filter technologies that disturbs the normal
pH level of the water; removes all the essential micro-nutrients of water. This de-mineralized
water is a health hazard for all age groups especially pregnant women and children as per
WHO report. What this project does is to merge safe water and good health at a mass-level
by enabling mass reach through Water ATMs. It introduces a distribution innovation by
creating a circular economy around Water ATMs through a blockchain-based design. The
peer-to-peer distributed ledger tokenizes filtered water into a circular economy of crypto-
tokens called SIMPAL-1 or FWUT (Filtered Water Utility Tokens) that shall enable water
access to all the holders of these tokens. It won't save only water and power but would add
serious savings on health-front and related economies of milk, vegetables, meat and other
items of food pyramid. It would create thousands of sustainable jobs comprising Water ATM
managers, bulk buyers, retail suppliers & water carriers in the last mile domain. With a
target of facilitating clean drinking water to 10 million people, this project aims to mitigate a
fundamental challenge in social and economic infrastructure around water. Beginning with a
mixed model of crowd-funding and institutional funding, it is a capital efficient project that
has zero interest costs and only a marginal advertising & marketing costs. It relies on the
network effect of a safe and affordable water chain that can scale up in a short period of
time.
1.0 Introduction
Water is the most critical natural resource that is turning toxic and scarce day after day. It is
so deeply embedded in our lives today that its toxicity and scarcity affects our entire social,
economic and health ecosystem. If water abundance and safety issues are not addressed
immediately, we are headed towards a doomsday scenario. That is where a deep research into
available solutions began under the Project Paani (water). After a long field trials and
stakeholders’ engagement, it was found that current water-filtering technology eliminate the
most needed minerals like Sodium, Magnesium and Potassium and don’t fulfil natural
hydration needs of body. Such water has a pH scale of above 7 wherein it becomes a breeding
1
Sunil Aggarwal is a philosopher-entrepreneur. He is author of “Bitcoin Magnet”, Indian sub-continent’s first comprehensive book on
blockchain technology. He is also the admin of one of the world’s largest blockchain knowledge community known on Facebook as
“Moneyframes: A Blockchain Venture”. He also runs a Youtube Channel “Moneyframes TV” dedicated to blockchain technology. He is also
first in India to teach a credit course on Bitcoin and Blockchain Applications in a university.

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ground for a lot of diseases. These technologies involve 60-70% water wastage not only but
they also carry a lot of additional costs like electricity, non-recyclable plastic bodies and
filters, branding and marketing costs and immense additional need for PET bottles that are an
environmental hazard. Since the water filter-manufacturing companies sell it at high cost like
that of a beverage, they tend to sell it as a use-and-throw product without bothering about the
hidden environmental cost of such practices. In this context, the founder of the Project Paani,
SIMPAL2
PORTAL (Smart Indian Manufacturing, Procurement and Logistics
PORTAL) in association with Indian School of Innovation and Sustainability (INSIST3
)
decided to find an alternative that does not waste water; saves on electricity cost; is scalable,
affordable and zero-pollution driven. To fulfil its vision, it decided to take a plunge into a
totally different water-filtering solution based upon Nano-Mesh technology. What follows in
this paper is the embodiment of the collaborative vision of SIMPAL PORTAL envisaged in
the Project Paani.
2.0 What is Nano-mesh filter technology?
Before we introduce the project, we must
introduce Nano-mesh filter technology. It is
ideal for microbial purification. It reduces all
major contaminants like arsenic, heavy
metals, pesticides etc. It retains healthy
minerals in filtered water and needs no
chemicals during manufacturing. It needs no
electricity, wastes zero water and delivers
water instantly. It can handle highly
contaminated water without break. Its carbon
block filters utilize a combination of
mechanical filtration, electro-kinetic
absorption and physical/chemical absorption
to reduce wide range of contaminants of
health concern. Nano-mesh works at a very
minute scale that is as small as the size of
human DNA molecules. Its size can be up to a
billionth of one metre length. The entire
filtration process happens at such a precise scale that it can provide 6-factor purification for a
pretty large amount of water pollutants. These filters have been tested and certified to reduce
Arsenic, Chlorine, Chloramine, tastes and odours, particulate matter as well as cysts, VOCs,
MTBE, trihalamehtanes, heavy metals (lead and mercury), turbidity, asbestos and certain
2 SIMPAL PORTAL (Smart Indian Manufacturing, Procurement and Logistics) is an Australian company that has entered a formal agreement
REIL to introduce beneficial western technology for manufacture and distribution into the Indian and export markets.
3 INSIST (Indian School of Innovation and Sustainability) is registered under section 25 of the Government of India Companies Law as a not
for profit organisation operating as an Open University. INSIST is a shareholder, occupies a board position and is a contractor to SIMPAL.

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pesticides too. They are also NSF tested under Protocol P231 (Microbiological Purifier) to
remove up to:
a) 99.9999% of bacteria
b) 99.99% of viruses
c) 99.9% of cysts
d) NSF/ANSI 42 - Aesthetic Effects
e) NSF/ANSI 53 - Health Effects
f) Standard 401 Incidental Contaminants / Emerging Compounds
This all is further supported with biological testing done by Stanford University, Yale
University and Seldon Technologies; chemical testing done by Lawrence Livermore National
Laboratory, Chinese Academy of Sciences and Tsinghua University. It is a patented
technology owned by Carbon Black Tech (CB Tech) that has exclusive distribution
agreements with SIMPAL PORTAL for India. At the root of it, Nano-mesh filtration system
is a commercial solution that came out of extensive research done by NASA during its efforts
to provide safe drinking water solutions to its astronauts at International Space station.
3.0 Enabling Nano-mesh filters reach the last mile users through distribution innovation
All filters need housings so that they can be designed for end-user. Currently, the focus is on
developing two kinds of water skids (an assembly that can be mounted on a truck for ease of

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relocation) with a capacity of 2500 Litres per hour (LPH) and 500 litres per hour (LPH).
2500 LPH unit requires 12 filters of 10x4.5 inch each. It means that it can purify a large
amount of water. In the case of groundwater from wells and hand-pumps or rainwater, the
filtration capacity of one filter is as high as 20,000 litres during its life-time. But in case of
drain water or highly contaminated water, a filter capacity may drop as low as 4000 litres.
After that, it is replaced by a new filter. Since water variety can be of multiple categories, we
have taken a median figure of 10,000 litres per filter as the optimum capacity after which it
would need replacement. Though housings can be designed for any capacity yet we would
calculate our figures by confining to a standard reference of 2500 LPH units only. Once
housings are fitted with filters, they would be dispatched to the locations where end-users
would utilize them. The final shape of a water skid would resemble an ATM fitted in 4x4 feet
space. That is why we call these units as Water ATMs. At every location, there would be a
dedicated manager per Water ATM so that he/she can take care of safety and delivery
operations of the machine. When we define a Water ATM manager, they can be of multiple
kinds as follows:-
a) Independent Professionals
b) Members of Cooperative
c) Corporate CSR wings
d) Charitable Trusts
e) Housing Societies
f) Public schools and Hospitals
g) Public Sector Undertakings (PSU)
Water ATM manager would act like a local branch manager of this vast network of Water
ATMs but their control would be precise but minimal i.e. it would be confined to the body of
the machine. The entire operations of water output per hour, matching of input command
with output, geo-tagging of machines and replacement life cycle of filters would be run
through a design based upon blockchain technology. All these quality checks would be
regularly monitored by SIMPAL PORTAL.

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4.0 Why blockchain technology for water supply system?
The first and foremost reason for using blockchain technology is to eliminate single-point
failure possibility of such a sensitive distribution system. Client-server architecture can be
used for such a project but the long-term cost of running such a centralized network would be
higher than running a decentralized network. The network security cost over large distances
and longer durations would be much lesser in a blockchain ecosystem. A distributed network
using blockchain technology would not be susceptible to any crashing of system. Even if the
problem comes at particular nodes, they can be corrected without disturbing the entire system
as well as jeopardizing the data integrity of the entire system. Since SIMPAL PORTAL is a
blockchain-based manufacturing and procurement-cum-logistics platform, it would always
focus on systems where autonomy of projects would ensure their sustainability for long
periods.
The second reason is to have distributed quality control architecture for entire life-cycle of
every filter. The quality of water input, life-time of every filter & Water ATM and quantity &
quality of water output are integrated. A transparent data sharing design would ensure
optimum usage of network as well as efficient diagnosis of every problem. Every unit of
Water ATM would act as independent node of the distributed network and would send real
time operational status and diagnostic reports to the Water ATM Operations Centre (SOC)
ensuring security and integrity of all data transmissions. It would ensure real time monitoring
of the system without bothering about any central point of failure. The system would be
robust even if its individual machines may not work at times. Since a filter life-cycle
management is very important in this project, it would require a zero-loss-of-data strategy. It
would ensure minimizing faults or outages and managing the life cycle of the Nano-mesh
water filters that do require replacement prior to becoming clogged.
5.0 What is the blockchain architecture of this project?
In this project, the first major challenge was to fix a metric of measuring water output so that
it can be monetized into a token. It is called SIMPAL-1 or FWUT (Filtered Water Utility
Filter
Manufacturers
(CB Tech)
Filter Housing
Manufacturers
(BSS Materials Ltd)
Water ATM
managers
(Trusts, Societies, CSR wings,
Cooperatives, PSUs, Public
Schools, & Hospitals)
Bulk Suppliers
(Shopkeepers, Societies,
Cooperatives & Businesses
Retails Users
(millions of users)

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Token) that gives its holder the right to draw water at Water ATMs managed by the SIMPAL
PORTAL, the parent company. One FWUT is anchored to 100 litres that should be a fair
average consumption per person per month. Basically, this is the currency of this social
project. Since average capacity per water filter is assumed at 10,000 litres during its life-time,
one filter (4.5 inch X 10 inch) is linked with release of 100 FWUT. The maximum filter
production and management capacity of this project is fixed at optimal limit of 1 million
filters as they will be replaced cycle after cycle. These tokens will be accessible to key
stakeholders such as Filter manufacturers, Filter Housing vendor, Water ATM manager, Bulk
water suppliers and retail users of the project (as shown above in the chart) and all of them
would be connected with a blockchain-based supply chain.
5.1 Fair price mechanism
This project needs a stable and fair price mechanism for long-term run. The critical
importance here is that it should be a transparent mechanism too. All invoices would be
uploaded to the blockchain by SIMPAL PORTAL as well as there would be a mandatory
reference for a sustainable price declared every quarter. The biggest challenge for the project
is maintaining such price points of both filters and filter housings. There may be unseen
factors like filter manufacturing process challenges or steel price-hikes that may force the
manufacturers to raise prices where water and hence token prices would increase. There
would be price hedge token fund worth 20 million tokens that would be used as a price
insurance mechanism. Token allocation for manufacturers would be done only if they provide
Price Guarantee hedge for the cost-effective and sustainable operations. There would be an
embedded and transparent mechanism by which not more than 20 tokens per filter release
would be issued to manufacturers. Now, the issue is what should be the reference price of the
token against which price appreciation can be measured. There are three following methods
to be used for filters and filter-housings:-
a) Invoice-based price reference in lieu of a pre-agreed price
b) Three-month weighted average price of each unit of last quarter
c) Pre-agreed price as per contract terms
Though any of these three methods can be used but our predominant choice would be based
on second factor that is weighted average price of last quarter. Second question is criterion
with which how many tokens would be issued to manufacturers who suffer from price
escalation. First method is to issue tokens with respect to dollar price escalation. It would be
decided as following:
For filters:
Up to first $10 price escalation would receive 4 FWUT
Up to Second $10+ $10 price escalation would receive 2 FWUT
Up to third $10+$10+$10 price escalation would receive 1 FWUT
Up to fourth $10+$10+$10+$10 price escalation would receive 0.5 FWUT

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For filter Housings4
Up to first $100 price escalation would receive 40 FWUT
Up to Second $100+$100 price escalation would receive 20 FWUT
Up to third $100+$100+$100 price escalation would receive 10 FWUT
Up to fourth $100+ $100+$100+$100 price escalation would receive 5 FWUT
Throughout the project, the management team would not intervene to control the end-price of
the token; it would have only one Price Principle (PP) behind this as the price of the token
will operate within two barriers: Minimum & Maximum. Lower barrier (PP-Min) is the one
that will be driven by the actual cost of providing per litre of filtered water and the other one
is the Upper barrier (PP-Max) that will be never more than what retail users are paying for
the general RO/Mineral water in the market. This binary of minimum and maximum prices
would be displayed on a regular basis for keeping public aware of any malpractices in the
market. The price of the token can be measured in any manner by the stakeholders as no
central body will determine how the end-user exchanges these tokens. She may buy it in local
currency, non-local currency or in gift terms or somebody may exchange them for other
means too. For the project, a token would be meant to provide water. However, SIMPAL
would ensure that unfair hoarding and unfair pricing of tokens are restricted by regular
issuance of tokens into the market. For that, a segment of token issuance is reserved for the
members of cooperative society that would be mentored by INSIST. For the bulk supply to
households, INSIST would develop low-cost reusable and eco-friendly water distribution kits
called CHAGAALS, a latest version of Mashk, (as shown in the Picture below) an old way of
shoulder-held water container made of canvass. This will reduce the need of PET bottles for
distribution. It means that this project would have zero carbon foot-print on the planet during
its distribution chain. Depending upon demand and location, INSIST would make alternative
design proposals for filter housings if the Water ATM required is less than 2500 LPH. It may
be 500 LPH or 1000 LPH wherein the lesser number of filters and smaller housings would
need lower costs.
5.2 Token issuance model
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A filter housing cost would comprise multiple elements like IN-Line Big Filter Housings, Bag Filter Housing, Fittings, Assembly, Pump, VFD,
Remote Monitoring Device and labour.

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To build a holistic and circular model of SIMPAL-1 token supply, distribution and
recirculation, we needed to have a long and delayed issuance in such a manner that it
responds to market demand and eliminates the scope for price manipulation. Every filter
supply would release 100 FWUT in the market in the first cycle and would get halved in the
second cycle. It would continue like this in all the subsequent cycles till the eighth cycle. This
would balance out two things. First, there would be continuous issuance of new tokens in the
market so that price manipulation or token hoarding cannot be engaged. Second, it would also
maintain a certain sense of finiteness of token supply. Since it is not unlimited, people would
attach certain value to them. We expect a balanced price to emerge over this period as we
have distributed the model in total of eight life-cycles of filters (Table 1). Given the optimum
management capacities of the project and its team, we realized that a maximum limit needs to
be assumed for number of filters to be distributed in one cycle. We fix that figure at 1 million
filters which means that we are targeting an amount of 10,000 million litres of filtered water
supply per cycle of filters before they are replaced for another cycle. If we assume that one
person can consume 1000 litres of safe drinking water for one year; this project would have
the potential of reaching nearly 10 million people. This is a very large number. Since it is
life-saving, resilient, ecological, social infrastructure & health-enhancing project, we might
feel tempted to go for higher numbers. But after looking at logistics challenge of the project,
SIMPAL decided that if this project can reach a little less than 1% of Indian population, it
would be a great human progress. Since it would be a sustainable project and can outlast even
the founding management team, it should stay like this till the entire water of planet is not
made free of any toxicity or scarcity threats.
TABLE 1
Sr. No. Of Filter Cycles 1 million filters x
SIMPAL-1 (FWUT)
Tokens issued per filter
Water supplied to public
per cycle
1 First cycle of 1 million filters 100.000 10,000 million litres
2 Second cycle of 1 million filters 50.000 10,000 million litres
3 Third cycle of 1 million filters 25.000 10,000 million litres
4 Fourth cycle of 1 million filters 12.500 10,000 million litres
5 Fifth cycle of 1 million filters 6.250 10,000 million litres
6 Sixth cycle of 1 million filters 3.125 10,000 million litres
7 Seventh cycle of 1 million filters 1.563 10,000 million litres
8 Eight cycle of 1 million filters 0.781 10,000 million litres
Total 199.219
5.3 Basic features of token issuance and pricing
The total number of SIMPAL-1 (FWUT) token supply is capped at 300 million out of which
apprx. 200 million is directly tied to continuous filter supply in the market. It means that
subject to number of filter release, the tokens would be issued at the rate of 100 FWUT per
filter in the first cycle; 50 FWUT per filter in the second cycle and this would go on halving
per filter release till the eighth cycle. Out of the rest of nearly 80 million tokens supply, there
are four major stakeholders for whom tokens are reserved.

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a) First one is the water cooperative society that would be mentored by INSIST. It needs to
be mentioned here that cooperative societies in India are basically a self-help tools for
civil society groups. They can initiate public projects on their own and can access
government funding only if they are at least 3-years old. Since this water cooperative
would be key adoption driver and credibility builder of the project, 30 million tokens are
reserved out of which 7 million tokens would be given free to the members of the water
cooperative in the manner mentioned below so that a steady stream of early users can be
attracted to the project. The other 10 million tokens would be allocated to the members of
the cooperative for second-time use at a subsidized water price of Rs. 2 per litre. After
that, the final 13 million tokens would be distributed among the members at a price
decided internally by the governance body of the cooperative. It means that a total of 30
million i.e. 10% tokens would be reserved for the first major stakeholders.
b) The second one is CB Tech (& its affiliates including GBI) that holds the patent to the
Nano-mesh tech. It would be offered 10 million tokens in ten equal annual instalments in
lieu of royalty if it gives exclusive licence to SIMPAL PORTAL or its affiliate body to
manufacture filters within India at a lesser cost.
TABLE 2: SIMPAL-1 (FWUT) issuance model
Sr. Categories Number of tokens
1. Total number of FWUT issuance linked to filter supply 199.219 million
2. 10-year royalty for CB Tech in lieu of manufacturing licence in
India (1 million p.a. x 10 years)
10 million
3. FWUT reserved for the members of cooperative society 30 million
a) Total amount of free tokens (for 2 million members) 7 million
i) For first 100,000 members (10 FWUT per member) 1 million
ii) Next 400,000 members (5 FWUT per member) 2 million
iii) Next 500,000 members (4 FWUT per member) 2 million
iv) Next 1,000,000 members (2 FWUT per member) 2 million
b) Subsidized Water Tokens @ Rs. 200 per token
(Second-time release for cooperative members only)
10 million
c) Reserve Fund of Tokens for Cooperative Society
(Price to be decided by the members of the Cooperative)
13 million
4. Price Hedge fund reserve 20 million
5. Reserve Fund for SIMPAL 40.781 million
6. Total FWUT to be created 300.000 million
Note:- Number of fractions in FWUT will be 3 i.e. (up to 0.1 litre)
c) SIMPAL PORTAL is the final manager of the project that will start work with its final
share of 40.781 million tokens that will be issued as continuous token sale for initial fund-
raising. These funds would be used by them for the operational management, quality
audit, blockchain management, engineering, staff training, IT costs and other
miscellaneous issues. Once these funds are exhausted, there would not be any special
release of tokens for them rather they will only work on the fees or commission basis that
would be deducted from the revenue earned from Water ATM managers. Tokens would

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work as elements of circular economy. Their purpose is to ensure the fair price
distribution among the community of all users availing filtered water from the ATMs.
d) Though it is not a stakeholder per se but the actual function of a price hedge fund of 20
million tokens would be to safeguard project from bad times in terms of irrational or
unavoidable price shifts. The entire price structure of all the elements would be put on
blockchain for permanent authentication so that data cannot be changed by even SIMPAL
PORTAL or any manufacturer. There would be put actual prices for filters as well as
filter housings for full view of public so that any action can be judged with full amount of
data transparency. In most of the cases, this Price Hedge Fund would remain inactive but
it would be activated only when price monitoring mechanism faces a threat.
TABLE 3
Price of
FWUT
Multiple Price combinations Dollar price Rupee Price
if cost of water per litre is Rs.1 $1.5 Rs. 100
if cost of water per litre is Rs. 2 $3.1 Rs. 200
If cost of water per litre is Rs. 6 $9.0 Rs. 600
Note: These prices are approximations because of variable rupee-dollar exchange ratio.
The important thing to be understood in this project is that there is no central price control
agency in this project because the final price would be decided by millions of end-users and
their ecosystem of suppliers and Water ATM managers. At the most, minimum or maximum
price barriers would be fixed but the real price would be a market determined process. To
understand, we need to understand different price combinations in the market. Since price of
water is directly linked to price of token, we can assume possibilities as is shown in Table 3.
Since nearly 66.66% (200 million) of the token supply is linked to filter supply in the market
and 7% (20 million) is used a hedge reserve, it means that only a little over 25% (80 million)
of the tokens would be released in the open market by the combination of promoters’ team,
cooperative members and CB Tech. Even a major chunk (50 million) of this figure is divided
among slow release cooperative society membership & CB Tech. The only token that would
be initially liquidated would be from SIMPAL PORTAL as it would make a part of
continuous token sale. This amount would initiate the manufacturing and procurement
operations. It would be followed by other token release for cooperative society. So, some
tokens would be used for financing the beginning of the project or raising seed capital and
others for operational cost of the project. It is assumed here that token allocation for SIMPAL
PORTAL would survive for a reasonable period of over 5-8 or more years. Once their
reserves are exhausted, the operations cost would be sponsored by the actual management
revenue and savings of the project.
The project would be initiated with a micro-launch of 100-500 Water ATMs to be followed
by a macro-launch. For the first phase i.e. micro-launch, a bunch of 5 million SIMPAL-1
(FWUT) tokens would be released for the investors through a token-swap mode. This is
important to ensure right usage of funds as well as to prevent any kind of high liquidity that

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might create fears of pump-and-dump mania. For the later phase of macro-launch, a
continuous token sale would be adopted. A detailed crowd-sale module of opening ICO of 5
million SIMPAL-1 (FWUT) tokens is mentioned below.
Table 4: Methodology of token-swap during ICO
1 Total project supply of SIMPAL-1 (FWUT) tokens 300 million
2 Maximum cap of SIMPAL-1 (FWUT) tokens via ICO 5 million
3 Maximum period of Discount Window in the ICO Up to 6 months
4 Token swap ratio for the first month 1 ETH:200 FWUT
5 Token swap ratio for the second month 1 ETH:180 FWUT
6 Token swap ratio for the third month 1 ETH:160 FWUT
7 Token swap ratio for the fourth month 1 ETH:140 FWUT
8 Token swap ratio for the fifth month 1 ETH:120 FWUT
9 Token swap ratio for the sixth month 1 ETH:100 FWUT
10 Token swap ratio for all the later months 1 ETH:100 FWUT
NOTE: - 1. The ICO window would be de-activated on the completion of sale of 5 million tokens as
and when it happens.
2. Special discount for all those who buy at least a million tokens.
5.4 Cost features of the project cycles
For the purpose of simplification, we have reduced the diversified costs of the project into
one single metric that is linked to the number of one million filters. This includes four costs;
cost of the filter (30%), cost of the housings (50%), logistics cost (10%) and miscellaneous
costs (10%) too. We have allocated proportions to these cost components for every cycle. It is
important to understand in this project that it has the maximum cost outlay in the first life-
cycle of filter supply. After that, its cost goes down drastically because cost of housings
would be zero in the second round as they, being made with stainless steel, would have a life
span of over 25 years per unit. This will add to the reduction of the logistics cost in second
and subsequent life-cycles. As per the table, the cost goes down to 45% in second cycle as
compared to the first cycle because logistics cost and housings cost are excluded there. As
TABLE 5: Cost Components Aggregated into one Single Cost model
Cost per Water
ATM unit
Filters’ cost
component
A
Filter Housings’
cost component
B
Logistics Cost
Component
C
Miscella-
neous Cost
D
Total Cost
(A+B+C+D)
First Cycle 30% 50% 10% 10% 100%
Second Cycle 25% N.A. 5% 10% 40%
Third Cycle 20% N.A. 5% 10% 35%
Fourth Cycle 15% N.A. 5% 10% 30%
Fifth Cycle 10% N.A. 5% 10% 25%
Sixth Cycle 10% N.A. 5% 10% 25%
Seventh Cycle 10% N.A. 5% 10% 25%
Eighth Cycle 10% N.A. 5% 10% 25%
Note 1: The cost component A will go down from second cycle and reduce to half by fifth cycle.
Note 2: The Filters’ Housing being made of Stainless Steel will have a minimum life span of 25 years and
hence would not require replacement in short to mid-term.
Note 3: Since Filters’ Housings will be part of Logistics in first cycle only, it will be zero in second cycle.

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economies of scale are achieved, the cost of filters would also go down and by fifth cycle, it
would be one-third as compared to the first cycle. These economies of scale would result in
massive savings for the project and would be transformed into project profits. By fifth cycle,
the project would be saving 70% of the cost. It would mean that this would be added to the
project return on investment (ROI) and would continue to add during its life time. The
holding of token would mean immense savings for the user as well as immense return for the
investor. Since 70% belongs to user class and 30% belongs to the investor class, it would
create huge and massive return both in terms of savings and return.
6.0 Uniqueness of the Project: Instant liquidity and high demand
This project has one unique feature. Let us assume that it begins with 1000 units of 2500 LPH
with average working of only two hours per day. At this rate, the water output would be 5
million litres per day. It would require 50,000 SIMPAL-1 (FWUT) tokens to enter the
TABLE 6: Consumption-driven Demand Graph of SIMPAL-1 (FWUT) tokens
Period Number of
Water
ATMs
Total water consumption
(Daily Average per ATM x Number of ATMs)
(assuming maximum 8-12 hours of daily use)
Market demand of
SIMPAL-1
(FWUT) tokens
Daily
1000
5,000 x 1000 Litres 50,000
10,000 x 1000 Litres 100,000
20,000 x 1000 Litres 200,000
10000
5,000 x 10,000 Litres 500,000
10,000 x 10,000 Litres 1,000,000
20,000 x 10,000 Litres 2,000,000
80,000
5,000 x 80,000 Litres 4,000,000
10,000 x 80,000 Litres 8,000,000
20,000 x 80,000 Litres 16,000,000
Weekly
1000
5,000 x 1000 x 7 Litres 350,000
10,000 x 1000 x 7 Litres 700,000
20,000 x 1000 x 7 Litres 1,400,000
10000
5,000 x 10,000 x 7 Litres 3,500,000
10,000 x 10,000 x 7 Litres 7,000,000
20,000 x 10,000 x 7 Litres 14,000,000
80000
5,000 x 80,000 x 7 Litres 28,000,000
10,000 x 80,000 x 7 Litres 56,000,000
20,000 x 80,000 x 7 Litres 112,000,000
Monthly
1000
5,000 x 1000 x 30 Litres 1,500,000
10,000 x 1000 x 30 Litres 3,000,000
20,000 x 1000 x 30 Litres 6,000,000
10000
5,000 x 10,000 x 30 Litres 15,000,000
10,000 x 10,000 x 30 Litres 30,000,000
20,000 x 10,000 x 30 Litres 60,000,000
80000
5,000 x 80,000 x 30 Litres 120,000,000
10,000 x 80,000 x 30 Litres 240,000,000
20,000 x 80,000 x 30 Litres 480,000,000

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network. Once consumed, it would require another amount of 50,000 tokens on the second
day even if the water is sold at the lowest possible price or even at a loss on the first day.
Once people experience the taste and benefits of filtered water, they would be willing to pay
for the fair price in order to sustain its economics. Next day, not only the same people would
demand water rather they will also communicate its benefits to more people. The demand for
water would result in fair pricing of token on the one hand and increased demand of token on
the other hand. This will result in more monetisation of tokens in the market and supply of
more working capital for the project. The daily requirement of safe drinking water would
help stabilise the water token economy in a short period. If seen on a daily basis, a Water
ATM can easily work for 8-16 hours a day. Assuming eight hours of continuous water
supply, it can produce a water output of 20,000 litres per day. (Table 6) Such 1000 Water
ATMs can create a daily demand of 200,000 tokens, weekly demand of 1.4 million tokens
and monthly demand of 6 million tokens. With 10,000 Water ATMs, this figure can multiply
ten times and 80,000 Water ATMS, it can multiply 80 times. In order to enable mass
adoption, water debit cards equivalent to the value of 1, 2, 5, 10 and 20 tokens would be
issued in the market so that all those people who are not comfortable with internet based in-
app exchange, can use the regular method that is now very common for bank ATM use. It
means that this system can generate a monthly demand of 480 million SIMPAL-1 (FWUT)
tokens on a base supply of only 250 million tokens. It means that system would have a very
high circulation speed. This high speed of circulation emanates from high demand of pure
drinking water in our daily lives. This project builds a social economy of good health and
good life in a community.
6.1 Project Viability Parameters
The project has two major manufacturing components; first is Nano-mesh filters and second
is filter housings. Like in any other production line, it is obvious that economies of scale only
can result in lower cost of production. The lower order book for filter and housings’
manufacturers would compel the production line to operate at higher cost. For example, the
cost per unit of 1000 filters would be much higher than the cost per unit of 100,000 filters.
Similarly, the cost per unit of 2500 LPH would be much less at an order book of 10,000 units
that the cost per unit if order book has only 1,000 units. That is why the project cost and
profit ratio would be variable and the resulting price of water and FWUT would be
dramatically different. This would require a dynamic analysis of cost and revenue figures at
multiple costs and at multiple water prices per litre. What we have done is to take the five
possible cost estimates that are $400, $500, $600, $700 and $800 per filter release assuming
higher price if order book has lesser number of units and lower price if it has higher number
of units. Similarly, if we take the revenue picture, we have taken five possible prices that are
Rs. 2, 3, 4, 5 and 6. So, on a basis of five costs and five revenue figures, we have 25 cases to
decide as to what figures would sustain project viability. (Table 7, 8, 9, 10 & 11). Again, it
should be remembered that these costs are based on per filter installation and not per filter.
It means that all costs are basically combination of four costs A, B, C & D. Since they are
bring calculated on per filter installation basis, they should not be confused with cost of
one filter (that is only cost element A)

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First Cycle Analysis
First cycle of this project has the highest cost concentration as it carries a lot of fixed cost.
The cost component of filter housings is 50% of the project that would be amortized in a
regular project but here, it would be replaced by holding the tokens till the next cycle. This
case is applicable both for user and investor as all tokens would ultimately flow to the users.
That is why the cost perspective should be long-term here. If we see above figures of first
cycle in Table 7, it shows that if water is sold at Rs.2 per litre, the project is at loss whether
TABLE 7
FIRST CYCLE COST PROJECTIONS
(FWUT circulation per cycle is 100 million)
A+B+C+D Cost
per filter unit
Project Cost per
first cycle
Project Revenue per cycle if
water sold at Rs. 2 per litre
Loss/Profit (ROI)
$400 $400 million $310 million $ 90 million Loss
$500 $500 million $310 million $190 million loss
$600 $600 million $310 million $290 million Loss
$700 $700 million $ 310 million $390 million loss
$800 $800 million $ 310 million $ 390 million loss
Note: Cost A+B+C+D assumes that cost of 12-filter 2500 LPH unit would be 12 times. If it is $400 per
filter unit, the net cost of 12-filter 2500 LPH unit would be $ 4800. If it is $600, the net cost of 2500 LPH
unit would be $720 and if it is $800, the net cost of 2500 LPH unit would be $9600.
water sold at Rs. 3.0 per litre
$400 $400 million $460 million $60 million profit

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the cost is $800 or even $400 but it must be remembered that these figures are of the first
cycle where the cost elements are at the highest levels and that means 100% including all cost
components A, B, C & D.
Second Cycle Analysis
In the second cycle, the cost component is reduced drastically. The filter housings’ cost
component of 50% is gone here as one Water ATM body is expected to last a minimum of 25
TABLE 8
SECOND CYCLE PROJECTIONS
A+B+C+D Cost
per filter unit @
40%
Project Cost per
cycle
Profit/Loss
$700 $280 million $ 310 million $30 million profit
$800 $320 million $ 310 million $10 million loss
Note: Cost A+B+C+D assumes that cost of 12-filter 2500 LPH unit would be 12 times. If it is $400 per filter
unit, the net cost of 12-filter 2500 LPH unit would be $ 4800. If it is $600, the net cost of 2500 LPH unit would
be $720 and if it is $800, the net cost of 2500 LPH unit would be $9600.

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years. The other 10% cost reductions from 5% reduction in filter cost component A and other
5% reduction in the logistics cost component C. The effective cost is 40% of the first cycle
here. Now if you repeat the earlier figures of cost and revenue for second cycle in Table 8,
the project is in profit even if we sell at Rs.2 per litre. This profit keeps increasing as if the
selling price of water increases. The one who sells water at higher price is the one who earns
profit but this does not mean that it would be a rent-seeking monopolistic arrangement.
Tokens would be available in the open market if some Water ATM manager tries to overprice
water. There would be serious checks and balances in the system though it does not mean that
price of water would be same everywhere. In a residential society, it may be Rs. 4 or within
the cooperative society members, it may be Rs. 2 or more or even less. So, profit is a matter
of propriety too. It would be a fair balance between what a buyer takes and seller offers.
To achieve profit at a low water price of Rs.2 per litre would be a great achievement for a
mass-selling human need. Any profit earned back goes either towards the scaling of the
production or savings in terms of the cost a consumer is paying for RO water that is being
sold in market at a retail price of Rs. 15-20 per litre and a wholesale price of Rs.4-5 per litre.
And, we should not forget the hidden health cost of using acidic water that is being sold in
the name of RO water in the market. The price paid by a user is the profit earned by avoiding
other toxic sources of water.
Third Cycle Analysis
At this cycle, the filter cost component A gets further reduced to 20% that brings down the
total cost to 35% of the first cycle. The low cost figures coupled with high profit margin turn
better in the third cycle. This project profit is not the one earned by a single player rather it is
the one earned by the entire set of users of the FWUT and hence water community.
TABLE 9
THIRD CYCLE PROJECTIONS
A+B+C+D Cost
per filter unit @
35%
Project Cost per
cycle
Loss/Profit

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Fourth & Fifth Cycle Analysis
Now, if you see in fourth cycle, the net total cost is just 30% of the first cycle cost. It would
be very interesting to find out that project is more and more profitable now at all the costs
from lower to higher beginning from Rs. 2 per litre. Every bit of money earned and saved
here is the common property of token holders. For an investor, it is a return and for a user, its
worth is savings that are generated from being part of this unique water token community.
TABLE 10
FOURTH CYCLE PROJECTIONS
A+B+C+D Cost
per filter unit @
30%
Project Cost per
cycle
Loss/Profit

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Total Number of Project Viability Cases
If we see among these 25 cost combinations in first cycle, there are only 7 loss cases out of
25 in the first cycle. In the second cycle, the loss cases go down to only 2 out of 25. In the
third cycle, it is only 1 out of 25. In the fourth and fifth cycles, it is 0 out of 25. So, if we
calculate 125 cases of project viability, there are only 13 loss cases and 112 profit cases. It
TABLE 11
FIFTH CYCLE PROJECTIONS
A+B+C+D Cost
per filter unit @
25%
Project Cost per
cycle
Loss/Profit (ROI)

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means that this project is long-term growth-cum-profit story. Though it makes some loss in
the first cycle at a lower cost, the story changes drastically favourable in the second cycle and
afterwards. Even this cost can be curtailed if the project goes with a large order of filters and
filter housings in the beginning itself. Again, this choice is dependent upon how much capital
this project is able to raise. So, there are two possibilities in this project. Adopt a slow and
sustainable strategy if less capital is raised because the project will keep on creating working
capital for its own expansion very quickly. The second choice is to adopt a fast and early-loss
strategy to get as many users as possible because they would generate huge profits once the
project enters second cycle.
7.0 A way of reducing the cost per litre and early losses in the project
A token is a circular medium of exchange. It gets used by a consumer; goes back to the Water
ATM and from there, it goes back to the user. So, it is a community property for all the years
Table 12
Sr. Range of Water ATM buyers Number of token reward per filter
1 From 1-10,000 80 tokens per filter
2 From 10,001-20,000 70 tokens per filter
Note: It means that for a 2500 LPH unit, the free tokens’ reward would come down to 80x12=960 i.e. 96,000
litres of Filtered water.

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to come but in case of a Water ATM, this is a one-time installation that is going to last at
least 25 years. There are only two methods of installing them; one is by SIMPAL itself that
may have to incur early-loss or have to set the minimum price bar at a higher level. The
second method is if this job is done by new partners/stakeholders who realize the enormity of
benefits of this project. Once people from CSR wings, Housing Societies, Hospitals, Schools
and independent businesses understand that Water ATM is a way of ensuing long-term return
on investment, they will prefer to adopt an “Own & Operate” model. They can choose to
become the water warriors for a safe and healthy society. They can bring in their own social
capital into the project and get things done in a much holistic manner. That will help in early
as well as quick traction of the project. To kick-start this, this project would motivate such
early movers with a dedicated additional reward. As there is pre-decided method of releasing
100 tokens per filter manufacturing, a dedicated share would be reserved for all those early
Water ATM buyers. This can be called partner reward program as mentioned in the Table 12.
This is a method the equivalent of which is called amortization of cost in
normal/conventional businesses. The point here is not to prove any innovation rather the
purpose is to show that a tokenized economy is a circular network of value. Whoever enters
the value framework early is rewarded too by the community for early movement.
8.0 What is the need of water cooperative in this model?
10% of the SIMPAL-1 (FWUT) tokens are reserved for the members of water cooperative to
be mentored by INSIST. These people would ensure that water cost remains within limit. The
first 100,000 members would be given 1000 litres of water free so that they can feel the
importance of safe drinking water and notice its positive impact on their health. They will act
as a social magnet for the expansion of this project so that a lot of unnecessary advertising
and marketing costs are avoided. For reuse, all the cooperative members would be initially
supplied water at a fixed price of Rs. 2 per litre but after that, they can get water at a price
decided by the members in an internal democracy. Since 10% of tokens are reserved for
them, they can feel safe that they will not have to struggle for tokens in an open market.
These cooperative members would also act as a social backbone of the project as it would
become their lifeline once the project acquires scale among them. Their members can engage
Water ATM
managers
Retail Users
Bulk
Suppliers

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in the economy of supplying water. The most interesting part of the chain is that members of
cooperative can become part of any of these three stakeholders. They can be users, bulk
suppliers and ATM managers also. This would generate a serious fair price mechanism as
well as quality control too. Imagine the number of jobs produced by this economy. If a water
courier charges Rs. 50 per 100 litres of supply and ends up supplying 1000 litres per day, it
would fetch that courier a fair wage of Rs. 500 per day which is more than official minimum
wage in the country. Over 80,000 Water ATMs would need managers, mechanics, IT people,
bulk suppliers and others too. With a regular economy of 10 billion litres per cycle, this
project would create a lot of jobs. In addition to good health and affordable pure drinking
water, this project would help revitalize the local economy in a big way. The cyclical effect
of water economy would empower people of all income strata to save a lot in terms of health
cost, social cost and monetary cost. At the end of day, this project saves not just money rather
it underlines a long-forgotten fact that humans were gifted abundance but they invented
money and ended up with creating scarcity. This project turns waste back into gold and thus
returns abundance back to humanity.
9.0 Uncalculated Spill-over benefits of the project
This project would have multiple benefits that are only briefly enumerated here:
9.1 Over 80,000 million PET bottles will be prevented from being manufactured during the
first eight cycles of this project and will not end up in land-fills or water bodies. As per a
recent report5
, about 82.8 gm of CO2 is produced for one half litre PET bottle
manufacture. For 80,000 million PET bottles, 82.2 gm x 2 X 80,000 = 13152000 million
gm of CO2 will be saved. That makes nearly 13.2 million tonnes of carbon dioxide and
that makes huge amount of Carbon Credits. The current price of one tonne of carbon
credit is around $10. It means that this project would save a value worth $130 million
over first set of eight cycles only. This cost is not factored into the project as of now.
9.2 It can help avoid the drawing of deep-bed groundwater to the tune of 80 billion litres
because the nano-mesh filters can purify rainwater, dirty tap water, hand-pump water and
even other sources of polluted water. It will save a lot of cost on digging new tube-wells,
electricity and other related costs too.
9.3 RO technology uses electricity to purify water but nano-mesh filters require very less
amount of electricity less than even 1/10 of the current need.
9.4 To be more precise, each 2500 LPH skid will generate a minimum of 5 people per skid.
So for 80,000 skids we are talking about 400,000 jobs through the Water Cooperative and
other channels. Additional services will be organically added.
9.5 Millions of people would be free of ARSENIC polluted water and there would be no
threat from all water borne diseases that account for 80 % of all diseases. The savings on
5
http://elua.com/wp-content/uploads/2013/08/Elua-Bottled-Water-and-Our-Environment.pdf

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health cost front are also not calculated but their size is so immense that it can avoid
health epidemics, hospitalization costs and collateral damage of diseases.
9.6 Each of the Water skids will also come with a water use awareness program run by the
Water Cooperative. It will create massive amount of public participation in safety of
water. Some charitable organizations, Corporate CSR initiatives or local governments
may buy Water ATMs and install them in slums, poor villages, hospitals, schools, public
places. Some of them may buy tokens upfront and can distribute them to the poor without
any cost.
9.7 It is estimated that a women in a water starved region has to spend 4 hours to collect
enough drinking water. This is totally eliminated and instead women will be given the
opportunity to earn incomes by participating in the tokenized water economy.
*********************

Integrating Nano-mesh Filter-based Water ATMs with last mile economy by Sunil Aggarwal

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