MONETARY POLICY TO SUPPORT PRICE STABILIZATION

In order to ensure measurable intrinsic value and price stability, watercoin.group will opt to maintain an approximate sustainable of water spring asset owned level each WaterCoin will maintain an approximate one-to-one ratio with a single Cubic meter reserve of Water. This equilibrium will be achieved through management of the Water reserves and the number of WaterCoin in circulation. As demand for WaterCoin causes the price of a single WaterCoin to rise on global markets, additional WaterCoin may be issued in private or open market transactions and the proceeds will be invested in additional Water reserves, sources or botteling plants. Similarly, if the price of a WaterCoin falls under the face value level, Water reserves may be liquidated with the proceeds used to purchase WaterCoin privately or in the open market. This method of issuing or repurchasing WaterCoin and the corresponding investment in or liquidation of Water reserves will provide stability to the market price of WaterCoin relative to the demand per cubic meter of Water and will provide verifiable assurances that the value of Water reserves will approximate the aggregate value of all issued WaterCoin.

WaterCoin’s price stability program will be managed by the WaterCoin management team with a view to supporting the liquidity and functional operation of the WaterCoin marketplace and to maintaining an approximate but not precise correlation between the price of a single WaterCoin and the spot price of a single cubic meter of Water. While maintaining price stability of digital currencies through algorithmic purchase and sale may be appropriate in certain circumstances, and while it is possible as a technical matter to link such an algorithm to a programmed purchase and sale of Water assets, such an approach would be likely to result in (i) the decoupling of the number of WaterCoin in circulation from an approximately equivalent number of reserve cubic meters of Water, and a highly volatile stock of Water reserve assets adding unnecessary and avoidable transaction costs which would reduce the value of WaterCoin’s supporting Water reserve assets. Accordingly, it is expected that purchases and sales of WaterCoin and Water reserves to support price stability will be made on a periodic basis as the price of WaterCoin and the price of a single cubic meter of Water diverge by more than a specified margin.

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