Avoiding overcompensation

To avoid overcompensation, the Protocol keeps track of the total compensation that has been made for every individual asset. The amount of value replaced over the lifetime of a Project is limited to the same initial price of the Project.

The Protocol will keep track of the accumulated value used to purchase pWatts to compensate for depreciation. Under normal circumstances, the sum of all negative Project value variations will equal the initial investment amount for originating the asset, and the last depreciation compensation event will occur in the last month of operation of the Project. However, strong or unexpected variations on energy prices or macroeconomic conditions could make the asset increase its value over time and make the sum of the negative variations exceed the initial investment amount. The depreciation compensation mechanism limits the total compensation amount of every project to the Project’s initial value.

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