Secured Smart Water Resource Management: An Incentive-Based Blockchain Use Case

Abstract

Water usage serves as a key factor in boosting groundwater levels, alleviating water scarcity, and enhancing sustainable farming practices. Yet, ineffective oversight and accountability among stakeholders often undermine water resource management (WRM). To address this issue, we introduce a framework called S2WRM, which integrates a dual strategy: a game theory-based method and a blockchain-based system. In the game theory component, we apply a Stackelberg game, positioning the Water Resource Management Authority (WRMA) as the leader and industrialists and farmers as followers. Through this sequential game, dynamic pricing is determined as the leader establishes pricing strategies across various scenarios, analyzing usage trends to boost WRMA revenue. In addition, a blockchain incentive system is implemented, using ERC-20 contracts to mint and distribute tokens as rewards. This blockchain framework is built on the Ethereum platform, with Stackelberg simulations coded in Python. Analysis of different scenarios reveals key insights: first, blockchain-based incentives improve consumption oversight, fostering transparency in stakeholder supply chains second, WRMA revenue rises as blockchain reduces overhead costs tied to dynamic pricing and third, sustainability is advanced through token limits and penalties.