Yaacov Shirazi, founder, Aqua Index
Aqua Index, a company founded in 2007 by high-tech entrepreneur and commodities expert Yaacov Shirazi, is working to reshape how the world values, prices, and trades water. With a recently signed Memorandum of Understanding (MoU) with DMCC in Dubai, the company is positioning the UAE as a hub for a new frontier in environmental finance: water tokenisation.
Shirazi, who holds over 700 approved patent claims covering water pricing algorithms and blockchain-based trading systems, says Aqua Index’s core innovation lies in its ability to transform both virtual and physical water into a structured asset class.
“At Aqua Index, we’ve developed two foundational technologies. The first transforms virtual water, embedded in agricultural commodities, into a financial benchmark,” he said. “Given that over 70 percent of the world’s freshwater is used in agriculture, we extract a water index price by analysing international commodity futures, each product’s water footprint, its wet mass, and yield efficiency.”
This proprietary process produces a virtual water index, much like the S&P 500, which can then be used to create structured financial products and debt instruments.
The company’s second core innovation is physical water tokenisation. “We’ve patented the ability to assign a financial instrument to localised water sources based on verified quality metrics, mineral composition, and regional utility,” said Shirazi. “These water-backed tokens are issued on blockchain and function much like warehouse certificates for gold, representing real-world, auditable reserves stored in aquifers or lakes.”
The tokens are tradable and, critically, redeemable. “Yes,” Shirazi confirmed. “Our first physical tokens are backed by water sourced from a regulated aquifer in Texas, which already supplies manufacturers and industrial users. Holders can redeem tokens by taking delivery at established distribution points where you simply connect your tanker and draw down your allocation.”
Market value and pricing dynamics
Aqua Index’s pricing model is built around standardised inputs. “We use globally recognised commodity prices and water usage metrics to derive regional and international benchmark indices,” he said. “These indices aggregate supply and demand variables through a weighted-average model, similar to how energy or food indices are constructed.”
Physical water tokens reflect more granular variables like source quality and infrastructure proximity. “While the index provides macro-level benchmarking, the token’s floating price will ultimately reflect real-time market dynamics and local scarcity, encouraging transparent price discovery and global liquidity,” he explained.
Read: DFSA’s Charlotte Robins on how its Tokenisation Sandbox is gaining traction
New trading infrastructure via DMCC
With the DMCC agreement in place, Aqua Index plans to help build a full water-trading ecosystem in Dubai.
“We are actively working with DMCC and Dubai-based regulated entities to set up the full ecosystem, which includes digital exchanges, custodians, brokers, and licensed trading platforms,” Shirazi said. “Liquidity will be enhanced through market-making arrangements, listing mechanisms, and eventually, the introduction of derivative contracts and structured products.”
He credits DMCC’s regulatory clarity and commodities infrastructure as key advantages. “The DMCC, under the visionary leadership of Ahmed bin Sulayem, is the world’s premier free zone for commodities and already houses infrastructure for trading metals, energy, and now water.”
Overcoming regulatory hurdles and enabling ESG finance
Tokenising a finite natural resource like water is not without challenges. “One of our main focus areas is meeting VARA’s (Virtual Assets Regulatory Authority) criteria for token issuers,” Shirazi said. “While we intend to become a licensed issuer, we may initially launch tokens via an existing regulated entity.”
Importantly, Aqua Index’s approach aligns with ESG frameworks. “Our model incentivises better water stewardship by recognising water as a valued, collateralised asset,” Shirazi noted. “It naturally encourages investment in conservation, infrastructure upgrades, and long-term water security—critical ESG goals for both private and public sectors.”
Adoption, hedging tools, and future roadmap
Initial adopters include commodity traders, institutional investors, and large-scale water consumers such as agriculture groups and manufacturers. “These entities seek efficient tools for hedging, cost control, and capital optimisation,” he said.
As the platform matures, Aqua Index aims to introduce a suite of risk mitigation products. “We are developing derivatives, insurance mechanisms, and contract pools, similar to how oil or electricity markets function,” said Shirazi. “Different tokens will represent different geographies, allowing users to choose exposure according to their risk tolerance.”
Looking ahead, Shirazi envisions a five-year roadmap that includes ETFs, sovereign bonds backed by water reserves, and tokenised debt instruments for infrastructure development. “Ultimately, our goal is to establish Aqua Index as the global benchmark for water trading, on par with what ICE or CME represents for traditional commodities.”
Global vision, regional commitment
Although its operations are based in Dubai, Aqua Index is pursuing global partnerships with governments, utilities, WaterTech firms, and NGOs. “We’re engaging with stakeholders across North America, Latin America, South Asia, and the MENA region,” Shirazi said. “In addition to our core financial products, Aqua Index will support initiatives in education, water purification, and equitable access.”
He concluded, “We believe the time has come to assign water its rightful place in the global financial system as a tradeable, collateralised, and transparent commodity. Our mission is to provide the tools, platforms, and governance models to make this a reality, starting from the UAE and expanding globally.”
