The Cannon Coin Trial
Updated: Jul 10
In 2020 we were accepted into the Creative HQ Govtech accelerator program which among other things gave us the opportunity to present some of the early concepts at Demo at at the New Zealand Parliament. Although the concept was very well received we struggled to achieve funding from government or corporate sources. Wesley Community Action and Ngati Toa kindly provided us with some initial funding which we combined with help from a significant number of motivated volunteers and organisations to run a limited trial in a low socio-economic region of Cannons Creek north of Wellington.
We set up a stakeholder advisory board consisting of:
Mark Pascall (The Wellbeing Protocol)
David Hanna (Director of Wesley Community Action)
Helmut Modlik (CEO and Executive Director of Ngati Toa Rangatira)
Mark Dalton (International Development & Digital Transformation at the United Nations)
This group met up every week for the duration of the project.
Applying Agile and Lean Startup philosophies we wanted the trial to help us validate some of our assumptions and gather information. A core component of the project was a digital wallet that holds tokens that represent some kind of value. In the future tokens could represent many things (e.g. reputation, voting rights, community equity etc), however, for the trial we wanted to keep things as simple as possible and have it represent an alternative currency which was named (in consultation with the community) the Cannon Coin. Some of the areas we were hoping to explore were:
Would the technology work in a low-socioeconomic area (e.g. do people have modern enough smartphones and data to run a digital wallet app)?
Could we design a “minimum viable product” app that people easily understood?
How receptive to the big picture concept (and us) would the community be?
What are the best ways to engage with the community and the best “onboarding” approach?
Would the mainstream media pick up on the concept and could that wider public interest be used to help create momentum for the project?
So we ended up creating a cross platform (Apple/Android) app that had a basic digital wallet that allowed access to a new standards compliant (Ethereum ERC20 token on an Ethereum sidechain) that we named the Cannon Coin. The Cannon Coin was a Stable Coin (1 Cannon = NZ$1) in that for every Cannon Coin that we minted we held NZ$1 in a charity bank account (Wesley). We partnered with the Wesley Fruit and Vegetable co-op that produces a $12 box every week and we built a simple to use order process into the app. We also built in a basic proposal/voting system to allow anybody in the community to create and vote on community wellbeing projects (using a voting mechanism called quadratic voting).
We asked 50 people from the community to take part in the trial which ran for two months. At the beginning of the trial we issued 50 Cannon Coins (CAN) to each person in the trial (i.e. we had 50x50 = NZ$2,500 as a reserve in a bank account).
We also launched a public crowdfunding campaign that allowed anybody (outside the trial) to donate to the project. Each NZ$ we received (and went into the Wesley Charity bank account) we minted a Cannon coin. We raised about NZ$1,500 (i.e. 1,500 CANS minted and put in the community fund).
The app allowed people to use their Cannon Coin in four ways:
Purchase a fruit and vege box from the Porirua Fruit and Vege Co-op (1 Box = 12 CAN - normally $12 NZD)
Transact between themselves (similar to the current timebank)
Contribute to the community fund (knowing they will get an opportunity to have a say on where the funds go)
At the end of the trial people would be able to“cash-out” (i.e. convert their Cannon Coin to NZD). However, this transaction will incur a 50% “tax” to disincentive this (e.g. somebody wants to ‘cash-out’ 20 unspent CAN then they would receive $10 NZD in cash).
The app also allowed any community member to list a “wellbeing project”, (i.e. something that could be done to help the community) and vote on other peoples projects.
The concept was that Cannon coins would flow into the community fund (either from individuals on the trial or from the wider public crowd funding campaign). Then a small group from the community would decide to allocate community funds (in CANs) to the people leading the wellbeing projects that were most popular (and appropriate) thus increasing the number of CANs in circulation and incentivising wellbeing projects.
We ran numerous community meetings prior and during the trial to engage, build relationships and get feedback from the community. We created a video to explain the trial to potential contributors.
We were excited to see that the trial captured the general public's imagination with coverage across all NZ mainstream media, e.g
Multiple Radio Stations including National Radio
Local and National Newspapers (print and online): Stuff
National Business press: BusinessDesk
Financial Podcast: NZ Investor Today
All the exposure created significant brand recognition for the project and interest from many other communities around New Zealand about the possibility of applying the concepts to their community. This included Raglan Community Board, Ngati Toa, The Far North District Council and The Devonport Peninsula Trust.
Learnings from the trial
It’s fair to say that at the start we didn’t know what we didn’t know. For example we knew very little about the community and if/how the technology would work. With the very limited resources we had, we always knew there would be limitations on what we could achieve.
Some of the key learnings:
It was vital to build relationships with some key organisations in the community. Quite rightly there was considerable scepticism from the community (i.e. people from outside the community proposing a technological solution) so our decision to partner with existing community based organisations (Wesley and Ngati Toa) was very important. Even with those relationships we had to invest considerable time building trust with the community. Having members of the community actively involved in the governance process was also vital.
Relationship building takes time. There was an ongoing but manageable tension around the pace of the project, i.e. blending the high paced world of agile software development (e.g. 2 week sprint cycles etc) with the relationship building with a disadvantaged and often under stress community. Getting people to turn up to meetings was a constant challenge.
The technology worked very well. We believe we made some good technology decisions early on that helped to build an effective product. The general feedback was that we created something that was very intuitive / easy to use. We had very few problems with older devices. Transaction times were around 2 seconds, with negligible transaction costs.
We needed more resources and time. Our key partner was Wesley Community Action and we agreed with them at the outset that we would limit the trial to 2 months and limit the scope of the trial (i.e. only one shop and no economic stimulation events). Creating an economy relies on the network effect (like a phone network this is the phenomenon whereby the value of a system is proportional to the number of people using the system). Having 50 users and one shop in a population of 10k in Cannons Creek did not give us the density of users to create enough value (and organically attract more members and transactions). We didn’t have the time or resources to manually stimulate the economy within the trial period.
Having a well respected community member as part of the team was vital in building trust with the community
The partnership with Wesley, whilst vital for that part of the project did reduce our ability to innovate and react to learnings during the trial (i.e. a larger decision making group and at times unavailability of key people)
As the trial progressed more community members began to see the potential. “Oh I could get together with Jan and we could offer the community singing lessons for CANs and then have a concert where we could charge CANs” or “we could use the community fund to build that bike track for the kids at the school”. We also saw a shift in perception of the Cannon coin with people beginning to see it as more of a “share” in their community (i.e. taking pride in owning it as they knew it was helping their community).
Before and during the trial we engaged with a number or relevant organisations to ensure legal/compliance risks were minimised. These included the Financial Markets Authority, The Reserve Bank, Law firm Minter Ellison and the Ministry of Social Development. These organisations were generally very supportive and we did not encounter any roadblocks, however, the consensus was that we need further conversations if the trial was to expand.
In hindsight possibly the most valuable outcome of the Cannon Coin trial was validation that the concept could capture the public imagination and get national publicity. This has given us the confidence that the conditions (time / place) are right to build a strong and loyal community to support the project.