dune-dollars

The goal of the project is to pilot the world’s first ever blockchain token for water conservation. This token will be called Dune Dollars (or Dune$). The purpose of Dune$ is to support the ongoing market transformation in making water conservation a way of life.

What

Prototyping the world’s first ever blockchain token for water conservation. This token will be called Dune Dollars (or Dune$). The purpose of Dune$ is to support the ongoing market transformation in making water conservation a way of life.

Recent research #1 and #2 supports ideas that water conservation is in part motivated by a series of monetary and non-monetary factors.

This behavioral economics research is encouragingly supported by a very large randomized controlled trial across over 400,000 free standing households in Cape Town, South Africa indicates evidence of water usage and its subsequent conservation is motivated by specific socio-economic interventions across the income spectrum.

The research finds that “lower income households respond only to financial incentives, whereas higher income households respond only to social incentives and appeals to their intrinsic motivation” when engaging in conservation behavior.

Furthermore, the research also finds that:

public recognition can be used as an adjunct to more traditional demand side management tools, such as water restrictions and tariff increases to achieve additional conservation in the higher income households.

Based on this evidence, we propose a blended approach that leverages mechanisms providing both financial and social incentives through the development of a digital token that operates on these main mechanisms:

1. Rewarding single family residential households who engage in water conservation behavior with a digital token.

2. A redemption of the token for other local government benefits such as transit passes or cash rebates.

3. A public recognition component that celebrates the top conserving households.

We call this token Dune$ and propose a pilot program for Dune$ that targets single family residential households and recognize sustainable water consumption at the household level.

The pilot includes developing creative collaborations that incentivize water efficiency. These incentives can include partnerships with:

• Other local government agencies by redeeming Dune$ for fast pass lane access, parking or public transit passes.

• Corporate social responsibility initiatives by redeeming Dune$ for special deals at Patagonia and other brands engaged in pro-environmental messaging or products.

• Civic minded celebrities by redeeming Dune$ for a gala that is attended by celebrities such as (Arnold Schwarzenegger, Kendall jenner).

These incentives will be developed as part of a stakeholder process and refined into a whitepaper (standard practice for new blockchain tokens). The whitepaper will also be used as the basis for developing a working prototype of Dune$ using the ethereum blockchain (or similar). The prototype will then be tested using live water usage data from water utilities and households that agree to participate in the experiment.

How

1. The first task is to develop a white paper clearly describing the principles and incentives for the Dune$ token. This whitepaper will build on ongoing CaDC research into what motivates water conservation. Research from behavioral economics will be incorporated to guide targeted messaging and marketing efforts around Dune$

2. The second task will involve developing a prototype digital token and associated smart contracts. We envision using the ERC20 standardized interface for the Ethereum blockchain. Token development platforms such as OST Kit can be used to quickly develop the Token and underlying mechanisms.The smart contract will work as follows:

   • Monthly water usage data from the CaDC partnership with X municipal water agencies will be used to develop a smart contract that programmatically issues Dune$ to every single eligible single family household household. At the end of each month the most efficient single family residential household water usage in each census block shall be issued Dune$.
   • We envision a period of 4 months to conduct this pilot over which time, the smart contract developed on top of household level water usage data will be used to issue the Dune$ token.
   • Efficiency here is defined as the percentage a household is under their residential water budget utilizing fifty five gallons per capita per day as a baseline for indoor consumption and 0.8 as the evapotranspiration adjustment factor for outdoor water usage.
   • Dune$ are pre-mined at some fixed value determined collaboratively by stakeholders. Every Dune$ transaction can be made visible on a publicly accessible blockchain. The primary purpose of implementing a digital token using smart contracts on top of a blockchain architecture is to send a signal of trust amongst the public. It would be important to communicate that the token being issued is based on the same data that is used to calculate their water bill and that the issuance of the token is based on clear principles.

3. A third task will involve Team ARGO integrating historical and current water usage data to the token prototype and issue Dune$ to each household identity. Each eligible single family household will be assigned a unique Dune$ identifier.

Tokens are anticipated to be redeemable for the following three types of incentives:

• Special city passes that enable holders of Dune$ to redeem their tokens for useful new urban activities. These include fast pass lane traveling, parking permits, bus pases or perhaps even as a rebate on state/local taxes.

• Special swag from corporate partners committed to supporting conservation sustainability. Holders of Dune$ could redeem their tokens for items offered at a discount by Patagonia for example, and other corporate donations.

• Public recognition through social media and special access to celebrity special events. For example lifting with Arnold Schwarzenegger, climbing with Alex Honnold, selfies with Kendall Jenner.

These are but starting categories and this pilot project will endeavor to develop other creative redemption mechanisms with conservation stakeholders.

So what?

Since we use historical water usage data, Team ARGO can issue Dune$ to households based on their existing conservation behavior and incentivise further conservation by having single family households across the income spectrum participate in accruing Dune$.

This experiment would also benefit local water retailers who will have a new innovative way to incentivize water conservation and develop an exciting new way to engage with their customers.

It is difficult to predict a priori the impact on water usage of this somewhat speculative application would have.We estimate water savings cost effectiveness ranging from $0.10 to $1000 per acre foot.