Since this is the first case-study being published, we’ll draw attention to the underlying patterns in order to highlight the underlying dynamics and system conditions we aim to tap into with the protocol.
Context
Hub network allocates funding to event , hosted by hub . This event forms teams. The hub decides, by its own governance processes, how much funding each team should receive, . One of those teams is BinToCash.
From the hub-network perspective, this allocation looks like
BinToCash
BinToCash is a project that formed during an action-learning journey in Accra. This team formed in response to the purpose of addressing urban flooding, which disrupts many local economies and causes huge damage to private assets (peoples’ belongings). Drain blockages were identified as the root cause of the flooding, caused by trash being thrown onto the street, which then gets washed into drains. They realised that in order to shift this pattern, they needed to create a way for the general public to value these materials, instead of discarding them thoughtlessly. By observing their local systems, they derived a way to coordinate three stakeholder types in one participatory waste collection system. The concept was to incentivize household members to sort their waste, which waste collectors (already a strong informal economy) could pick up and deliver to waste processors. These materials are used for products made of recycled materials. In order to initiate this system, they would work on local partnerships with recycling plants, with the value proposition of better quality materials for use in their products, which come from a result of better sorted/ less polluted material retrievals. With this supply, those recycling companies could either charge more for their products, produce higher volumes, or aim for more government subsidies to grow their operations. BinToCash would participate in these gains. What was needed was the coordination system. In the space of one week, they developed a prototype to coordinate this workflow, at key point of exchange between the different stakeholders. These exchange points would also become the point at which to implement a smart contract for verifiable measurements of weightage of trash processed. Exchanges would generate currency, and currency could be redeemed at the end of each month for cash. The recycling companies would finance the monthly fund distribution.
Pre-Financing
In order to develop this coordination system, this project requires $10,000 to develop a prototype to secure a pilot contract with their first local partner.
Fortunately, Hub decides this is a worth allocation of their funding.
| 2024 | 2025 | 2026 | 2027 | |
|---|---|---|---|---|
| Cumulative Investment | $10,000 | $10,000 | $10,000 | $10,000 |
| Local Demand | $0 | $5,000 | $25,000 | $55,000 |
| Fund Value | $10,000 | $15,000 | $35,000 | $65,000 |
| Weightage | 0kg | 10kg | 100kg | 300kg |
| Currency Supply, | 0 | 6000 | 40000 | 50000 |
| Currency Value /kg | n/a | $0.83 | $0.625 | $1.1 |
| A single 10k to 1.10/kg, and the founding investor holds a reserve stake in a fund that is now 6.5x its original size. |
Dividends
As we can see in this example, with the pre-financing, BinToCash are able to grow the local verified trash-organising economy from an initial zero actions (measured in weightage), to 1000kg, which in turn generated 10,000 units of their currency . A portion of all currency is allocated to a reserve/ treasury. Interfacing with the protocol gateway, these funders can redeem their stake in this economy, from after 3 years, receiving a payout in the form of reserve liquidation (ideally in tranches).
Protocol
As one project from a hub network, the sell to the investor is that this is one stake in a portfolio of local action-backed economies. They are able to participate in 12 variations of growing local economies, timing their redemptions in a way that balances investor returns with ecosystem stability.