My motivation for the Development of the CWP Project
Why I started developing this project can be traced back to one event, namely the lockdown due to COVID. It was a very hectic period for us, but so different for the people around us. They were forced to stay home without the option to work remotely simply because the boss didn’t want them to. Workers had to give in because the situation was beyond their control. Even more surreal, many had their salaries cut because they didn’t work the hours, not because they didn’t want to work, but because the government forced them to stay home. No alignment between the enforcement by the government, which imposes the lockdown, and the employer, who does not pay because the employee does not show up. And then you hear the stories about all the support programs in the West; where were these programs for those who desperately need them?
Klaten, May 19, 2023 Author: YS Koen
My work experience as a commodity researcher and an interest in Blockchain technology led me to analyze the issues and try to come up with a solution. Thus I dove into the data; here in Klaten, Indonesia, more than 12 percent of the population lives on an income of less than $32 a month. We are talking about more than 100,000 citizens in this regency alone, and for the province of Central Java, that number is more than 3.5 million – staggering numbers. Maybe there was something to find in the public debate around UBI, but unfortunately, that is mainly a debate and does not provide a complete solution because it is incomplete.
Are there any other project formats than just a UBI, in whatever form, and of which there is, of course, enough data available? Yes, I need data to understand it. I want to be able to understand the workings and how it is structured to be able to judge whether something is good or whether it has defects that are insurmountable for the purpose. Unfortunately, there are plenty of those flaws in a system like UBI. In the research phase, I encountered a long-term project that awarded a significant cash sum using clear parameters for the group composition of beneficiaries. What was even better about the data was that they also measured the effects among an equal group of people who did not get selected as program beneficiaries. This last group knew about the project’s existence but didn’t become beneficiaries. Over a period longer than ten years, they analyzed both groups and processed the findings.
We were finally able to get started with that. It has been established from the start that there are several principles that the project must meet. The project must be a long-term project, and the beneficiaries must have control over the duration of their participation. The project must clearly state that it must be independent of external investments, donations, or other philanthropic funders after the start-up period. Members cannot register for the project; it is accessible by invitation only. Participation is only possible in groups, although the composition may differ per region or country. There should be no further restrictions on selecting members other than income-related; the project must have a positive effect, which is most achievable for the lower-income classes.
For example, the selection criteria set in Indonesia is that the average annual household income in a designated neighborhood may not exceed the country’s GDP (Nominal) per capita. This does not mean that households with an annual income higher than that GDP should be excluded from participation, as long as the average household income per year in that neighborhood community is below the GDP level of Indonesia. Therefore, households are offered participation in the CWP, not individual accounts, but family accounts. This may be different for other regions and countries. The local organization can submit a selection of criteria to the board of the CWP foundation; it is the board that ultimately decides whether a selection criterion is eligible for participation. If the decision is adverse, the board must indicate and publish a well-founded reason why those particular selection criteria do not qualify for participation.
In addition, we believe that the program should generate more than just money for its members. A support network and training center must be at the heart of operational activities to achieve this. Then, of course, also the groups-effect and not just individualistic. The expectation is that the group will keep each other in balance, support each other and take action together if one of the members threatens to go off track. Each member receives an individual budget and a joint group budget where they can provide temporary financing to local entrepreneurs. In addition, there will be a personal savings- and investment budget for the long term, with which the benefit recipient can ultimately create a financially firmer basis for himself and the family. What effect does that have if that financial security is there? Does that have a prolonged impact, for example, on health or employment? These are all things that need to be measured.
The way we start with the CWP has the advantage that the group members already know each other. They are residents who are already active with each other within their community. In Indonesia, there is the principle of Gotong Royong, where you jointly develop activities with all residents. Freely translated, Gotong Royong means together shoulder to shoulder, carrying the weight, lifting the burden together. We need this group effect through all layers of the project. What we are trying to achieve is that a whole network of close-knit communities will emerge, which in turn will be part of a more extensive community network, step by step. It could be geographic communities because of the neighborhood communities participating in the CWP. But communities don’t necessarily have to have geographic boundaries. So it can also be a community built around a specific token, work experience, or recreational characteristics. What will arise in this way is that a member of the project is part of multiple communities/ networks, creating an almost automatic system within which the different communities/networks can communicate with each other. Transactions will arise between the various networks, making the bonds between the multiple networks increasingly vital. Because each member has a presence in several sub-networks, you are also moving towards a model in which you may be unable to avoid conflicts between the different networks. Still, you will have an increased chance that those conflicts can be resolved more quickly because your fellow community member might have some involvement in the other network. Then you will also bring the Gotong Royong effect into the various network structures and their members who jointly bear the burden for the overall network.
The most important thing is that the different sub-networks continue communicating between them. An essential binder for this is the network economy. Because everyone benefits from a vibrant economy throughout the network, that economy will be the lifeline. There is already a steady foundation for an economy from the start. That basis will be provided by the CWP because, with every new member, there is automatically an amount added to that circulating economy, which may not be that large an amount with each added member, but with every 1,000 members, the CWP will bring an additional 8 million dollar-equivalent value into circulation in that economy. Maybe not impressive when you look at it at first glance, but its power will soon become apparent. In addition to what the members of the CWP can bring, the BDF also provides economic activities on the network. We must ensure that dollar-equivalent value continues circulating within the network economy as long as possible. Then try to realize how 100,000 or 1 million members, or the absolute target of 4 million members together, can impact the network economy. All CWP-member transaction activities are guaranteed to start within the network, and due to the nature of the CWP program, they are also forced to return every time. Not just withdrawing that value from the network and spending it in the fiat economy but also bringing it back into circulation on the network. The start and end point of every complete transaction by the members of the CWP is within the network. It is programmed that way, and if everyone is smart enough, it will always stay that way because it is precisely then that we can guarantee that everyone involved will fully benefit from participating in the network. Beneficial for the CWP members and token holders, companies within the Business Development Fund, and, yes, even the traders chasing a quick profit.
Then there was the question of how this system could ensure scaling without relying on external investors or other outside lenders every time. Because external parties will want to have a claim on the internal network economy. The quest for a reliable scaling solution was a significant cause of tremendous headaches, which is why it took so long to launch the project. Solutions for this problem had to be reliable; they should not enrich specific individuals. But how can we build a project that benefits everyone involved and scales without too many barriers? Unfortunately, I cannot go into details here about how the whole system is designed because those details should only be known to those directly involved. The biggest problem was that the project could not be built on quicksand. It must have a solid foundation and should be able to weather financial storms without getting too shattered. For most members of the CWP, this network becomes extremely important to build a healthy financial future. But that’s nice and sweet, but what about the interests of the token holders outside the CWP? You also want to give them the extra value of their involvement in the project.
This is where the DUO-Token model comes into play: a Utility token and a Community token. It is no gimmick; it serves the overall interest of the project. The main difference between the two tokens is that the community token does not contain a store-of-value feature. This makes it unattractive for speculative purposes. Exactly why this token is the perfect means to provide to the CWP members. For them, the journey through the project landscape begins with the Community token and ends with it; at least, that is the journey a transaction takes. A Routing designed by the project, but also an architectural tour de force that allows scaling solutions without unbalancing the value holdings among the members of the CWP. With a single-token model, you would automatically encourage this skewed growth. But that is not the single unique feature of the DUO-Token model; this allows the CWP members to not only sell the Utility token but also be a buyer of it. As a buyer of the Utility-token, they take Utility tokens out of circulation each time. That role with that transaction route means that the project internally provides the scaling solution, of course making use of the token trading market. The supply and demand market in the Utility token will contribute significantly to the membership growth of the CWP and thus ensure a growing community economy. At the same time, it provides a deflationary character to the circulation supply of Utility tokens.
It was not an easy task to design this project. In fact, it’s one of the greatest achievements I ever had to deliver. Others may laugh at it, but it was all-encompassing for me. The complexity involved in designing a project like this is enormous. More than 30 years of work experience came together in one project. That in itself caused a major sleeping problem. Much of my work experience in the financial sector was precisely about calculating and dealing with risk; in this project, we are dealing with a target group with zero risk tolerance. Stability and security are the most crucial issues for CWP members. At the same time, absolute stability makes the Utility token unattractive to trade, and when they become untradeable, it harms the interests of the Utility token holders. During the design phase, a feeling of uncertainty often overcame me. So many questions preoccupied my mind: Am I smart enough to do this? Can I handle all this? We have so much work ahead of us; what if it cannot be realized? Have all efforts been in vain, or are we chasing a mirage? And so forth.
Do we now have a project in its final design? No, a project like this will never reach a stadium of final design because the community will always grow, and the project has to adapt to that. But the framework of the project is standing, and in its current form, that is absolute if it’s up to me. In this format, the necessary security can be provided to the CWP members while at the same time providing the project with much-needed intrinsic value, which in turn ensures stability for the Utility token holders. More importantly, this project no longer needs external capital providers after the three calculated financing rounds. The project can grow independently without pressure from traditional markets’ economic/financial turmoil.
The project is far from finished, the construction phase is only now starting, but we are delivering a design that everyone involved will conclude has become gigantic in its form. We can’t solve the problem alone, but we start with every new member of the CWP; every time again, this project will have a real significant impact on everyone involved. I’ll release the project because it’s good enough; with this, we can deliver on all the promises and at least make a dent in the wealth gap.