diff --git a/app/app.go b/app/app.go
index 0b8fb6d2e3..b783ea5c6c 100644
--- a/app/app.go
+++ b/app/app.go
@@ -65,7 +65,7 @@ func (app *Basecoin) SetOption(key string, value string) string {
 	} else {
 		// Set option on basecoin
 		switch key {
-		case "chainID":
+		case "chain_id":
 			app.state.SetChainID(value)
 			return "Success"
 		case "account":
@@ -75,7 +75,8 @@ func (app *Basecoin) SetOption(key string, value string) string {
 				return "Error decoding acc message: " + err.Error()
 			}
 			app.state.SetAccount(acc.PubKey.Address(), &acc)
-			log.Info("SetAccount", "addr", acc.PubKey.Address(), "acc", acc)
+			log.Notice("SetAccount", "addr", acc.PubKey.Address(), "acc", acc)
+
 			return "Success"
 		}
 		return "Unrecognized option key " + key
diff --git a/app/genesis.go b/app/genesis.go
index afa94ecab3..8f96aa8bc9 100644
--- a/app/genesis.go
+++ b/app/genesis.go
@@ -2,18 +2,32 @@ package app
 
 import (
 	"encoding/json"
+	"fmt"
 
 	"github.com/pkg/errors"
+	"github.com/tendermint/basecoin/types"
 	cmn "github.com/tendermint/go-common"
+	"github.com/tendermint/go-wire"
+	tmtypes "github.com/tendermint/tendermint/types"
 )
 
 func (app *Basecoin) LoadGenesis(path string) error {
-	kvz, err := loadGenesis(path)
+	tmDoc, appDoc, err := loadGenesis(path)
 	if err != nil {
 		return err
 	}
-	for _, kv := range kvz {
-		app.SetOption(kv.Key, kv.Value)
+	fmt.Println("TMGendoc", tmDoc)
+	fmt.Println("AppGendoc", appDoc)
+
+	app.SetOption("base/chain_id", appDoc.ChainID)
+	for _, acc := range appDoc.Accounts {
+		accBytes, err := json.Marshal(acc)
+		if err != nil {
+			return err
+		}
+		r := app.SetOption("base/account", string(accBytes))
+		// TODO: SetOption returns an error
+		log.Notice("SetOption", "result", r)
 	}
 	return nil
 }
@@ -23,16 +37,37 @@ type keyValue struct {
 	Value string `json:"value"`
 }
 
-func loadGenesis(filePath string) (kvz []keyValue, err error) {
-	kvz_ := []json.RawMessage{}
+// includes tendermint (in the json, we ignore here)
+type FullGenesisDoc struct {
+	AppOptions *GenesisDoc `json:"app_options"`
+}
+
+type GenesisDoc struct {
+	ChainID  string          `json:"chain_id"`
+	Accounts []types.Account `json:"accounts"`
+}
+
+func loadGenesis(filePath string) (*tmtypes.GenesisDoc, *GenesisDoc, error) {
 	bytes, err := cmn.ReadFile(filePath)
 	if err != nil {
-		return nil, errors.Wrap(err, "loading genesis file")
+		return nil, nil, errors.Wrap(err, "loading genesis file")
 	}
-	err = json.Unmarshal(bytes, &kvz_)
+
+	tmGenesis := new(tmtypes.GenesisDoc)
+	appGenesis := new(FullGenesisDoc)
+
+	// the tendermint genesis is go-wire
+	err = wire.ReadJSONBytes(bytes, tmGenesis)
+
+	// the basecoin genesis go-data :)
+	err = json.Unmarshal(bytes, appGenesis)
 	if err != nil {
-		return nil, errors.Wrap(err, "parsing genesis file")
+		return nil, nil, errors.Wrap(err, "unmarshaling genesis file")
 	}
+	return tmGenesis, appGenesis.AppOptions, nil
+}
+
+func parseGenesisList(kvz_ []json.RawMessage) (kvz []keyValue, err error) {
 	if len(kvz_)%2 != 0 {
 		return nil, errors.New("genesis cannot have an odd number of items.  Format = [key1, value1, key2, value2, ...]")
 	}
diff --git a/cmd/commands/init.go b/cmd/commands/init.go
index 9d44167e46..695220445c 100644
--- a/cmd/commands/init.go
+++ b/cmd/commands/init.go
@@ -2,14 +2,11 @@ package commands
 
 import (
 	"io/ioutil"
-	"os"
 	"path"
 
 	"github.com/urfave/cli"
 
 	cmn "github.com/tendermint/go-common"
-	tmcfg "github.com/tendermint/tendermint/config/tendermint"
-	types "github.com/tendermint/tendermint/types"
 )
 
 var InitCmd = cli.Command{
@@ -25,44 +22,22 @@ var InitCmd = cli.Command{
 }
 
 func cmdInit(c *cli.Context) error {
-	basecoinDir := BasecoinRoot("")
-	tmDir := path.Join(basecoinDir, "tendermint")
+	rootDir := BasecoinRoot("")
 
-	// initalize tendermint
-	tmConfig := tmcfg.GetConfig(tmDir)
-
-	privValFile := tmConfig.GetString("priv_validator_file")
-	if _, err := os.Stat(privValFile); os.IsNotExist(err) {
-		privValidator := types.GenPrivValidator()
-		privValidator.SetFile(privValFile)
-		privValidator.Save()
-
-		genFile := tmConfig.GetString("genesis_file")
-
-		if _, err := os.Stat(genFile); os.IsNotExist(err) {
-			genDoc := types.GenesisDoc{
-				ChainID: cmn.Fmt("test-chain-%v", cmn.RandStr(6)),
-			}
-			genDoc.Validators = []types.GenesisValidator{types.GenesisValidator{
-				PubKey: privValidator.PubKey,
-				Amount: 10,
-			}}
-
-			genDoc.SaveAs(genFile)
-		}
-		log.Notice("Initialized Tendermint", "genesis", tmConfig.GetString("genesis_file"), "priv_validator", tmConfig.GetString("priv_validator_file"))
-	} else {
-		log.Notice("Already initialized Tendermint", "priv_validator", tmConfig.GetString("priv_validator_file"))
-	}
+	cmn.EnsureDir(rootDir, 0777)
 
 	// initalize basecoin
-	genesisFile := path.Join(basecoinDir, "genesis.json")
-	key1File := path.Join(basecoinDir, "key.json")
-	key2File := path.Join(basecoinDir, "key2.json")
+	genesisFile := path.Join(rootDir, "genesis.json")
+	privValFile := path.Join(rootDir, "priv_validator.json")
+	key1File := path.Join(rootDir, "key.json")
+	key2File := path.Join(rootDir, "key2.json")
 
 	if err := ioutil.WriteFile(genesisFile, []byte(genesisJSON), 0644); err != nil {
 		return err
 	}
+	if err := ioutil.WriteFile(privValFile, []byte(privValJSON), 0400); err != nil {
+		return err
+	}
 	if err := ioutil.WriteFile(key1File, []byte(key1JSON), 0400); err != nil {
 		return err
 	}
@@ -75,21 +50,53 @@ func cmdInit(c *cli.Context) error {
 	return nil
 }
 
-const genesisJSON = `[
-  "base/chainID", "test_chain_id",
-  "base/account", {
-    "pub_key": {
-      "type": "ed25519",
-      "data": "619D3678599971ED29C7529DDD4DA537B97129893598A17C82E3AC9A8BA95279"
-    },
-    "coins": [
-    	{
-    	  "denom": "mycoin",
-    	  "amount": 9007199254740992
-    	}
-    ]
+const privValJSON = `{
+	"address": "7A956FADD20D3A5B2375042B2959F8AB172A058F",
+	"last_height": 0,
+	"last_round": 0,
+	"last_signature": null,
+	"last_signbytes": "",
+	"last_step": 0,
+	"priv_key": [
+		1,
+		"D07ABE82A8B15559A983B2DB5D4842B2B6E4D6AF58B080005662F424F17D68C17B90EA87E7DC0C7145C8C48C08992BE271C7234134343E8A8E8008E617DE7B30"
+	],
+	"pub_key": [
+		1,
+		"7B90EA87E7DC0C7145C8C48C08992BE271C7234134343E8A8E8008E617DE7B30"
+	]
+}`
+
+const genesisJSON = `{
+  "app_hash": "",
+  "chain_id": "test-chain-Ppk1h3",
+  "genesis_time": "0001-01-01T00:00:00.000Z",
+  "validators": [
+    {
+      "amount": 10,
+      "name": "",
+      "pub_key": [
+	1,
+	"7B90EA87E7DC0C7145C8C48C08992BE271C7234134343E8A8E8008E617DE7B30"
+      ]
+    }
+  ],
+  "app_options": {
+    "chain_id": "test_chain_id",
+    "accounts": [{
+      "pub_key": {
+        "type": "ed25519",
+        "data": "619D3678599971ED29C7529DDD4DA537B97129893598A17C82E3AC9A8BA95279"
+      },
+      "coins": [
+        {
+          "denom": "mycoin",
+          "amount": 9007199254740992
+        }
+      ]
+    }]
   }
-]`
+}`
 
 const key1JSON = `{
 	"address": "1B1BE55F969F54064628A63B9559E7C21C925165",
diff --git a/cmd/commands/reset.go b/cmd/commands/reset.go
index 693e6107ee..d9688fd859 100644
--- a/cmd/commands/reset.go
+++ b/cmd/commands/reset.go
@@ -21,7 +21,7 @@ var UnsafeResetAllCmd = cli.Command{
 
 func cmdUnsafeResetAll(c *cli.Context) error {
 	basecoinDir := BasecoinRoot("")
-	tmDir := path.Join(basecoinDir, "tendermint")
+	tmDir := path.Join(basecoinDir)
 	tmConfig := tmcfg.GetConfig(tmDir)
 
 	// Get and Reset PrivValidator
@@ -41,12 +41,7 @@ func cmdUnsafeResetAll(c *cli.Context) error {
 	// Remove all tendermint data
 	tmDataDir := tmConfig.GetString("db_dir")
 	os.RemoveAll(tmDataDir)
-	log.Notice("Removed Tendermint data", "dir", tmDataDir)
-
-	// Remove all basecoin data
-	basecoinDataDir := path.Join(basecoinDir, "merkleeyes.db")
-	os.RemoveAll(basecoinDataDir)
-	log.Notice("Removed Basecoin data", "dir", basecoinDataDir)
+	log.Notice("Removed all data", "dir", tmDataDir)
 
 	return nil
 }
diff --git a/cmd/commands/start.go b/cmd/commands/start.go
index f9867e86c6..97946384a3 100644
--- a/cmd/commands/start.go
+++ b/cmd/commands/start.go
@@ -56,7 +56,7 @@ func cmdStart(c *cli.Context) error {
 	// Connect to MerkleEyes
 	var eyesCli *eyes.Client
 	if c.String("eyes") == "local" {
-		eyesCli = eyes.NewLocalClient(path.Join(basecoinDir, "merkleeyes.db"), EyesCacheSize)
+		eyesCli = eyes.NewLocalClient(path.Join(basecoinDir, "data", "merkleeyes.db"), EyesCacheSize)
 	} else {
 		var err error
 		eyesCli, err = eyes.NewClient(c.String("eyes"))
@@ -117,7 +117,7 @@ func startBasecoinABCI(c *cli.Context, basecoinApp *app.Basecoin) error {
 
 func startTendermint(dir string, basecoinApp *app.Basecoin) {
 	// Get configuration
-	tmConfig := tmcfg.GetConfig(path.Join(dir, "tendermint"))
+	tmConfig := tmcfg.GetConfig(dir)
 
 	// logger.SetLogLevel("notice") //config.GetString("log_level"))
 
diff --git a/demo/clean.sh b/demo/clean.sh
index e2d519337d..e39f090eec 100644
--- a/demo/clean.sh
+++ b/demo/clean.sh
@@ -1,13 +1,10 @@
 #! /bin/bash
 
 killall -9 basecoin tendermint
-TMROOT=./data/chain1/tendermint tendermint unsafe_reset_all
-TMROOT=./data/chain2/tendermint tendermint unsafe_reset_all
-
-rm -rf ./data/chain1/basecoin/merkleeyes.db
-rm -rf ./data/chain2/basecoin/merkleeyes.db
+TMROOT=./data/chain1 tendermint unsafe_reset_all
+TMROOT=./data/chain2 tendermint unsafe_reset_all
 
 rm ./*.log
 
-rm ./data/chain1/tendermint/*.bak
-rm ./data/chain2/tendermint/*.bak
+rm ./data/chain1/*.bak
+rm ./data/chain2/*.bak
diff --git a/demo/data/chain1/basecoin/genesis.json b/demo/data/chain1/basecoin/genesis.json
deleted file mode 100644
index 588fc86f4f..0000000000
--- a/demo/data/chain1/basecoin/genesis.json
+++ /dev/null
@@ -1,15 +0,0 @@
-[
-  "base/chainID", "test_chain_1",
-  "base/account", {
-    "pub_key": {
-      "type": "ed25519",
-      "data": "B3588BDC92015ED3CDB6F57A86379E8C79A7111063610B7E625487C76496F4DF"
-    },
-    "coins": [
-    	{
-    	  "denom": "mycoin",
-    	  "amount": 9007199254740992
-    	}
-    ]
-  }
-]
diff --git a/demo/data/chain1/tendermint/config.toml b/demo/data/chain1/config.toml
similarity index 100%
rename from demo/data/chain1/tendermint/config.toml
rename to demo/data/chain1/config.toml
diff --git a/demo/data/chain1/genesis.json b/demo/data/chain1/genesis.json
new file mode 100644
index 0000000000..4b9ab3079a
--- /dev/null
+++ b/demo/data/chain1/genesis.json
@@ -0,0 +1,32 @@
+{
+  "app_hash": "",
+  "chain_id": "test_chain_1",
+  "genesis_time": "0001-01-01T00:00:00.000Z",
+  "validators": [
+    {
+      "amount": 10,
+      "name": "",
+      "pub_key": [
+        1,
+        "D6EBB92440CF375054AA59BCF0C99D596DEEDFFB2543CAE1BA1908B72CF9676A"
+      ]
+    }
+  ],
+  "app_options": {
+    "chain_id": "test_chain_1",
+    "accounts": [
+      {
+        "pub_key": {
+          "type": "ed25519",
+          "data": "B3588BDC92015ED3CDB6F57A86379E8C79A7111063610B7E625487C76496F4DF"
+        },
+        "coins": [
+          {
+            "denom": "mycoin",
+            "amount": 9007199254740992
+          }
+        ]
+      }
+    ]
+  }
+}
diff --git a/demo/data/chain1/basecoin/key.json b/demo/data/chain1/key.json
similarity index 100%
rename from demo/data/chain1/basecoin/key.json
rename to demo/data/chain1/key.json
diff --git a/demo/data/chain1/tendermint/priv_validator.json b/demo/data/chain1/priv_validator.json
similarity index 100%
rename from demo/data/chain1/tendermint/priv_validator.json
rename to demo/data/chain1/priv_validator.json
diff --git a/demo/data/chain1/tendermint/genesis.json b/demo/data/chain1/tendermint/genesis.json
deleted file mode 100644
index 91830dd23f..0000000000
--- a/demo/data/chain1/tendermint/genesis.json
+++ /dev/null
@@ -1,15 +0,0 @@
-{
-	"app_hash": "",
-	"chain_id": "test_chain_1",
-	"genesis_time": "0001-01-01T00:00:00.000Z",
-	"validators": [
-		{
-			"amount": 10,
-			"name": "",
-			"pub_key": [
-				1,
-				"D6EBB92440CF375054AA59BCF0C99D596DEEDFFB2543CAE1BA1908B72CF9676A"
-			]
-		}
-	]
-}
diff --git a/demo/data/chain2/basecoin/genesis.json b/demo/data/chain2/basecoin/genesis.json
deleted file mode 100644
index 05df04be5a..0000000000
--- a/demo/data/chain2/basecoin/genesis.json
+++ /dev/null
@@ -1,15 +0,0 @@
-[
-  "base/chainID", "test_chain_2",
-  "base/account", {
-    "pub_key": {
-      "type": "ed25519",
-      "data": "0628C8E6C2D50B15764B443394E06C6A64F3082CE966A2A8C1A55A4D63D0FC5D"
-    },
-    "coins": [
-    	{
-    	  "denom": "mycoin",
-    	  "amount": 9007199254740992
-    	}
-    ]
-  }
-]
diff --git a/demo/data/chain2/tendermint/config.toml b/demo/data/chain2/config.toml
similarity index 100%
rename from demo/data/chain2/tendermint/config.toml
rename to demo/data/chain2/config.toml
diff --git a/demo/data/chain2/genesis.json b/demo/data/chain2/genesis.json
new file mode 100644
index 0000000000..2079970346
--- /dev/null
+++ b/demo/data/chain2/genesis.json
@@ -0,0 +1,32 @@
+{
+  "app_hash": "",
+  "chain_id": "test_chain_2",
+  "genesis_time": "0001-01-01T00:00:00.000Z",
+  "validators": [
+    {
+      "amount": 10,
+      "name": "",
+      "pub_key": [
+        1,
+        "9A76DDE4CA4EE660C073D288DBE4F8A128F23857881A95F18167682D47E7058F"
+      ]
+    }
+  ],
+  "app_options": {
+    "chain_id": "test_chain_2",
+    "accounts": [
+      {
+        "pub_key": {
+          "type": "ed25519",
+          "data": "0628C8E6C2D50B15764B443394E06C6A64F3082CE966A2A8C1A55A4D63D0FC5D"
+        },
+        "coins": [
+          {
+            "denom": "mycoin",
+            "amount": 9007199254740992
+          }
+        ]
+      }
+    ]
+  }
+}
diff --git a/demo/data/chain2/basecoin/key.json b/demo/data/chain2/key.json
similarity index 100%
rename from demo/data/chain2/basecoin/key.json
rename to demo/data/chain2/key.json
diff --git a/demo/data/chain2/tendermint/priv_validator.json b/demo/data/chain2/priv_validator.json
similarity index 100%
rename from demo/data/chain2/tendermint/priv_validator.json
rename to demo/data/chain2/priv_validator.json
diff --git a/demo/data/chain2/tendermint/genesis.json b/demo/data/chain2/tendermint/genesis.json
deleted file mode 100644
index 6c9f17c952..0000000000
--- a/demo/data/chain2/tendermint/genesis.json
+++ /dev/null
@@ -1,15 +0,0 @@
-{
-	"app_hash": "",
-	"chain_id": "test_chain_2",
-	"genesis_time": "0001-01-01T00:00:00.000Z",
-	"validators": [
-		{
-			"amount": 10,
-			"name": "",
-			"pub_key": [
-				1,
-				"9A76DDE4CA4EE660C073D288DBE4F8A128F23857881A95F18167682D47E7058F"
-			]
-		}
-	]
-}
diff --git a/demo/start.sh b/demo/start.sh
index 412f23d8b4..bfc6872350 100644
--- a/demo/start.sh
+++ b/demo/start.sh
@@ -62,13 +62,13 @@ function waitForBlock() {
 
 # make basecoin root vars
 export BCHOME="."
-BCHOME1="./data/chain1/basecoin"
-BCHOME2="./data/chain2/basecoin"
+BCHOME1="./data/chain1"
+BCHOME2="./data/chain2"
 
 # grab the chain ids
-CHAIN_ID1=$(cat $BCHOME1/genesis.json | jq .[1])
+CHAIN_ID1=$(cat $BCHOME1/genesis.json | jq .chain_id)
 CHAIN_ID1=$(removeQuotes $CHAIN_ID1)
-CHAIN_ID2=$(cat $BCHOME2/genesis.json | jq .[1])
+CHAIN_ID2=$(cat $BCHOME2/genesis.json | jq .chain_id)
 CHAIN_ID2=$(removeQuotes $CHAIN_ID2)
 echo "CHAIN_ID1: $CHAIN_ID1"
 echo "CHAIN_ID2: $CHAIN_ID2"
@@ -82,11 +82,11 @@ echo ""
 echo "... starting chains"
 echo ""
 # start the first node
-TMROOT=./data/chain1/tendermint tendermint node --skip_upnp --log_level=info &> $LOG_DIR/chain1_tendermint.log &
+TMROOT=./data/chain1 tendermint node --skip_upnp --log_level=info &> $LOG_DIR/chain1_tendermint.log &
 BCHOME=$BCHOME1 basecoin start --without-tendermint &> $LOG_DIR/chain1_basecoin.log &
 
 # start the second node
-TMROOT=./data/chain2/tendermint tendermint node --skip_upnp --log_level=info --node_laddr tcp://localhost:36656 --rpc_laddr tcp://localhost:36657 --proxy_app tcp://localhost:36658 &> $LOG_DIR/chain2_tendermint.log &
+TMROOT=./data/chain2 tendermint node --skip_upnp --log_level=info --node_laddr tcp://localhost:36656 --rpc_laddr tcp://localhost:36657 --proxy_app tcp://localhost:36658 &> $LOG_DIR/chain2_tendermint.log &
 BCHOME=$BCHOME2 basecoin start --address tcp://localhost:36658 --without-tendermint &> $LOG_DIR/chain2_basecoin.log &
 
 echo ""
@@ -103,7 +103,7 @@ sleep 3
 echo "... registering chain1 on chain2"
 echo ""
 # register chain1 on chain2
-basecoin tx ibc --amount 10mycoin $CHAIN_FLAGS2 register --chain_id $CHAIN_ID1 --genesis ./data/chain1/tendermint/genesis.json
+basecoin tx ibc --amount 10mycoin $CHAIN_FLAGS2 register --chain_id $CHAIN_ID1 --genesis ./data/chain1/genesis.json
 
 echo ""
 echo "... creating egress packet on chain1"