diff --git a/examples/democoin/app/app.go b/examples/democoin/app/app.go
index 27ca7a1458..2ee79bd5bf 100644
--- a/examples/democoin/app/app.go
+++ b/examples/democoin/app/app.go
@@ -77,7 +77,7 @@ func NewDemocoinApp(logger log.Logger, dbs map[string]dbm.DB) *DemocoinApp {
 
 	// initialize BaseApp
 	app.SetTxDecoder(app.txDecoder)
-	app.SetInitChainer(app.initChainerFn(coolKeeper))
+	app.SetInitChainer(app.initChainerFn(coolKeeper, powKeeper))
 	app.MountStoreWithDB(app.capKeyMainStore, sdk.StoreTypeIAVL, dbs["main"])
 	app.MountStoreWithDB(app.capKeyAccountStore, sdk.StoreTypeIAVL, dbs["acc"])
 	app.MountStoreWithDB(app.capKeyPowStore, sdk.StoreTypeIAVL, dbs["pow"])
@@ -151,7 +151,7 @@ func (app *DemocoinApp) txDecoder(txBytes []byte) (sdk.Tx, sdk.Error) {
 }
 
 // custom logic for democoin initialization
-func (app *DemocoinApp) initChainerFn(coolKeeper cool.Keeper) sdk.InitChainer {
+func (app *DemocoinApp) initChainerFn(coolKeeper cool.Keeper, powKeeper pow.Keeper) sdk.InitChainer {
 	return func(ctx sdk.Context, req abci.RequestInitChain) abci.ResponseInitChain {
 		stateJSON := req.AppStateBytes
 
@@ -172,7 +172,13 @@ func (app *DemocoinApp) initChainerFn(coolKeeper cool.Keeper) sdk.InitChainer {
 		}
 
 		// Application specific genesis handling
-		err = coolKeeper.InitGenesis(ctx, stateJSON)
+		err = coolKeeper.InitGenesis(ctx, genesisState.CoolGenesis)
+		if err != nil {
+			panic(err) // TODO https://github.com/cosmos/cosmos-sdk/issues/468
+			//	return sdk.ErrGenesisParse("").TraceCause(err, "")
+		}
+
+		err = powKeeper.InitGenesis(ctx, genesisState.PowGenesis)
 		if err != nil {
 			panic(err) // TODO https://github.com/cosmos/cosmos-sdk/issues/468
 			//	return sdk.ErrGenesisParse("").TraceCause(err, "")
diff --git a/examples/democoin/app/app_test.go b/examples/democoin/app/app_test.go
index 74b789bea0..1cc56bd6bf 100644
--- a/examples/democoin/app/app_test.go
+++ b/examples/democoin/app/app_test.go
@@ -260,6 +260,10 @@ func TestMineMsg(t *testing.T) {
 		"cool": map[string]string{
 			"trend": "ice-cold",
 		},
+		"pow": map[string]uint64{
+			"difficulty": 1,
+			"count":      0,
+		},
 	}
 	stateBytes, err := json.MarshalIndent(genesisState, "", "\t")
 	require.Nil(t, err)
@@ -279,11 +283,12 @@ func TestMineMsg(t *testing.T) {
 	SignCheckDeliver(t, bapp, mineMsg1, 0, true)
 	CheckBalance(t, bapp, "1pow")
 	// Mine again and check for reward
-	/*
-		mineMsg2 := pow.GenerateMineMsg(addr1, 2, 2)
-		SignCheckDeliver(t, bapp, mineMsg2, 1, true)
-		CheckBalance(t, bapp, "2pow")
-	*/
+	mineMsg2 := pow.GenerateMineMsg(addr1, 2, 3)
+	SignCheckDeliver(t, bapp, mineMsg2, 1, true)
+	CheckBalance(t, bapp, "2pow")
+	// Mine again - should be invalid
+	SignCheckDeliver(t, bapp, mineMsg2, 1, false)
+	CheckBalance(t, bapp, "2pow")
 
 }
 
diff --git a/examples/democoin/types/account.go b/examples/democoin/types/account.go
index f34113fc65..ce2d6da348 100644
--- a/examples/democoin/types/account.go
+++ b/examples/democoin/types/account.go
@@ -4,6 +4,9 @@ import (
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	"github.com/cosmos/cosmos-sdk/wire"
 	"github.com/cosmos/cosmos-sdk/x/auth"
+
+	"github.com/cosmos/cosmos-sdk/examples/democoin/x/cool"
+	"github.com/cosmos/cosmos-sdk/examples/democoin/x/pow"
 )
 
 var _ sdk.Account = (*AppAccount)(nil)
@@ -41,7 +44,9 @@ func GetAccountDecoder(cdc *wire.Codec) sdk.AccountDecoder {
 
 // State to Unmarshal
 type GenesisState struct {
-	Accounts []*GenesisAccount `json:"accounts"`
+	Accounts    []*GenesisAccount `json:"accounts"`
+	PowGenesis  pow.PowGenesis    `json:"pow"`
+	CoolGenesis cool.CoolGenesis  `json:"cool"`
 }
 
 // GenesisAccount doesn't need pubkey or sequence
diff --git a/examples/democoin/x/cool/keeper.go b/examples/democoin/x/cool/keeper.go
index 1bf342fdc2..0a4fc81e1c 100644
--- a/examples/democoin/x/cool/keeper.go
+++ b/examples/democoin/x/cool/keeper.go
@@ -1,17 +1,10 @@
 package cool
 
 import (
-	"encoding/json"
-
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	"github.com/cosmos/cosmos-sdk/x/bank"
 )
 
-// Cool genesis state, containing the genesis trend
-type GenesisState struct {
-	trend string
-}
-
 // Keeper - handlers sets/gets of custom variables for your module
 type Keeper struct {
 	ck bank.CoinKeeper
@@ -49,11 +42,7 @@ func (k Keeper) CheckTrend(ctx sdk.Context, guessedTrend string) bool {
 }
 
 // InitGenesis - store the genesis trend
-func (k Keeper) InitGenesis(ctx sdk.Context, data json.RawMessage) error {
-	var state GenesisState
-	if err := json.Unmarshal(data, &state); err != nil {
-		return err
-	}
-	k.setTrend(ctx, state.trend)
+func (k Keeper) InitGenesis(ctx sdk.Context, data CoolGenesis) error {
+	k.setTrend(ctx, data.Trend)
 	return nil
 }
diff --git a/examples/democoin/x/cool/types.go b/examples/democoin/x/cool/types.go
index a3fa6ca48e..e24c363ace 100644
--- a/examples/democoin/x/cool/types.go
+++ b/examples/democoin/x/cool/types.go
@@ -15,6 +15,11 @@ type SetTrendMsg struct {
 	Cool   string
 }
 
+// Genesis state - specify genesis trend
+type CoolGenesis struct {
+	Trend string `json:"trend"`
+}
+
 // New cool message
 func NewSetTrendMsg(sender sdk.Address, cool string) SetTrendMsg {
 	return SetTrendMsg{
diff --git a/examples/democoin/x/pow/handler.go b/examples/democoin/x/pow/handler.go
index 82c8a19c35..d1a691139d 100644
--- a/examples/democoin/x/pow/handler.go
+++ b/examples/democoin/x/pow/handler.go
@@ -25,9 +25,13 @@ func handleMineMsg(ctx sdk.Context, pk Keeper, msg MineMsg) sdk.Result {
 		return err.Result()
 	}
 
-	if ctx.IsCheckTx() {
-		return sdk.Result{} // TODO
-	}
+	// commented for now, makes testing difficult
+	// TODO figure out a better test method that allows early CheckTx return
+	/*
+		if ctx.IsCheckTx() {
+			return sdk.Result{} // TODO
+		}
+	*/
 
 	err = pk.ApplyValid(ctx, msg.Sender, newDiff, newCount)
 	if err != nil {
diff --git a/examples/democoin/x/pow/handler_test.go b/examples/democoin/x/pow/handler_test.go
index f9db01d0c0..2de2853713 100644
--- a/examples/democoin/x/pow/handler_test.go
+++ b/examples/democoin/x/pow/handler_test.go
@@ -26,6 +26,10 @@ func TestPowHandler(t *testing.T) {
 	addr := sdk.Address([]byte("sender"))
 	count := uint64(1)
 	difficulty := uint64(2)
+
+	err := keeper.InitGenesis(ctx, PowGenesis{uint64(1), uint64(0)})
+	assert.Nil(t, err)
+
 	nonce, proof := mine(addr, count, difficulty)
 	msg := NewMineMsg(addr, difficulty, count, nonce, proof)
 
diff --git a/examples/democoin/x/pow/keeper.go b/examples/democoin/x/pow/keeper.go
index dc4494c698..73558632c4 100644
--- a/examples/democoin/x/pow/keeper.go
+++ b/examples/democoin/x/pow/keeper.go
@@ -14,8 +14,10 @@ type PowConfig struct {
 	Reward       int64
 }
 
-func NewPowConfig(denomination string, reward int64) PowConfig {
-	return PowConfig{denomination, reward}
+// genesis info must specify starting difficulty and starting count
+type PowGenesis struct {
+	Difficulty uint64 `json:"difficulty"`
+	Count      uint64 `json:"count"`
 }
 
 type Keeper struct {
@@ -24,19 +26,27 @@ type Keeper struct {
 	ck     bank.CoinKeeper
 }
 
+func NewPowConfig(denomination string, reward int64) PowConfig {
+	return PowConfig{denomination, reward}
+}
+
 func NewKeeper(key sdk.StoreKey, config PowConfig, ck bank.CoinKeeper) Keeper {
 	return Keeper{key, config, ck}
 }
 
+func (pk Keeper) InitGenesis(ctx sdk.Context, genesis PowGenesis) error {
+	pk.SetLastDifficulty(ctx, genesis.Difficulty)
+	pk.SetLastCount(ctx, genesis.Count)
+	return nil
+}
+
 var lastDifficultyKey = []byte("lastDifficultyKey")
 
 func (pk Keeper) GetLastDifficulty(ctx sdk.Context) (uint64, error) {
 	store := ctx.KVStore(pk.key)
 	stored := store.Get(lastDifficultyKey)
 	if stored == nil {
-		// return the default difficulty of 1 if not set
-		// this works OK for this module, but a way to initalize the store (a "genesis block" for the module) might be better in general
-		return uint64(1), nil
+		panic("no stored difficulty")
 	} else {
 		return strconv.ParseUint(string(stored), 0, 64)
 	}
@@ -53,7 +63,7 @@ func (pk Keeper) GetLastCount(ctx sdk.Context) (uint64, error) {
 	store := ctx.KVStore(pk.key)
 	stored := store.Get(countKey)
 	if stored == nil {
-		return uint64(0), nil
+		panic("no stored count")
 	} else {
 		return strconv.ParseUint(string(stored), 0, 64)
 	}
diff --git a/examples/democoin/x/pow/keeper_test.go b/examples/democoin/x/pow/keeper_test.go
index e9ec9c6d34..6e0d526496 100644
--- a/examples/democoin/x/pow/keeper_test.go
+++ b/examples/democoin/x/pow/keeper_test.go
@@ -34,6 +34,9 @@ func TestPowKeeperGetSet(t *testing.T) {
 	ck := bank.NewCoinKeeper(am)
 	keeper := NewKeeper(capKey, config, ck)
 
+	err := keeper.InitGenesis(ctx, PowGenesis{uint64(1), uint64(0)})
+	assert.Nil(t, err)
+
 	res, err := keeper.GetLastDifficulty(ctx)
 	assert.Nil(t, err)
 	assert.Equal(t, res, uint64(1))