Blockchain Project Review: Decred:8.4 Autonomous Digital Currency

Original article by EVALUAPE

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A. Introduction

Decred is a cryptocurrency like Bitcoin. Its core concept is to remove the current centralization in Bitcoin. It emphasizes decentralized governance, using the “POW+POS” mechanism to make sure that voting rights will not be monopolized by a few miners or early participants.

Advantages:

Decentralized governance model: Decred adopted “POW+POS” to balance the decision-making force of Bitcoin, achieving a balance among decentralization, security and performance

High-speed iteration: Hard fork upgrade function + more scientific decentralized self-governing decision-making mechanism, enabling high-speed iteration

Self-supporting funds: Unlike that in Bitcoin’s core team that most of the members are from blockstreamr, Decred does not rely on external funds for development. The blockchain automatically generates block rewards (10%) for team development to maintain the continuity of the network, ensuring the independence.

Good scalability: Decred’s underlying layer adopts a modular design that makes it easy to extend new capabilities. Upgrades like hard fork voting, privacy protection, lightning network and quarantine witness can be achieved.

Disadvantage:

There is still improving space in availability.

B. Industry

The value of digital currencies or altcoins can be difficult to estimate. It remains uncertain today that Bitcoin is a kind of settlement currency, or value storage, or digital gold. However, despite the uncertainty, Bitcoin is still developing, showing a strong intensity of resistance to strikes. But comparing to fiat currency, the programmability of digital currency makes it more difficult to be accurately defined.

On the basis of Bitcoin, there are many improved digital currencies, such as Dash, Zcash, Monroe, etc., which are famous for anonymity. There are also Algorand, Thunder token, etc. that can better balance the impossible triangle. But Decred is the first project to take governance as the core and get approved by developers. It has a first-mover advantage on governance track, but the project does not make any promotion in functionality, and there is still improving space in availability. (8/10)

C. Mode

POW+POS hybrid consensus to achieve decentralized governance

The consensus mechanism adopted by Decred is “POW+POS”. POW miners create blocks, and vote to determine whether the blocks are valid to ensure that these blocks meet the user’s interest.

Voting Mechanism:

Anyone in Decred community can submit a DCP (Decred Change Proposal) to clarify a viable improvement proposal. The POS voting mechanism is used to decide whether to pass or not. The voting rights are randomly and anonymously selected.

POS Voting: To participate in PoS voting, stakeholders lock some DCR in return for a ticket. Each ticket is selected to vote at random, giving an average vote time of 28 days. When selected in the period, the DCR will automatically unlock and be returned back to the wallet. When not selected, the DCR will also be returned to the wallet due to expiration.

Token economy: The total number of Decred tokens is 21 million, which is the same as the number of Bitcoin. Current circulation is 9,153,173. The role of the tokens is to motivate POS and POW miners, and to govern the platform. In the distribution mechanism, 100% of bitcoin mining rewards are attributed to the miners. The distribution of Decred’s block rewards are: 10% to the Foundation, 60% to POW miners, 30% to POS miners. Benefits are reasonably distributed. It ensures a sustainable cash flow for developers have, which can avoid the situation that developers being kidnapped by capital. (8.5/10)

D. Technology

High codes update frequency: The project’s Github page is dcrd, and there are 4082 submissions, 96 contributors, 465 stars, and 1207 forks, which is basically on the same track with mainstream public chains.

Product: The project has already launched its main network, and there are also a client and command line application suites available for download. The client supports windows, macos and linux, etc. There are also 2 third-party blockchain browsers and 7 third-party wallets.

Expansion is still in progress: According to the 2018 roadmap on the project blog, Decred will realize the development of new functions such as cross-platform wallet, cross-chain atomic exchange, lightning network and others. From the progress showed on its official website, the current work is lightning network, SPV light wallet, Android wallet, various function integrators and so on. The future work includes privacy protection, decentralized fund management, optimization of block size and signatures. The progress of the project is transparent and the work is progressing steadily. (8.5/10)

E. Ecosystem

On-chain data

Number of transactions: The average number of transactions per day has not changed much since 2016, which is basically maintained at 5,000 per day. In contrast, the daily transactions of Bitcoin and Ethereum are about 300,000 and 500,000 respectively. There is still a huge gap, indicating that it still needs to develop more actual usage scenarios.

Voting pool: The DCR of the voting mortgage pool has steadily increased. It has reached 4.25 million DCR, accounting for 46.52% of the total token circulation. It can be seen that DCR’s governance participation is very active. (8.5/10)

F. Team

Core developers are experienced and powerful: The team developed btcsuite in 2013, but the Bitcoin core development community did not show an open attitude to the project, which led the team to believe that the bitcoin core development was too centralized and began to conceive a more rational governance structure. The main developers in Decred team are all Bitcoin developers, and btcsuite is currently used by several well-known projects (including but not limited to BitGo, Factom, Ethereum and Lightning Network). Several developers of Decred are also contributors of the OpenBSD core, as well as many other projects. Decred’s developers are well-respected in the field of cryptocurrency, such as Charlie Lee (Creator, Litecoin), Olaoluwa Osuntokun (Chief Developer of Lightning Network), Riccardo Spagni (Monero Project Leader), and Jimmy Song (Bitcoin Development Staff) and so on.

The official website shows that the team has 68 people, the largest of which is the development team with 33 people, followed by the community operation team with 21 people. (8.5/10)

G. Conclusion

The current value of DCR lies in the fact that it has proposed a more reasonable governance model after the creation of Bitcoin. Through the division of labor and mining, it can better achieve the unification of interests and decentralization. It is a practice exploration in the direction of autonomy of digital currency. Barriers come from the community, and the project concept currently attracts geeks who are yearning for efficient and democratic communities. At the same time, the project developer team is familiar with the digital currency, and the development experience is sufficient. Although the process is slightly delayed, it is still steadily advancing. However, the shortcoming of the project is that the description of the performance is not detailed. We still need to pay attention to the follow up development of the team, the project performance iteration and the ecological cooperation.

Hype Score: Medium

Risk Score:Medium

Expectation:Medium High

Total Score: 8.4

All information in this article is provided for reference only and does not constitute investment advice.


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