What is DCR - Decred?
Decred is a cryptocurrency with the sole focus of improving decentralized governance and on-chain community voting using blockchain technology. Decred was created to address the centralization seen within mining pools of larger projects such as Bitcoin. Decred introduces a hybrid consensus protocol solution that is a mix between Proof of Stake and Proof of Work.
As with Bitcoin, the total supply of DCR tokens is 21,000,000. During its inception, an 8% total of the overall DCR supply was pre-mined and split evenly with 4% distributed through an airdrop, the other 4% was used to pay for initial development costs.
Governance - PoS & PoW Hybrid
In the Decred system, the block rewards are split among miners, stakeholders, and the Decred treasury system. Miners and stakeholders are able to validate transactions and vote on proposals. Stakeholders essentially lock up tokens in exchange for tickets that allow them to act as block validators when their ticket is randomly selected.
The miners in the Decred system process network transactions, which produces the blocks that define the blockchain network itself. Blocks are generated by miners, which are then validated by ticket holders. The initial miners who chose to participate in the block generation were also given block rewards.
Decred uses the BLAKE-256 hash function for mining DCR tokens. Proof of Work mining can be done through the use of GPUs, but there are also ASICs that are used to mine DCR, which means GPU mining is largely unprofitable on the DCR network. Mining can be done on the network solo or through an established mining pool.
Individuals taking place in the Decred governance system utilize DCR tokens to purchase tickets. During each block confirmation, there are a total of 20 tickets randomly selected to determine which stakeholders receive a portion of the mining rewards. After a total of 256 blocks have been confirmed, your ticket is entered into a pool with a 50% chance of being selected within 28 days.
Over time, the chances increase to 99.5% within 160 days, which ensures that stakeholders are fairly rewarded for network participation as well as the miners. Once chosen, you receive the price of your ticket back in for the form of DCR in addition to a staking reward, which incentivizes the DCR community to actively participate in the network.
Decred Voting System
With Decred anyone is able to submit a proposal for development improvement. The approval process is handled by the Decred Assembly, which is a group of individuals that have been voted into the council by the community members.
After a proposed development has been approved by the Decred Assembly, it is then added to the source code of the network as dormant code. The code lies dormant until 95% of miners have updated their nodes. Additionally, a minimum of 75% of total stakeholders will also require the updated code. Once the code has been properly distributed, there is a network vote held for the duration of 8,000 blocks.
During this time, the miners and stakeholders are given the option to vote yes, no, or not vote at all. For a vote to pass, the required total majority of votes between both parties must be 75% or greater if approval is going to take place. If there are not enough votes in place by the end of the set time limit, the vote is restarted.
Politeia Governance Platform
Politeia is a web platform, the purpose of which is to host Decreds open governance system. Politeia allows the Decred community to discuss proposals that have been made to improve the system. To participate in votes, stakeholders will timelock their DCR tokens in return for tickets. When a proposal is submitted, there are fees incurred to limit the potential for spam.
Once a proposal has been submitted, it is reviewed by admins, but all content that is deemed spam will be censored through the process of transparent censorship. All valid proposals are publicly posted among the community for feedback. After that, the owner may edit their proposal based on the feedback received from the community.
Proposals that become inactive due to lack of action will be marked as abandoned by admins. However, the active proposals will be authorized to start the voting process by the proposal owner. Afterward, an admin will trigger the voting process to begin.
A snapshot of the ticket pool will be taken. Each ticket within the pool will be a ‘yes’ or a ‘no’ vote. A proposal must receive 60% yes vote to be considered approved. When the voting period ends, the proposal is either approved or rejected. For a vote to be considered valid, a total of 20% of outstanding tickets must vote, out of that group, the total votes must achieve 60% or greater in ‘yes’ votes to be approved.
The Decred network focuses on a decentralized governance structure with improvements voted upon by the miners and stakeholders who have chosen to participate in the network. Built on open source technology, Decred aims to be a completely autonomous digital currency.
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