Decred (/ˈdi:ˈkred/, /dɪˈkred/, dee-cred) is an open, progressive, and self-funding cryptocurrency with a system of community-based governance integrated into its blockchain. The project mission is to develop technology for the public benefit, with a primary focus on cryptocurrency technology. Decred, as a currency and as a project, is bound by the following set of rules, which include guiding principles, a system of governance, and a funding mechanism. These rules have been established in an effort to create an equitable and sustainable framework within which to achieve Decred‘s goals.
- Free and Open-Source Software - All software developed as part of Decred shall be free and open source-software.
- Free Speech and Consideration - Everyone has the right to communicate opinions and ideas without fear of censorship. Consideration shall be given to all constructive speech that is based in fact and reason.
- Multi-Stakeholder Inclusivity - Inclusivity represents a multi-stakeholder system and an active effort shall be maintained to include a diverse set of views and users. While it would be ideal to include everyone, Decred shall comply with all relevant bodies of law in the jurisdictions where applicable, such as embargoes and other trade sanctions.
- Incremental Privacy and Security - Privacy and security are priorities and shall be balanced with the complexity of their implementations. Additional privacy and security technology shall be implemented on a continuing and incremental basis, both proactively and on-demand in response to attacks.
- Fixed Finite Supply - Issuance is finite and the total maximum number of coins in Decred shall not change. The total maximum supply for Decred is 20,999,999.99800912 coins, with a per-block subsidy that adjusts every 6,144 blocks (approximately 21.33 days) by reducing by a factor of 100/101. The genesis block subsidy starts at 31.19582664 coins.
- Universal Fungibility - Universal fungibility is fundamental to Decred being a store of value and attacks against it shall be actively monitored and countermeasures pursued as necessary.
- Governance of the network occurs directly through the blockchain via hybridization of a block’s proof-of-work (“PoW”) with its proof-of-stake (“PoS”). PoS contributors, known as stakeholders, can effectively override PoW contributors, known as miners, if 60% or more of the stakeholders vote against a particular block created by a miner.
- A lottery system is used to determine which stakeholders vote on each block and collect a subsidy.
- To be a stakeholder, one must purchase one or more tickets, which entails locking a specified amount of coins for approximately 1 day (256 blocks).
- After waiting for the ticket to mature, the ticket is entered into a lottery that runs once per block where the winning tickets gain the ability to vote on the previous block.
- Stakeholders must wait an average of 28 days (8,192 blocks) to vote their tickets, and during this time the coins used to purchase the ticket remain locked. The wait may be much longer or shorter than the average of 28 days because the ticket selection process is pseudorandom. Tickets expire after approximately 142 days (40,960 blocks).
- Stakeholder votes recorded in the blockchain are rewarded with 6% of each block subsidy, and each block can have up to 5 votes for a total of 30% of each block subsidy.
- PoW receives 60% of each block subsidy, subject to the constraint that their subsidy scales linearly with the number of PoS votes included, e.g. including 3 of 5 votes reduces PoW subsidy by 60%.
- The votes themselves decide by majority decision whether the general transaction tree of the previous block, including the PoW subsidy, is valid. Thus, if PoS voters vote against a particular PoW block, it destroys the PoW subsidy (and development subsidy) and invalidates any regular transactions within that block.
- Additional vote bits may be set when stakeholders submit votes, allowing stakeholders to vote on matters besides the previous block.
- Off-chain decision-making shall be used to resolve disputes related to development and voted on by the Decred Assembly as they arise, as an effective proof-of-assembly (“PoA”), until such time PoA is integrated into the blockchain.
- The Decred Assembly shall be composed of diverse Assembly members who are selected for membership by the Admission Council from the project ecosystem for representation.
- Councils that are composed of Assembly members shall be formed to address ongoing and episodic matters. The initial Councils shall serve the separate functions of admission (Admission Council), creation (Creation Council), and attrition (Attrition Council).
- The Admission Council shall vote on the inclusion of new members into the Assembly. All additional Councils shall be created by the Creation Council. The Attrition Council shall be responsible for deactivating both Councils and Assembly members as necessary.
- Membership of the Decred Assembly shall consist of Assembly members who have been confirmed by a 60% or greater affirmative vote by the Admission Council. There is no restriction on the age or nationality of Assembly members, the only requirement is that of merit as judged by the Admission Council. Merit is judged on the basis of two characteristics: (1) the amount of time over which one has been involved with the project, and (2) one’s body of work and its impact in the context of the project.
- Attrition is embraced by temporarily deactivating or actively expelling Assembly members by a 60% or greater affirmative vote by the Attrition Council on the basis of: (1) substantial non-fulfillment of duties for one or more Councils or the Assembly, and/or (2) counterproductive behaviour that goes against the framework set forth in the Constitution without constructive action toward solutions.
- All matters formally presented to a Council shall be resolved by a vote in 365 days or less.
- Sustainability and longevity require that a subsidy of 10% of all block rewards be given to a development organization on an ongoing basis. The initial development organization shall be Decred Holdings Group LLC (“DHG”), a Nevis LLC that is responsible for funding work related to the development of the project, such as software development, infrastructure, and awareness.
- DHG shall only fund work that adheres to the guiding principles.
- DHG shall issue public financial statements every six months, starting March 8th, 2016. The frequency of financial statements may increase with activity, but it shall not occur more often than quarterly.
- DHG shall put forth a budget proposal each year on March 8th, after the corresponding public financial statement has been issued.
- The Funding Council shall review, propose changes, make changes, and ultimately approve the proposal by April 8th, one month from the initial budget proposal.
- Final approval of the budget via PoA vote shall occur after Funding Council approval by April 18th, two months from the initial proposal.
- DHG shall make public requests for proposals (“RFPs”) for projects that are to be completed by parties on a contractual basis. RFPs shall include a scope and an explanation of how the work shall benefit the project. Parties that submit proposals shall be required to include: (1) a detailed description of the work to be performed, (2) a series of milestones that can be verified as work is completed, and (3) a quote for the work, itemized by milestone, in U.S. Dollars (“USD”).
- All proposals, both submitted and accepted, shall be made public one week after a proposal has been selected. Once the selection occurs, the associated RFP shall be removed. Contracted parties shall be paid exclusively in decred (“DCR”) at the current effective DCR/USD rate at the time of payment, unless specifically noted otherwise.
- In the future, the development organization may need to change from DHG to another entity that serves an identical function. If and when this occurs, DHG shall transfer all assets to the new entity and the development subsidy shall be directed to the new entity.