Decred is based on a proposal for the Memcoin2 cryptocurrency from April 2013 on the Bitcointalk forum. The user, tacotime, proposed the new cryptocurrency and worked with _ingsoc, another Bitcointalk user, and Jake Yocom-Piatt to implement the hybrid Proof-of-Work (“PoW”) / Proof-of-Stake (“PoS”) consensus system from Memcoin2 as a new project, called Decred.
The major innovation of this hybrid consensus system was that it created a PoS governance mechanism, where users opt-in to temporarily lock their coins in exchange for participation in a lottery. These users are called stakeholders. Several winners of this lottery are selected each block to participate in the consensus system by voting, which puts sovereignty over decisions about Decred directly in the hands of its stakeholders.
In contrast, every pure PoW cryptocurrency must rely primarily on its miners for governance decisions since they alone enforce the consensus system and provide its security. However, Decred relies on both its stakeholders and miners for consensus and its security. The end result is that Decred’s hybrid PoW/PoS consensus system is both substantially fairer and more secure than pure PoW systems.
Decred’s code was built on the btcsuite codebase, an alternative full node Bitcoin implementation in Go, written by Company 0, LLC. Despite Decred being based on Bitcoin’s code, it is a standalone cryptocurrency, not a “Bitcoin fork”. This work began in February 2014 and continued with the assistance of Company 0, LLC until its mainnet launch in February 2016.
Airdrop & Premine
During the launch in February 2016, Decred used an innovative airdrop and small premine to bootstrap the PoS component of the Decred network, establish a wide network of potential project contributors, and compensate the early developers for their work prior to launch. Given the necessity of distribution, this process was determined to be fair, transparent, and yielded significant decentralization from the outset.
On Chain Governance
Since Block 4,096 was mined on February 21 2016, every Decred block has incorporated the votes of at least 3 tickets, approving the contents of the previous block. On July 9 2017, the first consensus vote of tickets was concluded, with the approval of changes which would allow for Lightning Network features to be deployed on the Decred network.
Politeia was launched as Decred’s off chain proposal discussion and voting site on October 15 2018, with the first proposal votes concluding on November 9 2018. A Contractor Management System (CMS) was built using Politeia, and since April 2019 contractors working on the Decred project have been submitting their invoices using this system. This creates a robust record of interactions between contractors and admins which cannot be falsified or tampered with. A second type of proposal, a Request For Proposals (RFP) was added in 2020, allowing for a two stage process where a general plan is first approved before interested parties submit proposals which meet its criteria. The first RFP proposal was completed on September 25, 2020, with all candidate proposals being rejected. Politeia was launched with a git-based backend with censorship tokens for ensuring transparency of censorship, and in March 2021 this was upgraded to use a Trillian log for improved scalability and flexibility.