Decred

Decred is a self-funding cryptocurrency that was designed to be both open and progressive. The proof of that intention can be found in its community-based governance, which is incorporated into the blockchain. It runs on a hybrid proof-of-work proof-of-stake (PoW/PoS) consensus system that’s trying to strike a balance between PoS voters and PoW miners to arrive at a more solid idea of consensus. The Decred project springs from the theoretical proposals brought in by MC2 and proof-of-activity (PoA) in 2013. Work on Decred began in April 2014 with just one developer, but it wasn’t long before others from btcsuite added their assistance.

Decred was created with the spirit of open participation in mind. It went for an alternative funding model as a way of shifting the risk from supporters to the project’s developers. The money for software development is often put up by interested parties, but in this instance, the developers decided to shoulder the burden for themselves before presenting it to the world at large. The developers thought that the usual way of working was a little unjust because investors are so often expected to put money into a project before a single line of code had been written. But with this approach they would self-finance, risking their own money instead of anyone else’s.

Decred’s development was financed through Company 0 and the project’s programmers. They were paid by Company 0 for their efforts and the bill for this came to around $250,000, with about $165,000 earmarked for unpaid work and individual procurements by developers. It was felt that the fairest approach to handling the payment of these expenses was via a small premine tacked onto the project launch. This model is a bit out of the ordinary though because none of the developers got any free coins—they all had to be bought for 49c a coin, paid for out of their pockets, or bought for the same price by working for them.

The premine accounted for 1.68 million coins, which is 8% of the entire 21-million-coin supply. Instead of allocating all of the premine to the bring-up costs, it was agreed to divide it equally between compensating for the bring-up and an "airdrop", where an equal amount of coins were freely given to several airdrop participants. The result is that Company 0 and its developers will have added around $415,000 into the bring-up since April 2014 in exchange for 4% of the total supply, 840,000 coins (at 49c per coin). The remaining 4% was evenly distributed between airdrop participants to help build the Decred network and decentralize its distribution. Company 0 coins are used to help pay for its ongoing work on open-source projects, things like btcsuite and Decred.

Airdropping coins has helped to grow the Decred network, contribute to the decentralization effort by distributing coins, and give coins to people who wanted to be a part of the project. Decred is about technological progress, so the airdrop was slanted towards people who’ve contributed to its advancement in different ways. Only 5,000 people were selected for the free airdrop.