# Decred > Decred is an open-source cryptocurrency launched in February 2016, featuring a hybrid Proof-of-Work and Proof-of-Stake consensus mechanism. It emphasizes govern... - Canonical URL: https://iq.wiki/wiki/decred - Categories: Projects & Protocols - Created: 2022-08-18T12:22:21.099Z - Last updated: 2026-07-11T02:49:02.617Z - Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki) --- Decred (/ˈdi:ˈkred/, /dɪˈkred/, dee-cred) is an open-source, community-directed, and self-funding [Layer 1](https://iq.wiki/wiki/layer-1) [cryptocurrency](https://iq.wiki/wiki/cryptocurrency), similar to [Bitcoin](https://iq.wiki/wiki/bitcoin). It was designed to address Bitcoin's perceived shortcomings, including inefficient governance and lack of development funding, by integrating a community-driven governance model directly into its [blockchain](https://iq.wiki/wiki/blockchain)​[\[7\]](#cite-id-vhSbRg5dk0363KRc)​[\[8\]](#cite-id-2kaRnnGtXsPfjzdd). Decred's core principles are security, privacy, and scalability, with a focus on providing stakeholders with tools to enhance their financial sovereignty[\[9\]](#cite-id-Xpdf7KDi3YYXcAPQ). [YOUTUBE@VID](https://youtube.com/watch?v=QhtSqY_2iUA) ## History The conceptual foundation for Decred originated in 2013 on the BitcoinTalk forums with a [cryptocurrency](https://iq.wiki/wiki/cryptocurrency) concept called "Memcoin2," introduced by users 'tacotime' (who later created [Monero](https://iq.wiki/wiki/monero)) and '\_ingsoc'[\[7\]](#cite-id-vhSbRg5dk0363KRc). In 2014, a developer entity known as Company 0 began formal development on the project, which was built on [Bitcoin's](https://iq.wiki/wiki/bitcoin) original code[\[10\]](#cite-id-vKjrkzxMwPdwnCCY). Decred was officially launched in February 2016 by some of the same [Bitcoin](https://iq.wiki/wiki/bitcoin) developers that engineered btcsuite, an alternative full-node [Bitcoin](https://iq.wiki/wiki/bitcoin) implementation written in the Go (golang) programming language[\[11\]](#cite-id-RbA4Q46dqhehaTjl)​[\[4\]](#cite-id-mvt79mxjt5). Key milestones in its development include: * **2017:** Decred implemented atomic swaps, enabling users to exchange tokens with other blockchains directly without requiring a centralized exchange[\[10\]](#cite-id-vKjrkzxMwPdwnCCY)[\[5\]](#cite-id-4vi7nanie6j). * **2018:** The project implemented Politeia, its off-chain proposal and voting system for governance decisions[\[10\]](#cite-id-vKjrkzxMwPdwnCCY). * **2019:** The [Lightning Network](https://iq.wiki/wiki/lightning-network) was implemented on the Decred mainnet, which also enabled support for smart contracts and off-chain transactions[\[10\]](#cite-id-vKjrkzxMwPdwnCCY). * **2020:** DCRDEX, Decred's native decentralized exchange, was officially launched[\[7\]](#cite-id-vhSbRg5dk0363KRc). ## Consensus Mechanism Decred is designed with a built-in governance system to resolve centralization and governance conflicts present within the [Bitcoin](https://iq.wiki/wiki/bitcoin) system and address the 'tragedy of the commons' that can occur within decentralized [cryptocurrencies](https://iq.wiki/wiki/cryptocurrency)​[\[1\]](#cite-id-q8d7l5rq5uc). Decred's governance system is engineered with a hybridized [Proof-of-Work (PoW)](https://iq.wiki/wiki/proof-of-work-pow) and [Proof-of-Stake (PoS)](https://iq.wiki/wiki/proof-of-stake) consensus protocol[\[2\]](#cite-id-ohglbye0d9h). In this model, PoW miners are responsible for validating transactions and creating new blocks, while PoS stakeholders validate the work of miners and vote on governance proposals. This dual-layer system is designed to be significantly more difficult to conduct a 51% attack against than pure PoW or PoS chains[\[8\]](#cite-id-2kaRnnGtXsPfjzdd). ### Block Reward Distribution The rewards for each new block are split among three groups to align incentives across the network: * **89%** to Proof-of-Stake voters (ticket holders) * **1%** to Proof-of-Work miners * **10%** to the Decred Treasury This distribution model ensures that stakeholders who secure the network and participate in governance receive the vast majority of rewards[\[12\]](#cite-id-0kcsGacuc74NvljO). ### Hash Function Decred uses BLAKE-256 as its hash function. BLAKE-256 is based around a HAIFA construction that incorporates a variation of the ChaCha stream cipher by Daniel J. Bernstein. The BLAKE-256 hashing function has high-performance ratings on x86-64 microarchitecture[\[3\]](#cite-id-wh5a6h3gumr). ## Governance Decred operates as a [Decentralized Autonomous Organization](https://iq.wiki/wiki/dao) (DAO) where coinholders who stake their DCR have direct voting rights on network changes, development proposals, and treasury spending[\[8\]](#cite-id-2kaRnnGtXsPfjzdd). Influence is acquired by having "skin in the game" through staking[\[9\]](#cite-id-Xpdf7KDi3YYXcAPQ). ### Politeia Politeia is Decred's off-chain proposal and voting system. It allows stakeholders to publicly propose, discuss, and vote on project-related initiatives, including treasury fund allocations, protocol upgrades, and policy changes. All proposals are time-anchored and censorship-resistant to ensure a transparent governance process[\[8\]](#cite-id-2kaRnnGtXsPfjzdd)​[\[10\]](#cite-id-vKjrkzxMwPdwnCCY). A Decred Constitution sets out guiding principles for the project, which can also be amended via Politeia proposals[\[12\]](#cite-id-0kcsGacuc74NvljO). ### Decred Treasury The Decred Treasury is a self-funding, decentralized entity that receives 10% of every block reward. This model creates a sustainable source of funding for project development, marketing, and other initiatives as approved by stakeholder votes, eliminating reliance on external capital[\[9\]](#cite-id-Xpdf7KDi3YYXcAPQ)​[\[8\]](#cite-id-2kaRnnGtXsPfjzdd). ## Key Features and Ecosystem ### DCRDEX DCRDEX is a native, [peer-to-peer](https://iq.wiki/wiki/peer-to-peer-trading-p2p) [decentralized exchange](https://iq.wiki/wiki/decentralized-exchange) (DEX) built using atomic-swap technology. It is funded by the Decred DAO and features no [trading fees](https://iq.wiki/wiki/trading-fee) or [Know Your Customer](https://iq.wiki/wiki/know-your-customer-kyc) (KYC) requirements, facilitating trustless trading across different [blockchains](https://iq.wiki/wiki/blockchain)​[\[8\]](#cite-id-2kaRnnGtXsPfjzdd)​[\[13\]](#cite-id-vbD5zklqXSJNugzZ). ### Privacy Decred incorporates optional, opt-in privacy through CoinShuffle++ (CSPP), a trustless coin mixing protocol that enhances user anonymity. The technology uses post-quantum secure cryptography, and the total coin supply remains auditable to prevent hidden inflation[\[8\]](#cite-id-2kaRnnGtXsPfjzdd)​[\[12\]](#cite-id-0kcsGacuc74NvljO). ### Scalability and Lightning Network Decred has integrated the [Lightning Network](https://iq.wiki/wiki/lightning-network) for [Layer 2](https://iq.wiki/wiki/layer-2) scaling, which enables faster and cheaper payments. An application built on Decred's [Lightning Network](https://iq.wiki/wiki/lightning-network) is Bison Relay, a secure communication platform[\[8\]](#cite-id-2kaRnnGtXsPfjzdd). ## Tokenomics #### Token Utility Decred's native [cryptocurrency](https://iq.wiki/wiki/cryptocurrency), DCR to receive tickets, which are non-tradable assets used to participate in the [Proof-of-Stake](https://iq.wiki/wiki/proof-of-stake) (PoS) consensus mechanism and vote on governance proposals[\[6\]](#cite-id-M6nopmmlEe)​[\[10\]](#cite-id-vKjrkzxMwPdwnCCY). #### Supply and Emission Like [Bitcoin](https://iq.wiki/wiki/bitcoin), Decred has a maximum supply of 21 million DCR. The block reward, which is the rate at which new DCR are created, reduces by 1% approximately every 21 days[\[8\]](#cite-id-2kaRnnGtXsPfjzdd). #### Initial Distribution At launch, 8% of the total 21 million DCR supply (1.68 million DCR) was premined and distributed as follows: * **50%** was allocated to the founding organization, Company 0 (36%), and the Decred development team (14%). Company 0 airdropped its DCR for free over many years, as a way to decentralize it's holdings and bootstrap the network; while the development team’s allocation was locked for 12 months. * **50%** was distributed via an airdrop to eligible participants, with a cap of 5,000 maximum participants. Preference was given to contributors to the project. The remaining supply is minted through mining rewards[\[6\]](#cite-id-M6nopmmlEe).