On October 16, the governance-focused cryptocurrency project Decred announced that its democratic treasury governance system, Politeia, was going live. The system allows every holder of Decred to vote on the distribution of a development fund that currently holds over 578,000 Decred tokens (DCR), worth nearly $28 million.
It’s a major step forward for a system founded out of frustration at bitcoin’s structure, which concentrates power in the hand of developers and miners. Politeia uses the same system that’s already in place to make decisions about Decred’s development, essentially a voting system that gives more power to bigger holders. But now there’s money on the line.
That money (which you can stare at here) has accrued over the more than two years since Decred’s launch in January of 2016, from a 10 percent cut of mining rewards sent to the fund. Until now it has been administered manually by the Decred team, but, according to lead developer Marco Peereboom, they’ve spent frugally. “We don’t do boat parties and that kind of fun stuff,” instead focusing on funding development and the occasional conference appearance.
Peereboom believes Decred’s measured approach to building a community will help maintain that frugal ethos once control of funds is fully handed over to Decred holders. Foundational to that community was the January 2016 airdrop of at least 258 DCR each (now worth over $12,000) to a few thousand early supporters through an open application process.
Decred, according to Peereboom, also had no founder’s fees or other premines, meaning that all miners, users, and speculators have built their positions from the same starting line. Some holders have larger stakes than others, of course, and Peereboom says their ability to “vote harder” is a feature, not a bug. Major investors like Placeholder Capital have a bigger interest in long-term growth than any short-term misuse of the developer fund, creating another built-in bulwark against gaming the system.
“We are still the gatekeepers,” says Peereboom, ready to stop any truly disastrous or self-dealing proposals. “Something stupid is going to happen. It’s just inherent.”
That should go some way towards a sort of cash-weighted democracy, but the Decred creators still aren’t quite ready to fully hand $28 million over to the crowd. While voting is live, and Peereboom says admins will respect the will of users, the actual distribution of funds isn’t yet automated. “We are still the gatekeepers,” says Peereboom, ready to stop any truly disastrous or self-dealing proposals. “Something stupid is going to happen. It’s just inherent.”
Working out the kinks before development funds are fully handed over to the Decred community shows that Decred has learned from history. They don’t want to be another DAO, Ethereum’s would-be crypto venture fund whose flawed smart contract was exploited by a hacker to the tune of $60 million. The DAO hack in turn triggered exactly the sort of contentious, community-fracturing hard fork that Decred’s focus on governance is meant to prevent.
Proposals already submitted for voting on Politeia give a small glimpse of what that might look like. Two are pitches from would-be service providers, the competing PR firms Wachsman and Ditto. Another proposal, which Peereboom says he personally would support, is for the Decred treasury to devote funds to a data-science research program. Most of the proposals are strikingly well put together, resembling formal business proposals—which is essentially what they are.
That points to Decred becoming an organization as much as a currency, with collective power to influence the wider world. “What we’re trying to get to is a sovereign entity,” says Peereboom, “Where there are no jurisdictions, only individuals who can vote on where it’s going next.” That vision of a distributed, human-run entity has so far been overshadowed by the sci-fi glitz of Ethereum’s automated smart contracts, but might prove just as transformative—and maybe a little more resilient.