Decred founder Jacob Yocom-Piatt recently proposed a decentralized exchange (DEX) to the Politeia community. The initiative hopes to cut high-listing fees, front-running high-frequency traders, and third-party rent-seeking. A product that could overcome these barriers would be an ideal alternative to centralized exchanges, but Yocom-Piatt admits the community could still reject the proposal.
Politeia in Action
Decred was launched by Jacob Yocom-Piatt, Dave Collins, David Hill, John Vernaleo, Josh Rickmar, and Alex Yocom-Piatt in Feb. 2016. It uses a hybrid Proof-of-Stake and Proof-of-Work mining system to ensure that miners avoid becoming overly centralized. One of the founding principles of the project has also been its focus on community and open governance.
This founding principle has manifested itself in the project’s launch of Politeia in Oct. 2018. Politeia allows token holders of the Decred community to vote on the direction of the project by staking their tokens. By using native DCR tokens as a governance tool, holders effectively take decide how Decred funds are spent. At its launch last year, Decred’s coffers held roughly $23 million in DCR tokens.
It is an ambitious version of governance, one in which Yocom-Piatt pointed could end badly for the group. In the initial post announcing Politeia’s launch, Yocom-Piatt wrote, “Politeia allows Decred users and stakeholders to propose, discuss, collaborate on, and fund new projects, initiatives, and consensus changes. If stakeholders exercise bad judgment, it can have serious negative consequences.”
Proposals can take two forms: ones that stir voter support for a change of policy or those that will fund projects from the Decred treasury. The upcoming DEX proposal will fall into the latter category and is estimated to cost between $100,000 to $1,000,000 to build.
Features of a Decentralized Alternative
In a phone interview with CryptoSlate,