Decred Governance Proposal: Protecting the treasury
I’ve been following Decred now for almost a year and have been impressed by how everything works and how well the community is developing the project. Up until the economic downturn I would have said that Decred was near perfect.
The problem I’ve seen concerns the price of DCR falling below a certain point e.g. $20. At this point it’s possible for the treasury to deplete its funds quicker than expected and sacrifice the longevity of the project. Remember, we are early to this space! If the monetary policies of the world remain on their current course, crypto currencies will become increasingly relevant over the next five to ten years. When adoption intensifies all major projects will be stress tested beyond what is known, it’s at this point we’ll be thankful for the treasury funds and that we didn’t deplete them unnecessarily.
It’s fair to say, that Decred acts extremely responsible when it comes to its treasury but over the past few months I’ve started seeing projects pass the voting process that didn’t warrant the need for treasury funds or the treasury probably shouldn’t have been responsible for the full funding responsibility of the proposal. I have also started to worry about how genuine some projects are. One can argue that if they are not genuine, they won’t get paid but having a financial reward for anyone who completes some work doesn’t always represent best value for money or cultivate the loyalty and behaviour needed to grow a successful project. Remember, the treasury isn’t the only way for people who want to get involved in the project to get paid.
Projects without a treasury don’t have this problem:
Let’s look at what made Bitcoin successful without having a treasury. Other than first mover advantage, Bitcoin has a long history of holder’s promoters and developing the project. The belief in the project made the participants buy as many Bitcoin as they could and then go to work to make the project the best it could be. Bitcoiners were so excited to be a part of the project they would tell anyone who would listen about it, word of mouth was and still is one of bitcoins biggest validators.
Decred also has this opportunity but this behaviour comes from passion not being paid from the treasury. Why do we have to pay for everything? If you hold DCR and act responsibly you will benefit when we have greater adoption of the project. Obviously, we have the added bonus of a treasury, but I can’t help but feel that this, in many cases, is making us lazy. If we love the project and believe in it we’ll do what it takes to make it better.
There are two things that I would like to propose for consideration. I understand that these steps are difficult to implement and may be conceived as controversial. The steps include adding extra steps to the proposal system through meritocracy and adding a minimum base rate for the price of DCR.
Meritocracy is a great way of validating if a project proposal is worth verifying. The person proposing a project must have already completed a significant amount of work for Decred in the area that they are proposing their project in. This demonstrates that the project provider has a genuine interest in Decred and demonstrates appropriate behaviour inline with expectations.
Treasury Base Rate:
So that the Decred treasure isn’t adversely affected by market conditions I believe that it is important to set a minimum base rate. If the market falls below a certain price e.g. $20, a condition is activated that say that $20 is the minimum a DCR will leave the treasury for. I appreciate that this will affect service providers, this will require further consideration.
- An introduction of who you are e.g. twitter, LinkedIn
- What you’ve done for Decred in the past, with links to work to validate
- How much the project will cost in full and time it will take
- How much you want the treasury to pay for, I suggest the treasury pay for no more than 70% of the project, unless the project is directly related to core development or project infrastructure
Final Disclaimer — Please note the above research is not financial advice and you should always do your own due diligence before investing your money. Investments can go down as well as up and cryptocurrencies are typically volatile assets.
The views expressed in this article are that of the author and based on the authors own research and investigation. The author is happy to receive comments, feedback, edits and likes for this channel to help evolve the open nature of the discussion.
DCR Donation Address: DsahjKtXPeMFqN5AXr3Vim5TMDYAGdhPKqj