What's next? (DEX, Lightning network and Privacy)

Decred is adaptable. A self-funding mechanism allows it to fund its own improvement and expansion without relying on Venture Capital, donations or any other third party resources, which would push rent-seeking projects.

The Decred Treasury holds $10,788,744 USD as of Sep 1st, 2020. If it had a marketcap similar to Bitcoin's, Decred would control a $7.000.000.000 development fund. Audit the Treasury in real time using the Block Explorer.

Making use of its autonomy and control over its own blockchain, Decred stakeholders have decided to fund tools and services that address the major issues cryptocurrencies are expected to solve, from cheap and lightning fast medium of exchange capabilities to highly resilient privacy features like the Coinshuffle++ mixer and project funding and tracking systems such as Politeia and the Contractor Management System.

Decred's future developments is in its stakeholders' hands. Everyone who locks DCR to purchase tickets can help decide where Decred should go next.

Projects already approved by stakeholders in Politeia include further implementations of the Coinshuffle++ coin mixer (privacy), an open-source and distributed exchange platform (DEX) and improvements to the Treasury system.

Privacy

Digital money can't be unstoppable and censorship resistant if its users can be tracked and pursued. Since Bitcoin's launch, many cryptocurrency projects have tackled the privacy problem and there is a wide range of implementations in the wild, but some diminish auditability and others add too much complexity.

Cryptocurrency privacy technology can be distilled down to “math tricks” (cryptography). The math behind these is focused on how to efficiently prove certain statements whilst hiding much of the data used to prove that statement.

Decred's first privacy feature is a mixing service based on Coinshuffle++ (research paper, PDF), peer-to-peer mixing protocol used to create Decred CoinJoin transactions.

Currently, Decred's CSPP mixing service is only accessible through the command-line tools and allows users who run their own voting infrastructure to mix DCR or tickets with others. Users who opt-in to privacy are able to both receive and spend payments with healthy plausible deniability: the outputs cannot be linked to their identity.

As Decred improves its UX, the increased participation will create a much bigger and robust anonymity set, allowing DCR holders to hide in a bigger crowd.

Privacy features are expected to arrive to Decrediton, the GUI desktop wallet, in the next release: a highly anticipated Version 1.6.

Cathie Wood, CEO of ARK Invest (ark-invest.com), a successful investment fund, with investments focused on hot markets from biotech and genomics (CRISPR) to cryptocurrencies.
In lot of these crypto funds, you will find Bitcoin dominating and in terms who the others are going to be, Decred looks promising, so we are looking carefull at that.

Lightning Network

Decred is one of the few cryptocurrency networks with it's own implementation of the Lightning Network. This is a layer 2 scalability solution, a new network that sits on top of the main chain and helps save precious block space by creating payment channels and only publishing their closing states to the blockchain.

The DCR Lightning Network is already deployed on mainnet, but it still requires further testing before anyone can safely use it. Decred's LN daemon comes bundled with Decrediton. If you wish to try it out, refer to this guide.

There are also Decred specific innovations related to the Lightning Network that are being worked on. Decred LN could lower the barrier to participate in the governance system. Currently a Proof-of-Stake Ticket is worth a couple thousand dollars, a prohibitive amount for lots of people. There are Ticket Splitting tools currently in beta which works on-chain so that multiple DCR holders can pool together to buy a ticket. LN could be used to split tickets at a much lower cost between even more users than the current on-chain system.

Ticket splitting is the process of splitting the cost of a full ticket with other DCR holders. This allows you to stake and participate in Decred’s governance even if you don’t have enough DCR to purchase a full ticket.

Once Decred's LN implementation is stable and up to speed with Bitcoin's LN implementation, Decred has the capacity and the ability to implement new features that have not been tested on BTC yet, because these require on-chain changes.

Check out this interview with Decred's Lightning Network lead developer Matheus Degiovani to learn more about the DCR implementation.

Decentralized Exchange, without fees & KYC

Decentralized Exchange (DEX) is a key component of the decentralized economy landscape. As a result of centralized exchanges being hacked, used as exit scams and pursued by regulators, DEXs present users with a much more secure and private alternative.

Decred is building a blockchain agnostic DEX that allows users to trade between cryptocurrencies and tokens deployed on different chains. It will have no associated blockchain or token, and will not collect trading fees or user data. Instead it will just have a registration fee to discourage bad actors, just like Politeia.

A reputation system based on Politeia will make it clear that a given client or server misbehaved as of a particular time and date.

The main motivation behind the DCRDEX is to provide liquidity for cryptocurrency projects without relying on centralized exchanges which invade their users privacy by enforcing KYC/AML policies and often press cryptocurrency projects to pay large listing fees despite requiring little work.

Once DCRDEX is running smoothly, future developments will focus on making it more robust and user-friendly. The client-server model has some problems that can be solved by deploying a mesh of servers that share their orderbook.

Adding support for server-to-server communication will allow for the creation of worldwide trading pairs, with the bonus that it would be stable under loss or disconnection of large segments of the network.

Read more about the motivation and details behind DCRDEX at this article by Jake Yocom-Piatt, a lead Decred developer.