Decred (DCR) spiked 45% in less than 24-hours with the overall cryptocurrency market flashing red in the downward price action. The altcoin’s price surge is due to the protocol’s shift to a proof-of-stake (PoS) consensus mechanism.
Decred’s community voted to reduce the proof-of-work (PoW) mining rewards from 60% down to 10%. This is part of the effort to defend against malicious miners with a history of price manipulation. Decred will also raise the rewards for its PoS validators from 30% to 80%. This shows that Decred consensus wants to move away from PoW to PoS for good.
As such, Decred users would be incentivized for locking up their DCR for a certain amount of time. It will reduce DCR’s active supply from the market, boosting its price. At the time of writing this article, Decred (DCR) was down by 5.84% in the last 24-hours. It was trading at $62.57.
Jake Yocom-Piatt, the Project Lead at Decred, tweeted that a similar strategy has likely been applied for every notable majority-pow coin. He believes that people who care about PoW and its fairness should be aware of its hidden risk. Jake highlighted that PoW and PoS both have notable strengths. But Decred has found that the typically overlooked risk of a mining cartel suppressing markets with its inventory is a massive downside to PoW.
A number of protocols have moved to the PoS and their value subsequently took an uptrend. Zcash spiked as much as 30% when it moved to PoS.