What is Decred (DCR), and Why is it Spiking?

Up 3.3% in the past 24 hours, Decred (DCR) is trading at $18.94 while managing $14 mln in trading volume. While currently in the green, the privacy coin hasn't really managed to perform well these past couple of years.

DCR is down 67% in the past year and a whopping 92.2% from its all-time high (ATH) of $247.35 hit in April 2021. Even in 2023 so far, DCR's price is only up 4%. Meanwhile, majors like Bitcoin and Ether are up more than 75% and 58% YTD respectively.

Currently, the technical analysis for DCR is showing mixed signals from various indicators. The Relative Strength Index (RSI) is in neutral territory, while the stochastic oscillator is giving a sell signal, and the MACD (Moving Average Convergence Divergence) is also indicating a sell.

Meanwhile, the short-term moving averages (MA5 and MA10) are showing a buy signal, the same as the medium-term moving averages (MA20 and MA50). The longer-term outlook, however, looks bearish, with the long-term moving averages (MA100 and MA200) giving a sell signal.

Decred (DCR) is actually one of the oldest cryptocurrency coins that originated in 2013. In 2016, the project's mainnet was officially launched with assistance from Company 0 (C0), an open-source development firm led by Jake Yocom-Piatt.

The cryptocurrency copied Bitcoin's code and used a hybrid-consensus mechanism with components from both Proof-of-Work (PoW) and Proof-of-Stake (PoS), with the PoW miners verifying transactions and the PoS stakers proposing and voting on network upgrades.

For governance, Decred uses Politeia, where stakeholders vote on different decisions regarding the project's future, such as new initiatives, funding, and any changes to the protocol's code.

DCR is the native token of the Decred network and is used to participate in governance, fund the network upgrades, and interact with the community.

Click here to learn all about investing in Decred (DCR). 

Privacy Coins Tanking

DCR is the fifth-largest privacy coin by market cap of $286.3 million, according to CoinGecko. The combined market cap of all privacy coins is currency standing at $6.3 bln, with Monero (XMR), DASH, and Zcash (ZEC) at the top and recording a total of $236 million in trading volume.

Privacy coins are a type of cryptocurrency that uses technology to anonymize transactions by obscuring the flow of money and the identity of the parties involved. The way Decred achieves privacy for its users is by implementing CoinShuffle++, which offers opt-in privacy on all transactions, including stakeholders buying tickets and non-staking coin holders.

CoinShuffle++ (CSPP) is a mixing protocol that creates Decred CoinJoin transactions, a non-custodial process that obfuscates DCR token ownership, where the output addresses are anonymized.

Privacy coins, however, are not talked about like they used to be. These past few years, DeFi and NFTs have taken over the hype and discussions, exceeding privacy coin conversations. Moreover, an increasing number of regulatory authorities worldwide have been taking a strong stance against them.

In Nov. 2022, it was reported that the European Union (EU) might be planning to ban banks and crypto providers from dealing in privacy-enhancing coins under a money laundering bill. Government policy decisions and proposed guidelines caused several crypto exchanges worldwide, like HTX, to stop listing privacy coins like XMR and ZEC.

Decred is currently available to trade on Binance, Gate.io, OKX, KuCoin, Bittrex, and ByBit.

On the regulatory front, Japan already banned privacy coins completely as early as 2018, while Australia and South Korea have implemented rules restraining privacy coins from being traded at exchanges. The EU, meanwhile, has introduced the FATF Travel Rule and the AMLD-5 directive.

Recently, Ethereum (ETH)-based crypto mixer Tornade Cash was banned by the U.S. Treasury Department, demonstrating just how eager authorities are to take action when it comes to anonymous transactions.

The Organization for Economic Cooperation and Development (OECD) has also been working on hindering the rise of privacy coins under new tax measures in 2023 due to concerns about money laundering.

Latest Developments: Decred Vanguard

While privacy is an ongoing battle, amidst the current broad down market, the Decred community is now focusing on building a marketing/outreach effort from the ground up.

This Thursday, the community approved the Decred Vanguard proposal, a new, incentivized, community-driven outreach program to inject Decred into discussions all across the internet, including Twitter, Reddit, YouTube, and Forums, with the intent of making the project go viral, according to the official proposal.

The proposal discusses how the current Decred marketing consists of creating content in the form of the Decred Journal, Decred Magazine, and Videos, but is only consumed by the existing Decred community.

To solve this problem, the proposal recommends forming “a force of passionate community members focused on generating outreach to break out of the said bubble.” For this, a dynamic program called Decred Vanguard will be launched that exclusively focuses on cryptocurrency outreach.

Under the program, there are 25 available slots to synergize efforts in a newly created ‘Decred War Room,' which will be bridged across Bison Relay, Matrix, and Discord. Vanguard members must be deeply knowledgeable about the Decred protocol to explain the various elements of its tech stack.

“The purpose is to introduce Decred into related discussions on social media platforms, or anywhere relevant on the internet, with the goal of making the project better known throughout the crypto space,” it stated.

Among the goals of the program are energizing the community and fostering a sense of optimism and productivity, growing the project adoption, increasing awareness of Decred's features and tools, such as the DEX, Bison Relay, StakeShuffle++ Privacy, Politeia, on-chain voting, hybrid PoW/PoS, and creating memes, and other content to help drive Decred's outreach and enhance the project's social media presence.

To achieve these goals, members will get access to DAO-funded tools, including Twitter Blue, Midjourney, and Elvenlabs. To motivate the members, the proposal also introduces a monthly prize of $100 in DCR tokens for the top three Vanguard members. There's also a monthly stipend of $100 and $2,000 in discretionary spending for any interesting ideas.

“The continued failures of the legacy banking system, the release of DCRDEX v0.6 with stablecoin Atomic-Swap support, Bison Relay prepaid invites, and the newly approved PoW subsidy/algorithm proposal change have created a perfect storm in which Decred can truly thrive. A coordinated outreach program is what we now need to spread awareness about this cutting-edge cryptocurrency,” concluded the proposal.

Technical Developments

Last month, Decred the latest version of the project, v1.7.7. This one came out with plenty of fixes as well as the long-awaited release of DCRDEX v0.6 included in Decrediton. With this new version, the network will add support for ETH, USDC, and any other ERC20 assets that server operators wish to enable.

“The era of being able to atomic swap between BTC and stablecoins or ETH without needing an app coin, wrapped asset, third-party chain, or middle-man taking a cut has arrived,” reads the post on Twitter.

DCRDEX 0.6 above refers to the latest version of Decred's DEX that introduces direct P2P cross-chain swaps. This update removes the need for intermediaries, utility tokens, or other third-party arbitration, bringing users more privacy and security and access to privacy-enhanced cross-chain compatibility.

“With centralized exchanges experiencing frequent hacks and outages, DCRDEX 0.6 is a timely and crucial development in the world of decentralized finance…This latest release demonstrates that users can still exchange their funds without compromising the key principles of security, privacy, and self-custody,” said Brian Stafford, a blockchain developer at Decred at the time.

The latest version of DCRDEX supports direct swaps for new assets in ETH and USDC. This allows users to gain full self-custody with direct and secure peer-to-peer swaps for Ethereum and other L1 chains, including Bitcoin and DCR. The DEX further supports native wallets for top altcoins, including LTC and BCH, and uses the same privacy-preserving light wallet technology used for BTC and DCR wallets.

Moreover, to have a fully decentralized DEX platform, Decred has introduced “time-locked fidelity bonds,” which means there's no more registration fee. Fidelity bonds let users lock funds on-chain for a specific time and redeem them after the lock period ends, with only those who post the bonds having the ability to spend them.

Overall, all these efforts together are yielding positive results for DCR prices, as seen with this week's increase. If the project becomes successful in its Decred Vanguard project and grows its community, it can really benefit the project and, in turn, help bring further limelight to the project.

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