The 1.0.0 release of Decred will include the Decred Change Proposal, DCP-0001, the replacement of the existing stake difficulty, i.e. ticket price, algorithm as the first hard fork voting issue on mainnet. This is a major change and is being proposed to address the various issues that have come up with the stake difficulty (“sdiff” for short) since launch in February 2016. Decred launched with a sdiff algorithm that accomplished its basic design goal, which was to keep the ticket pool near its target size, but we have come to recognize several shortcomings and problems with the existing algorithm that were not apparent until it went into production use. The main problem is that a single interval where all the tickets are purchased leads to a persistent resonant mode, where very limited price exploration occurs, prices swing wildly and stakeholders compete on ticket fees. Replacing the existing sdiff algorithm with a new algorithm will lead to less wild variation in the ticket price and avoid the various problems associated with the existing algorithm. The properties of an ideal sdiff algorithm are related to:
- pool size stability
- price exploration
- relaxation time
- steady state behavior
which are explained in detail below. Currently, there are a few proposed sdiff algorithms from project developers and participants (raedah, animedow, and others) that we will be evaluating using a simulation harness developed by Dave Collins, dcrstakesim.