Last month Decred stakeholders voted in favor of a hard fork to replace the current stake difficulty (sdiff) algorithm – aka the ticket price algorithm. As a consequence the new sdiff rules will automatically activate at block 149248 – some time tomorrow. However the hard fork itself will actually happen a few hours later when the next sdiff retarget occurs at block 149328 (see voting.decred.org for up-to-date details of the time remaining).
Why is the current ticket price algorithm being replaced?
The current sdiff algorithm generates a large variation in the range of ticket prices. For example, in the last week prices have been as low as 44 DCR, and as high at 229 DCR. This oscillation in ticket price results in a scramble to purchase all 2880 tickets during the low price window, and then no ticket purchases in the following three higher price windows. Competition to purchase tickets during the lower price interval has lead to stakeholder fee wars, making ticket buying a less pleasant experience.
What benefits will the new sdiff price algorithm bring?
The good news is that the new sdiff algorithm means more stable ticket prices! From simulations, it is expected that the new sdiff algorithm will maintain prices within an approximate range of 50 – 70 DCR. This will make ticket buying a much easier and more enjoyable experience. As you can see in the below image, ticket prices have now began to stabilize as stakeholders are already beginning to buy tickets across a range of intervals in anticipation of the imminent sdiff change. Once the new algorithm comes into effect you will be able to buy tickets more regularly during any interval, without paying excessive prices. Plus, lower fees means a higher profit margin from staking rewards!
Resolving the sdiff algorithm issue is a prime example of how the user activated hard fork voting system allows Decred to quickly adapt to any problems that arise. It is another historic moment for Decred, and another blockchain first. The first on-chain user voted hard fork in history. However, with Lightning Network development now underway and a host of other improvements planned on the roadmap it definitely won’t be the last!
Reminder: If you haven’t done so already, please upgrade to v1.0.5. All nodes pre v1.0 will be forked from the network (visit decred.org/downloads).