100% decentralized: the amazing story of the community-driven DMD Diamond project
DMD Diamond is one of the longest-running and most decentralized blockchain projects, and now it’s embarking on a new exciting upgrade as DMDv4. In this post, we look back at the journey since 2013, as DMD became progressively more decentralized, fast, and efficient.
What is DMD Diamond?
Launched in 2013, DMD is one of the very few early cryptocurrencies that survived and maintained an active community, just like Bitcoin, Litecoin, and Dogecoin. It’s also much more scarce, with only 4.38m DMD available and no possibility of future emission. In fact, the name Diamond stands for scarcity and value.
For most of the past 7 years, DMD figured on Coinmarketcap’s list of the 100 largest coins, and some people have even called it the phoenix of crypto because DMD has weathered every crisis — mostly thanks to the strong community support.
DMDv1: one of the PoS pioneers
The original Diamond, created in 2013, used a lot of Bitcoin’s codebase but featured a hybrid PoW/PoS consensus model, like Peercoin, and a limited maximum supply of 4.38 million DMD. Full emission was supposed to take eight years, which seemed like a very long time for crypto at the time. DMD also built on some other coins’ technology, including random superblocks (introduced by Luckycoin) and transaction comments (as used by Florincoin). The idea was met with a lot of excitement, though the PoS staking algorithm had its flaws.
Unfortunately, several months after the launch Diamond’s main developer left the project. The community was understandably angry and disappointed, and the story of Diamond could have easily ended there and then. How did it survive?
DMDv2: low inflation and ASIC resistance
As the Diamond project was left without leadership, it was the community on the Bitcointalk forum to save it. A group of developers got together and decided to upgrade the code, improving the code for PoS staking. In April 2014, DMDv2 was launched.
The new version of Diamond was based on Mintcoin and had a very different emission model. Instead of 8 years of constant PoS rewards, it would now take over 40 years to produce all the 4.38m DMD coins, with a constantly decreasing inflation rate. Diamond also switched to Groestl — a very efficient ASIC-resistant PoW mining algorithm, allowing users to continue mining using GPU just as Bitcoin mining was taken over by ASICs. It was the first time that a cryptocurrency successfully managed to switch to a different algorithm while retaining the blockchain, transaction history, and address balances.
With a slower emission and more reliable code, DMDv2 was well poised to become a popular store of value. But the community wanted to go further and decided to introduce masternodes, which were rapidly gaining popularity.
DMDv3: experimenting with masternodes
Masternodes are nodes that store a full and constantly updated copy of the blockchain, and provide additional services. They are used in such popular networks as DASH and PIVX.
DMD Diamond switched to a 100% PoS/Masternode algorithm in 2017, with 65% of block rewards going to masternodes and 35% to PoS stakers. The masternodes helped make transactions faster and more anonymous, as well as reduce the required number of confirmations, and made the Diamond blockchain more robust overall. However, the capacity still wasn’t high enough to realize the core vision of DMD as a blockchain that would be able to host many different projects — like Ethereum, but better. A new, much more powerful technology was needed — and that came with Diamond 4.0.
DMDv4: asynchronous consensus and fully decentralized governance
DMDv4 takes a bold step in an entirely new direction. While maintaining an independent blockchain, it switches from the Bitcoin codebase to that of Ethereum. Diamond 4.0 now supports smart contracts, is fully compatible with Ethereum and EVM. We’re also implementing a new consensus algorithm, HoneyBadger BFT. This is the first time that a newly-built Ethereum-based blockchain will use HBBFT, so the Diamond community is once again acting as trailblazers.
Honey Badger is the first fully asynchronous Byzantine fault-tolerant (BFT) protocol, meaning that it has no set block time and transactions can be processed instantly. With HBBFT, DMDv4 can achieve a throughput of over 400 tps per second. Blocks are created in a cooperative manner: all active validators can contribute transactions and seal the block together, making the consensus leaderless. This fits well with Diamond’s 100% decentralized model.
HBBFT is extremely energy-efficient. Moreover, it doesn’t have any orphan blocks and cannot be forked unintentionally. To make it even more decentralized, we added a dPoS (delegated Proof-of-Stake) based algorithm, whereas the system randomly selects those nodes who can add blocks to the blockchain (and earn the reward) out of the pool of candidates. Users can become candidates when others stake DMD coins on them, or by holding a sufficient amount of DMD on their own. However, no more than 50,000 DMD can be staked on a single validator, thus eliminating the risk of centralization. Our dPoS implementation is powered by the POSDAO algorithm: it is an adaptation of the system used by the xDAI chain.
DMDv4 is a tremendous step forward for the Diamond project and for the development of blockchain DAOs as a whole. In our upcoming posts, we’ll tell you much more about the network architecture and advantages — both for crypto users and for developers. Meanwhile, you can connect with the DMDv4 team here: https://t.me/dmd_coin
