Dash halving

What is Dash: definition and brief history

Dash is a fork of Bitcoin and one of the first autonomous decentralized organizations (DAOs). Despite being a fork, Dash has little in common with Bitcoin, as its developers added many innovations such as:

• PoS algorithm,
• masternodes,
• sender and receiver address hiding feature,
• additional transaction types (InstaSend, PtivateSend) and more.

The project was initially founded under the name Xcoin in 2014. Then, it was renamed Darkcoin, emphasizing the close connection of the cryptocurrency with the darknet, and only in March 2015 did the project receive its current name.

A curious fact: In English, the word "dash" translates as "dash", but in fact, it is an abbreviation of Digital Cash, which means "digital cash".

Dash is a hybrid two-tier protocol that runs simultaneously on Proof-of-Work (PoW) and Proof-of-Stake (PoS). In other words, users can both mine and stake the DASH cryptocurrency.

Dash halving

Halving is originally a two-fold reduction in the reward to miners for a mined block. The halving mechanism was first introduced in the Bitcoin protocol: roughly every four years, miners' rewards are reduced by a factor of 2 — 50, 25, 12.5, 6.25 BTC, and so on.

Halving refers to a deflationary mechanism that reduces the issuance rate: the generation of new coins in blockchain protocols. By design, halving should increase the cryptocurrency rate while maintaining demand, and, as practice shows, it works.

Difference between Dash and Bitcoin halving

In the Dash protocol, halving works differently than in Bitcoin. In fact, this mechanism in DASH cryptocurrency is not even halving in the usual sense, as the reward is not halved but decreases by only 7.14% for every 210,240 blocks mined — it takes approximately 383 days.

Despite this halving feature of Dash, for some reason, the developers decided to keep the same name, which can confuse some users.

On the other hand, Bitcoin halves the reward for miners after another halving, which is one of the main differences between the blockchains. We have described the Bitcoin halving process in detail in a separate article.

However, at the same time, Dash halving occurs almost four times more often, approximately every year. In other words, over the last four years, the remuneration of Dash miners has decreased by 45%, i.e. almost twice. Thus, regarding the rate of decline in issuance, Dash is slightly behind Bitcoin.

Another root difference of Dash mining is that miners do not receive total remuneration for the mined block: 90% of the amount is distributed equally between miners and masternodes, and the remaining 10% goes to the Dash ecosystem development fund. Also, the two cryptocurrencies have different maximum issuances: Bitcoin has 21,000,000 BTC while Dash has even less, 18,900,000 DASH.

The last halving of Dash took place in June 2022, reducing the reward to miners per block from 2.31 DASH to 2.05 DASH.

According to an OKLink reviewer, the next Dash halving will occur on July 8, 2024. It will result in a further 7.14% decrease in the reward for a mined block on the Dash network, from 2.05 DASH to approximately 1.90 DASH.

How will halving affect Dash?

Unlike bitcoin, which updates its historical maximum after each halving, DASH has shown a negative trend in recent years: in April 2018, the coin ranked 12th among all cryptocurrencies, and its capitalization exceeded $4.5 billion. In the same year, DASH even became the most popular cryptocurrency in Venezuela, according to Der Spiegel newspaper.

DASH is currently only ranked 131st on the CoinMarketCap rankings with a capitalization of just $433 million. DASH is trading at $37.3 — about 97% down from its peak (ATH) of $1642 in December 2017. Regulatory attacks played no small part in this, which caused DASH and other anonymous cryptocurrencies to be removed from crypto exchanges for a while.

However, it is worth noting that despite all the negative factors, DASH remains one of the significant anonymous cryptocurrencies alongside the leading Monero and Zcash. The DASH cryptocurrency is still traded on major exchanges such as Binance, Coinbase and Kraken.

In addition, the project is not standing still: developers are releasing protocol updates and working on new services. According to the Dash roadmap, in the near future, the project team plans to launch the DashPay service, a test and then the leading Dash Platform network, on which NFT support, a virtual machine for smart contracts and an inter-blockchain communication (IBC) protocol will be added later.

Dash's prospects are in big question, especially considering that the DASH cryptocurrency has failed to update its ATH and even come close to it. Onchain statistics are not on Dash's side either: there has been no growth in the number of users or transactions over the past 3 years.

First, anonymous cryptocurrencies are not in high demand, as most are already anonymous unless you make transactions through exchanges where you undergo verification (KYC).

Secondly, competition in the crypto market has grown tremendously in recent years:

• Layer-2 solutions,
• DEX exchanges that allow anonymous exchange of cryptocurrencies directly on the blockchain without intermediaries,
• infrastructural blockchains and zero-layer networks ("blockchains for blockchain creation"),
• modular blockchains,
• memcoins,
• GameFi and MetaFi platforms, and many others have emerged.

However, perhaps the launch of new products and the Dash Platform network will rectify the situation and improve the cryptocurrency's position in the market.