In this paper a protection scheme is provided to protect microgrid by considering the problems that are generated by addition of distributed generators to distribution networks and change these networks from passive to active. At first, changes in microgrid conditions that can affect short-circuit current is explained. Then Based on these changes, an algorithm is proposed to update relays settings. The algorithm can be used for both instantaneous and inverse time relays. In this protection scheme, central unit has no place and relays are responsible for monitoring microgrid and update their settings. In other words, this protection scheme is an adaptive and decentralized microgrid protection scheme. Instantaneous overcurrent relays are used in this paper. To avoid storing large amounts of setting data in relays memory, a method for calculating pickup current of instantaneous relay is provided. Since digital relays used, a new characteristic curve for instantaneous relay for better performance in the field of backup protection is defined. This new characteristic curve has two peakup currents: one of them for main protection and the other one for backup protection. Then coordination of instantaneous relay using the new characteristic curve is explained. At the end, this protection scheme is implemented on a microgrid.