NuCypher (NU)

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 Basics

  • Founded in: 2015
  • Mainnet release: Will be on 15-10-2020 according to their website (9-10-2020).
  • Based in:
  • Cryptographic infrastructure for privacy-preserving applications.

"Privacy layer for distributed systems and decentralized applications. NuCypher KMS helps dApp developers secure their data on the blockchain with decentralized proxy re-encryption as a service."

"NuCypher is a privacy layer for blockchains. It enables end-to-end encrypted data sharing on public blockchains (e.g. Ethereum) and decentralized storage solutions (e.g. IPFS). NuCypher allows users to conditionally grant and revoke access to data with multiple users at a time. NuCypher provides the backbone for applications that involve the transfer of sensitive data but also want to leverage the trustless and censorship-resistant nature of public blockchains."

History

"NuCypher founding and early days

MacLane Wilkison and Michael Egorov founded NuCypher back in 2015 to provide a data protection and encryption that allows users to move information and computation to the cloud securely. At a high level, cloud providers would only receive encrypted data, while users retain the associated encryption keys, and thus control over the information. This process, known as Proxy Re-Encryption (PRE), aims to minimize data leaks should the cloud service suffer a breach.

Early on, the team focused on working with industries that maintain large amounts of sensitive data like finance and healthcare, and at one point was running lab environments with several large banks. As a part of this progress, NuCypher secured a spot as a member of Y Combinator's Summer class of 2016. The accelerator later led a $750,000 seed round for the startup.

Transition to blockchain platforms

In 2017, NuCypher looked to adapt its product to smart contracts, which would provide the same secure storage guarantee to decentralized application (dApp) developers. This decision led NuCypher to adopt a token-based model featuring a decentralized infrastructure layer to reduce platform risk further. The team sought funding by way of a token sale to support its new direction. Despite the frothy initial coin offering (ICO) market of 2017, NuCypher decided to forgo a public token sale and ran a ~$4.4 million SAFT in Dec. 2017.

Following its first SAFT, the team built various early models of the NuCypher platform, including an internal federated testnet (Oct. 2018) and a similar private version with external node operators (Nov. 2018). After a trial run on one of its private testnets that featured actual staking with external partners, NuCypher launched a public testnet in Oct. 2019. The release of its public testnet coincided with NuCypher's second SAFT raise, which netted the startup another $10.7 million.

Road to production launch and WorkLock

NuCypher is in the process of launching its incentivized testnet event, dubbed "Come and Stake It," and is anticipating to launch its middleware layer on Ethereum some time in the first half of 2020. Once launched, users will be free to provide re-encryption services to dApps by staking NU tokens on the NuCypher platform. Participants will be able to acquire NU tokens via the WorkLock distribution mechanism, a smart contract that requires users to escrow ETH in exchange for NU.

Users can recoup their ETH deposit if they stake their NU tokens and produce some amount of work. Otherwise, participants will forfeit their escrowed ETH. NuCypher designed WorkLock to attract meaningful contributors to the network and incentivize staking participation, which are aspects that other distribution methods like airdrops often fail to address."

Token

Launch

  • Token sale ended 30-9-2020 and recieved $125,640,000.

"CoinDesk covered NuCypher as one of the buzzy initial coin offerings (ICOs) of 2017, but the company ultimately opted not to pursue a public token sale. Instead, it ran one SAFT for $4.4 million in 2017."

Token allocation

"The ongoing WorkLock is a new token distribution system unique to NuCypher. 22.5% of the initial total supply or 225 million NU tokens will be distributed this way. ETH token holders who wish to participate in the WorkLock will have to deposit ETH into the WorkLock contract and run a worker node for up to 6 months. In return, WorkLock participants who successfully run a node for 6 months will receive their ETH in full and an equal amount of NU in return."

"At network launch, the initial supply is 1 billion NU. The total supply is ~3.89 billion NU, 2.89 billion of which is distributed as inflation rewards to Stakers as per the Staking Economics paper. The initial 1 billion NU supply is released over a period of 5 years. More here.

The WorkLock is closed with >350,000 ETH locked and >2,000 nodes committed. Mainnet launches October 15."

33.9% SAFT, 20% company, 10.6% team, 22.5% WorkLock, 4% ecosystem, 2% university stakers and 1% incentivized testnet.

Utility

"Nodes on the network are incentivized through a combination of inflation (NU tokens) and fees paid by users of the network (ETH). The NU ERC-20 "work token" must be staked in order to run a node on the network."

Token Details

Stablecoin

Tech

How it works

"NuCypher will use Proxy Re-Encryption (PRE) to allow users to share and store private data on public networks securely. The network will enable three primary things:

Secrets Management – Ability to store encrypted secrets in any storage backend, while allowing data owners to conditionally grant and revoke access to said secrets. 

Dynamic Access Control – Grant or revoke access to data on demand or automatically under customizable, pre-specified conditions (eg. time-based, behavior-based). 

Secure Computation – Perform operations on encrypted data while preserving the confidentiality of the inputs and results."

 Mining

Staking

"Nodes on the network are incentivized through a combination of inflation (NU tokens) and fees paid by users of the network (ETH). The NU ERC-20 "work token" must be staked in order to run a node on the network. This stake is used to coordinate the network by allocating work to performing nodes and as collateral to disincentivize malicious or incorrect behavior. Learn more."

Liquidity Mining

Layer Two

Different Implementations

Interoperability

  • Repeatedly mentions it starts with Ethereum but will cover other blockchains as well in the future (9-10-2020).

Other Details 

WorkLock

"The NuCypher team designed the WorkLock to onboard nodes to the live NuCypher network. The goals of the WorkLock are to:

- Distribute NU to network participants that intend to provide threshold cryptography services on the network

- Disincentivize use of NU outside of the NuCypher network

- Provide an efficient way to onboard threshold cryptography nodes onto a distributed network

- Be permissionless and decentralized"

Privacy Method being used

Compliance

"Anyone who wants to participate in the CoinList WorkLock must go through KYC/AML (Know Your Customer/Anti-Money Laundering) checks. However, if you choose to participate in the WorkLock without CoinList, you may not have assistance running your own node and there will be a maximum and minimum ETH stake."

Oracle Method being used

Their Other Projects

KEANU

"Both NuCypher and Keep polls received unanimous support from their respective community and passed with 100% of votes cast in favor of the proposals. Now, NuCypher and Keep Network teams will collaborate to implement the KEANU merge proposal. The development teams will move now forward with the integration plan, which consists of four phases:

  1. A new staking contract, supporting both NU and KEEP as work tokens
  2. A DAO, managed by stakers in the new contract
  3. Deploying the random beacon and tBTC v2 on KEANU
  4. Integrating the client networks"

Governance

DAO

"The NuCypher DAO is the governance entity of the NuCypher network. Powered by Aragon, NU stakers can propose and vote on changes and updates that will affect the NuCypher protocol. The DAO will be based on a one token one vote model and anyone currently staking NU can participate."

Treasury

Upgrades

Roadmap

"NuCypher mainnet is scheduled to launch shortly after the WorkLock ends. There are many projects like encrypted medical record applications, encrypted chat platforms, and encrypted decentralized “Dropboxes” that have been built during NuCypher hackathons that plan to use the NuCypher mainnet.

After mainnet launch, the core development team plans to continue growing the ecosystem, gathering community feedback, and building new feature sets for the NuCypher protocol."

Audits

Bugs

Usage

Projects that use or built on it

Competition

Coin Distribution

Pros and Cons

Pros

Cons

Team, Funding, Partnerships, etc.

Team

Funding

"Raised $10.7 million in a simple agreement for future tokens (SAFT) led by Polychain Capital. Other participants in the round include Bitmain, Bitfury, Y Combinator Continuity Fund, Compound VC, Notation Capital, DHVC, Hashed, Arrington XRP Capital and CoinFund."

Partners

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