10 October 2020
What is NuCypher?
The demand for decentralized storage networks has grown over the last few years as big-tech companies across the globe have been running after amassing user-data to expand their businesses while putting user-privacy consistently at risk. As a result, legislation has been introduced around the world to help mitigate these risks, including GDPR and CCPA; however, this is only a Band-Aid to the greater issue.
NuCypher has initiated a blockchain project to solve this issue at its core by enabling companies to encrypt data before uploading it to decentralized storage networks.
NuCypher employs an advanced form of flexible cryptography dubbed proxy re-encryption. Specifically the nodes of the decentralized NuCypher network expose APIs for threshold signatures and other functions that enable administrators to grant and revoke access control, secrets management, and delegated signing. The NuCrypher network serve as middleware between DApps (decentralized applications) and the decentralized storage networks.
NU ERC-20 Token and Its Genesis Distribution
The NU token is the native cryptocurrency of the decentralized NuCypher network and runs using the ERC20 protocol. The NU token is compatible with the “work token” model wherein the service provider stakes the native cryptocurrency to the network and thus gets the license to work on the network.
In the case of the NuCypher Network, this work is threshold cryptography services that facilitate use cases like access controls and secrets management. The fees paid by users for availing NuCypher services is distributed to the stakes as rewards as well as the inflation subsidy. Stakers can also participate in NuCypherDAO, the governance platform of the network.
In a blog post, NuCypher team notes: “In the case of our network, the NuCypher DAO will be the actual owner of the network’s smart contracts, and all decision-making in the DAO will belong to the community of stakers”.
Looking at the genesis distribution of NU tokens, the NuCypher network will process an initial supply of 1 billion NU. However, the total supply for NU is approximately 3.89 billion of which 2.89 billion shall be distributed as an inflation subsidy to stakers.
The NuCypher community and followers are excited about the mainnet launch of the NuCypher network next week. The launch will potentially market the beginning of the end of electronic imperialism.
NuyCypher Mainnet and Worklock Smart Contract Gathers 353,913 ETH
The NuCypher WorkLock is the network’s novel distribution model which will be used during the mainnet launch on October 15th. The NuCypher team devised the idea of WorkLock smart contracts to bootstrap its cryptography network and maintain the highest possible level of decentralization.
For people interested in running the NuCypher node, the participants first need to stake their ETH to receive the network native ERC20 token NU. Subsequently, users stake these NU tokens to run the NuCypher threshold cryptography node and be a contributor to the democratic platform.
Besides, the NU stakers also earn inflation rewards as well as ETH fees paid by the NuCypher network users. Thus the NuCypher WorkLock served as an escrow and a gateway to receive the NU tokens required to operate the NuCypher node.
The NuCypher network concluded the WorkLock deposit event in the last month of September. The latest update by NuCypher notes: “In total, 353,913 ETH (>$125M USD equivalent) was locked in the WorkLock smart contract by 2,011 nodes. CoinList escrowed 147,465 ETH on behalf of 3,685 participants and will be running 8 nodes on the network”.
During the mainnet launch on October 15, 22.5% of the initial supply of NU (~225M NU) will be distributed via the Worklock smart contract. Upon the official network launch i.e. the activation of the mainnet, participants with a minimum contribution of 5 ETH can claim the “stake-locked” NU tokens and thus start running a node on the NuCypher network.
All participants with the minimum escrow contribution will receive 15,000 NU. After the allocation of the minimum stakes, the network will distribute the remaining NU tokens on a pro-rata basis to participants who staked over 5 ETH.
Once the participants have successfully run the NU node for six months, they can also recover their escrowed ETH from the WorkLock smart contract. It will be up to the participants’ discretion to recover the escrowed ETH either all at once or incrementally over time. In case, the participants decide to withdraw earlier or perform any malicious activity, they will have to forego the staked ETH.
Explaining the working of the WorkLock smart contract, NuCypher co-founder MacLane Wilkison said: “What it allows you to do is stake or escrow ETH into this WorkLock smart contract. You lock it up for six months from mainnet launch and that grants you this new stake that you can use to operate a new NuCypher node”.
The WorkLock smart contract is designed to be permissionless such that anyone can participate by directly interacting with the smart contract.
Anyone involved in blockchain technology and cryptocurrencies should be excited about the foundation that NuCypher has address user privacy. There will be significant attention around the Mainnet and Worklock launch on October 15th, especially as this is one of the most high-profile ETH 2.0 staking projects to have been launched.