The WorkLock is finally here! The WorkLock is NuCypher’s novel network node setup mechanism that will be used to launch the network. It allows participants to temporarily stake ETH in order to receive NU for the exclusive purpose of running a NuCypher network node.
- WorkLock escrow period: September 1, 00:00 UTC - September 28, 23:59 UTC
- Cancellation window: September 29, 00:00 UTC - September 30, 23:59 UTC
- Minimum escrow of 5 ETH (unless participating via CoinList).
- 22.5% of initial supply; 225M NU
- NU stake locked for 6 months (starting at mainnet launch, not from when you escrow)
- Time to recover escrowed ETH: <= 6 months (from network launch)
- Mainnet launch expected in October
Timeline & Mechanics
NuCypher’s WorkLock will begin on September 1, 2020 at 00:00 UTC. The contribution period will be open for four weeks, ending September 28, 2020 at 23:59 UTC. You can cancel your bid anytime during the contribution period and for two additional days (the “cancellation window”) ending on September 30 23:59 UTC.
22.5% of the initial supply of NU (225M NU) will be stake-locked through the WorkLock. Once mainnet is activated (referred to as "network launch"), participants that made at least the minimum contribution of 5 ETH, will be able to claim their “stake-locked” NU and start running a node on the network. Network launch is expected to occur in October 2020. All participants making the minimum escrow are guaranteed to receive 15,000 NU (the minimum required stake to operate a node). (Note: This does not apply to those participating via CoinList, in which case the amount of NU may vary). Once the minimum stakes are allocated, the remaining “bonus” NU will be allocated pro rata across participants that staked more than the minimum 5 ETH stake.
While we believe it is unlikely, it is possible that there may be certain edge cases in which large participants are partially refunded a portion of their escrow in order to prevent them from receiving a stake that exceeds the maximum allowable stake.
After successfully running a node for six months or less (from network launch; the exact time depends on your individual staking configuration as well as the staking participation rate across the network), participants will be able to fully recover their escrowed ETH. We anticipate that participants can recover their escrowed ETH incrementally over time or all at once, at their option.
NU that is pre-staked for network nodes via the WorkLock will otherwise behave like any other staked NU and Stakers can optionally wind-down or extend their stake, re-stake rewards, etc.
You can read more about the WorkLock mechanics and explore several example scenarios here.
⚠️ 🚨Notice to WorkLock Participants🚨⚠: Your participation in the WorkLock program represents an interaction with the decentralized network and not with NuCypher the company. Just like with other aspects of the network, the WorkLock smart contract is decentralized and is beyond the control of NuCypher. All ETH contributed during the WorkLock will be automatically returned to the participant by the Worklock smart contract after the WorkLock participant has provided Proxy Re-Encryption services for the required period of approximately six months from network launch. If a participant does not provide the required services, their ETH will remain escrowed in the WorkLock smart contract. Please carefully consider this before choosing to participate in the Worklock program. The WorkLock smart contract has been audited by both NuCypher core developers and Trail of Bits. However, there are no guarantees and a certain degree of smart contract risk remains.
The WorkLock is designed as permissionless such that anyone can participate by interacting with the smart contract directly. The canonical way to participate is via the NuCypher CLI (guide here). This is the self-sovereign way to participate in the WorkLock.
There are two 3rd party web UIs developed by community members during Come and Stake It, our incentivized testnet. These UIs can connect to web3 wallets like Metamask, and allow you to stake directly from there via a friendly and intuitive web UI. You can deploy these applications locally by following the GitHub links below. Alternatively, we are hosting versions of both apps on our infrastructure during the WorkLock at the URLs below.
Finally, you can also participate via CoinList. Participating via CoinList is the simplest way to join the WorkLock and is the best way to participate for those who don’t have the minimum staking amount and/or want assistance with staking and running nodes.
Other ecosystem participants may also be offering pools or other participation options. In every case, you should exercise appropriate due diligence before participating.
You can run your own NuCypher node as per the instructions here.
There are also many staking infrastructure providers who can run nodes on your behalf. A partial list can be found here. If delegating to a provider, you should exercise appropriate due diligence. (Note: Delegation does not mean pooling. It is not possible to pool multiple WorkLock stakes into one worker node).
The #staking channel in NuCypher’s discord server, is a place for stakers and node operators to troubleshoot, ask questions, and provide mutual technical support.
⚠️ 🚨Gas is currently very expensive on the Ethereum network. Nodes must confirm activity daily via an ETH transaction, which costs ~200k gas. Please consider this when deciding whether to participate, especially for small stakes. 🚨⚠
NU Genesis Distribution
The total initial supply is 1 billion NU. 225 million NU (22.5% of initial supply) is allocated to the WorkLock. WorkLock NU is under a 6-month stake lock. To unlock your NU stake and recover your staked ETH in 6 months or less (from network launch), WorkLock participants are required to run a NuCypher node. Staked ETH can be withdrawn incrementally as work is done.
The total supply of NU is ~3.89 billion and the 2.89 billion difference is expected to be distributed as an inflation subsidy to Stakers over time. You can read more about the inflation schedule and full staking economics here.
The NuCypher Network and NU
The NuCypher Network is a decentralized threshold cryptography network. Nodes in the network expose APIs and runtimes for cryptographic operations like threshold proxy re-encryption, threshold signatures, and more, enabling use cases like access control, secrets management, and delegated signing. The network is anticipated to be primarily used as middleware by other applications, several examples of which can be found here.
NU is an ERC20 compatible “work token.” In the work token model, a service provider stakes (AKA bonding) the native token of the network to earn the right to perform work for the network. In NuCypher’s case, that work is threshold cryptography services, which enable use cases like access control and secrets management.
NU stakers are able to earn fees paid into the network by users (in ETH), as well as an inflation subsidy (in NU). They are also able to participate in the NuCypher DAO, which governs the network.
Information on the expected distribution and release schedule for NU can be found in the charts below as well as in the NU release schedule here, staking economics paper here, and simplified inflation/staking economics spreadsheet here. It is possible that the below schedules and estimations may change.