Keep + NuCypher: Token Design Proposal for KEANU
Six Token Proposals for KEANU TokenThis article was published on the Figment forum, author: Elizabeth Barnes
In the past few weeks, the Keep and NuCypher communities have developed six token designs to integrate with the new network currently referred to as KEANU, to deploy tBTC v2 and continue with threshold encryption. If you are not familiar with the merger criteria, it is temporarily named KEANU. The merger combines the products, staking networks, development work, and communities of the existing protocols. NuCypher and Keep will not disappear with the staking network, and participation in KEANU should be optional.
For more detailed information about the network merger, I recommend checking out the previous article. Read on for more information about the token designs.
The two teams are launching a new network but have not provided token proposals for this new network. In this case, they have let go. In this article, I will briefly introduce the six token proposals surrounding the forum and provide a good summary of information for the representatives to negotiate further with the new network.
All proposals center around allowing NuCypher and Keep token holders to have a 50/50 stake in the network. Initially, this new network was reserved for the onboarding process.
Proposal One:
The two main goals include: (a) having a large number of tokens available at the start of trading, and (b) a rapid allocation owed to KEEP and NU holders.
The proposed token is inflationary, with 100 million T1 tokens allocated in three phases in the first year.
Phase One: Initial allocation -- 50 million distributed to KEEP and NU holders through staking and Merkle root.
Phase Two: Market release, at which point tBTC v2 will be ready for launch -- 20 million sold to the DAO treasury from funds raised through tBTC.
Phase Three: Start distributing 30 million rewards in tBTC and T1.
The proposal does not provide details regarding NuCypher, suggesting that NU token holders should participate. However, the general idea is that users will have 45 days to stake their tokens in this staking contract before the staking weight begins to accumulate. Those who start staking their tokens within the first 45 days will receive an additional equity weight allocation equal to half of their staking rights.
Proposal Two:
The design goals of this proposal focus on actively rewarding funds and supporting the release of tBTC v2.
The initial supply will be 2 million tokens, intended to reward those who have been staking since the first issuance of Keanu. The proposal retains some key distribution features:
75% for existing token holders (this percentage is distributed 50/50 between Keep and NuCypher token holders).
A 12.5% drop in staking for the first six months. Anyone staking TBTC V2 will be eligible for staking coins. This is to incentivize people to start staking on the network quickly.
A 7.5% fee provided to stakers based on the staking time x staking amount in the existing network. This is based on the amount and time staked in the network to keep the tokens in the hands of active network users and establish incentives to maintain interests in the existing network.
The proposal also suggests an annual issuance of 2% and reserves funds for DAO governance and community pools.
Proposal Three:
The main goal of this proposal is to merge the previous two proposals while providing a simple token design and bootstrapping tBTC v2. The authors of the proposal explicitly state that stakeholders can opt out without receiving new tokens. Anyone can retain their founding tokens.
Some key distribution details include the minting of 500 million tokens at launch, with plans to distribute tokens through staking and token sales. The staking drop will last for 18 months. In the initial months, NU and KEEP can be staked to receive T3. After 90 days, this mechanism will conclude, and T tokens will be the only tokens that can be staked to earn T rewards.
Current KEEP and NU holders will drop by 45% (225 million).
5% (25 million) of investors will flow out to past risk bearers in both networks.
15% of the tokens will be sold. This is to generate liquidity and incentivize new investors.
50% of the total supply will be used to bootstrap tBTCv2 through the treasury. 20% of the funds allocated to the treasury will be locked for future projects, mergers, and bootstrapping. It will be gradually unlocked over the next five years.
T3 is a working token designed to be held as a working token and for governance. All owners of KEEP and NU can claim their allocation. People can acquire T3 by exchanging tBTC. T3 will also be used to earn rewards, LP, and coverage. Ultimately, the weight of Keep and NU in rewards will decrease, while the weight of active participation in T will increase.
Proposal Four
The goal of Proposal 4 is to merge aspects of the first three proposals into one, with particular attention to transitioning stakeholders to WorkLock 2.0 and preventing "zombie" Keep or NuCypher, otherwise, activities on the other two networks will shift to KEANU and abandon the old networks.
The authors wish to switch from staking to WorkLock 2.0 because WorkLock 2.0 comes with name recognition features and focuses on how to host collateral and run nodes to earn T4. Token holders will delegate their NU or Keep to run tBTC v2 nodes and earn T4. WorkLock 2.0 should allocate more T4 to stakers with longer lock-up times.
Participants will receive T4, or their NU inflation subsidies will be delegated on-chain. Those who choose not to participate will not receive T4 tokens but will still need node operators to run tBTC v2, incentivizing node operators to join WorkLock 2.0.
If the proposal fails, those who stake NU into WorkLock 2.0 will be able to withdraw all of it.
Proposal Five
T5 is a brief proposal that offers an alternative for token sales. It also aims to allocate most tokens to stakeholders through farming and achieve greater token floatation at issuance. After the release of tBTC v2, a one-week concentrated farming period will begin immediately, during which 15% of the total supply will be allocated to parties providing liquidity for TBTC.
After this, farming rewards will be released, and 10% of the supply will be airdropped to current KEEP / NU holders. The remaining tokens will be allocated as follows:
10% for treasury bonds
10% for liquidity rewards
55% for KEEP / NU / T stakers. The staking capacity of NU / KEEP will continue to decrease, while the capacity of T5 stakers will gradually increase.
Proposal Six
This proposal aims to provide a simplified approach to token design. The authors also state that, unlike previous proposals, it does not include any details or suggestions on how the KEANU governance DAO will work.
First, the proposal suggests an initial supply of 2 billion tokens, with existing NU token holders able to access 4 billion tokens, while current KEEP token holders can access 45% of the tokens, with 10% allocated to the Keanu DAO.
This supply of tokens is fixed, similar to the supply of Keep tokens. The issuance of NuCypher follows a timeline, meaning the NU number will continue to increase, theoretically surpassing the numbers of Keep and T6. Therefore, to maintain an equal distribution.
- NU and KEEP tokens will continue to exist and trade on centralized and decentralized exchanges.
There are several ways to build a token launch mechanism:
WorkLock 2.0
During the 90 days in July, any NU or KEEP holder can lock their tokens for four years to gain the right to receive T6 tokens at $0.001.
When Keanu launches, people will receive T6, and all T6 will be locked for three months.
After 90 days, NU and KEEP tokens will be directly exchangeable for T6. A simple exchange will be conducted through LP, which will retain all T6 tokens allocated to KEEP / NU holders.
T6 CDP
A lending protocol will be deployed that allows NU or KEEP tokens to wrap all collateral and borrow T6 tokens against that collateral.
Anyone holding NU or KEEP can wrap that asset.
The inflation design model should be similar to eth2. The rate of inflation rewards will slowly decrease as the staking ratio increases. The exact curve is pending.
Current Thoughts
There are many ways to launch tokens on the new network, especially since this merger has never occurred in the Web 3 space (to my knowledge). By the way, there is no need to add new tokens for the network during the team's introduction of this new network.
These are proposals introduced by the community, encouraged and supported by the team. That said, there are two ways to handle the token model in this case.
Establish parameters to stake NU and Keep, in return for receiving T tokens in a secure and defined manner, so that NU and Keep holders can reclaim their original tokens in case the network is unsuccessful. This protects original token holders from potential failure.
Or pause the inflation of NU and KEEP (thus fixing them as tokens) and lock NU and Keep tokens for a longer time. By pausing inflation, this will place both networks in an equal competitive environment. For example, if NU maintains its inflation rate, one day NU could surpass KEEP, giving NU holders the ability to hold a larger share in the new network.
To ensure a fair distribution of the new network tokens, both networks need to pause inflation before the network launch to ensure a 1 KEEP = 1 NU split.
We cannot speculate on the price of the new tokens, and there are many factors to consider regarding the development of NU and KEEP as well as KEANU.
