Threshold Time ~ Issue #1 ~ January 2022
Welcome to the first issue of Threshold Time — a digest of some of the most newsworthy and exciting developments of the Threshold Network, which formed from the Keep and NuCypher network merger. You are receiving this because you subscribed to updates for NuCypher or Keep; please see the unsubscribe link at the bottom if you do not wish to receive this newsletter.
NETWORK UPDATES
In early 2021, members of the NuCypher and Keep communities started informal talks on a potential merger between two of their favorite projects. After reaching out to both teams it became more serious. This eventually led to a major proposal: to start the first ever decentralized, on-chain protocol hard merge (NuCypher forum proposal, Keep forum proposal).
A number of critical milestones have passed since then, including:
- Both communities voted nearly unanimously for the merge
- There were extensive proposals and discussion around proposed structures for a merged network and token (see First-ever Crypto Protocol Merger section below)
- The token proposal, DAO structure, stable yield reward mechanism and ESDM proposal all passed with overwhelming support
These proposals have laid the ground-work for how the Threshold Network will function and be governed organizationally and economically.
Starting out 2022 with a bang, Threshold Network launched on January 1st, successfully completing the first-ever merger of two crypto protocols!
- Holders of $NU and $KEEP tokens are now able to convert them to $T tokens* using the vending machine on the NuCypher website.
- The contracts that allow KEEP and NU stakers to move their staking to Threshold will be deployed in the coming weeks.
- T already has liquidity on two major DEXs, Curve and Uniswap.
- The Threshold DAO Treasury is working on a proposal for how tokens will be allocated to various activities needed to grow the network. You can get involved in that important process via the Integrations Guild (see below).
- * Learn all about wrapping in the dedicated section below.
THRESHOLD NETWORK: THE FIRST-EVER CRYPTO PROTOCOL MERGER
Since this is the first ever on-chain hard merger of two existing protocols, there was — and will continue to be — a lot of unchartered territory to explore. At the heart of this is the role the $NU and $KEEP tokens have played in each of their respective networks, and thus what the token structure of the new combined network could look like.
Over a period of 3 months in spring of 2021, a number of community members submitted various proposals with distinct pros and cons. Extensive discussion led to the community taking pieces of each and adding new ideas until alignment on the final approved token proposal known as ‘proposal rc0’ (first release candidate). This proposal laid the groundwork for the T token and the token merge details recently executed.
Token proposal rc0 summary:
- Creation of a new Threshold Network token (symbol: T)
- Both NuCypher and Keep Network receive an equal share of the newly created T tokens. Token prices and market cap of NuCypher and Keep are not a factor.
- Token supply: 10B tokens at launch
- 4.5B tokens available to existing NU holders
- 4.5B tokens available to existing KEEP holders
- 1B tokens allocated to the Threshold Network DAO treasury
- Token inflation: variable (a DAO-governed parameter to be determined)
- T tokens are acquired by existing NU and KEEP holders through locking their NU or KEEP in a ‘vending machine’ and receiving T tokens in return (a process known as ‘wrapping’, which avoids a taxable event in many jurisdictions).
- Token issuance (inflation) suspended on both the NuCypher and Keep networks. This determined a fixed total supply, which is needed to calculate the amount of T received per NU or KEEP. No more new NU or KEEP tokens will be created.
- The amount of T received per NU and KEEP is known as the token factor. The token factors were calculated once, by dividing the amount of available tokens (4.5B) by the amount of tokens in existence (see infographic below).
- These token factors are final. They are part of the ‘vending machine’ contracts for NU and KEEP and will never change.
- Wrapping will be possible as long as the Ethereum network is live. There is no deadline or rush, and wrapping is optional. A user wrapping his NU or KEEP on day 1 will receive the same amount of T as a user that is wrapping their NU or KEEP at any point in the future.
This infographic describes the above visually:
T TOKEN WRAPPING: WHY AND HOW?
Why wrap your NU and KEEP to T?
Threshold Network will combine everything that was unique to each project: token staking, coverage pools, signers earning fees from tBTC, the random beacon, and proxy re-encryption, to name a few, will all be on the new network. All the contracts will be transferred and deployed to Threshold, so in order to participate in the new ecosystem one needs T tokens.
How to Wrap to T?
Here’s a step-by-step video created by @nous_eth, a community member from the Threshold Marketing Guild, on how to wrap your NuCypher/Keep token to T. As explained in the infographic above, you will receive ~4.78 T tokens for each KEEP token wrapped and ~3.26 T for each NU token. Note that if you ever decide to “unwrap” your T tokens, you will receive the exact amount of NU/KEEP back, and it will also have to be from the same wallet address you had previously wrapped your tokens.
INTRODUCING THE THRESHOLD NETWORK COUNCIL
“The elected council will hold the power to veto any proposal that passes from either the Token Holder DAO or the Staker DAO. This is intended to be an extra security mechanism in the event that a dangerous proposal passes in either DAO subsection. The exact process will be determined later as the DAO approaches a launch.” — Threshold Network DAO proposal
The Threshold Council was formed to have 4 members from NuCypher, 4 members from Keep, and one neutral seat — for a total of nine seats, each serving a one-year term. This gives both projects an even ground in a decentralized merge and a voice for both projects.
It was a close race and a number of qualified candidates were nominated but here are the end results from the voting poll: Keep Voting Results and NuCypher Voting Results
- Neutral appointee: @lakejynch
- Keep representatives: @Ben_Longstaff @Evandro_Saturn @Eastban120 @Naxsun3301
- NuCypher representatives: @newmichwill @stefanobernardi @derek_pierre Bogdan Opanchuk
Thank you to all who participated, and congratulations to our new Council members!
CREATING A VIBRANT DAO: BRING ON THE GUILDS!
One part of a decentralized autonomous organization’s structure is how to make decisions; for example on protocol parameters, fees, budgets, etc. This is the part of the DAO that exists on chain. Another important part of a functional DAO is to have working groups focused on different areas of the project. On one side these can generate the inputs needed for the DAO to enable informed decision making, and on the other side these will request funding from the DAO in order to execute their work.
In parallel to the on-chain DAO being created, two Threshold working groups have emerged from community members focusing on two priority areas for the project. We have decided to call these working groups, “guilds”. It is expected that over time additional guilds will be formed and evolve.
Integrations Guild
The Integrations Guild is about building relationships with other protocols and DAOs. Threshold’s flagship products tBTC and proxy re-encryption both will thrive only when they’re widely adopted. For tBTC this means to build up awareness and use cases ahead of the v2 bridge launch. We research protocols and dApps where tBTC could be used in liquidity pools, as collateral or for farming opportunities. We reach out to the dev teams and the DAOs, build the connection, and follow the onboarding process. We offer co-marketing efforts, joint AMA’s, and are open to deepening this association in several ways.
Successful examples are active liquidity pools on Saddle, mStable and Curve protocols. Currently we are actively working on getting us on to Maker, Abracadabra, Alchemix, Euler, Notional, KeeperDAO and many others.
The guild also works towards integrations with protocols like UMA, BProtocol and Chainlink, since their products and services are very beneficial for Threshold in many aspects. These are longer-term efforts that perhaps take longer to set up but have potential to yield many benefits as the ecosystem evokes and those protocols expand.
To participate, see the bottom of this newsletter for instructions on accessing the discord channel.
Threshold Marketing Guild
The Threshold Marketing Guild has formed to spread the word about Threshold, help ensure clarity in the public regarding the network’s mission and channel the enthusiasm of community members into resources beneficial to all.
In addition to creating Threshold Time, the guild provides guidance for and feedback on those creating educational content (blogs, videos, memes, posts, “long-ass threads”, etc.). We are the bridge between the NuCypher / Keep teams and the broader community.
To participate, see the bottom of this newsletter for instructions on accessing the discord channel.
ART, MEMES — SO THRESHOLD!
What better illustration of the talents and passion in the Threshold community than this video by OhmaGa?
But wait, there’s more! Thanks to @nous_eth.
INTERACT WITH THRESHOLDERS
- Twitter Space call: Wednesdays at 8pm EST
- Marketing Guild call: Thursdays at 3pm EST (Discord > Voice channels > The Hangout)
- Integration Guild call: Tuesdays at 11am EST (Discord > Voice channels > The Hangout)
- ETHDenver: meet fellow Thresholder’s and Keep/Nu team members in person February 16–20!
ADDITIONAL THRESHOLD RESOURCES
Websites: Threshold.network, Keep.network, Nucypher.com
Discord: Threshold
Twitter: Threshold, NuCypher, Keep
Threshold Content Hub
Threshold Github
Threshold Reddit
Threshold Telegram
Have questions, comments or suggestions for this newsletter? We’d love to hear them! Please hop into the Threshold Network discord and get involved. If you’d like to provide feedback on the newsletter or marketing, join the Threshold Marketing Guild by going to the #claim-a-role channel at the top of the discord and select the emoji (the Integrations Guild is available there, too), which will open the guild channels to you.
