protocols

Q&A on Codename Keanu


We sat down with Protocol Specialist, Viktor Bunin, to discuss the challenges and opportunities around the upcoming merger of Keep and NuCypher.

Q&A on Codename Keanu

By Bison Trails · Jun 16 2021

We sat down with Protocol Specialist, Viktor Bunin, to discuss the challenges and opportunities around the upcoming merger of Keep and NuCypher.

Q: Hi Viktor! Tell us about Codename Keanu, the proposed merger of the Keep and NuCypher protocols. What was the impetus for the merge?

Keanu is incredibly exciting because it is the very first decentralized protocol merger. This type of merger is extraordinarily complex, but the potential positive impact for the teams, communities, and users is high.

Keep and NuCypher are incredibly similar in many ways. They are both work token models built on Ethereum that are on the cutting edge of cryptographic tooling. Keep started out by building a random beacon and tBTC while NuCypher began with proxy re-encryption. But given their similarities, they had a choice—continue as they are and begin competing or join forces and work together.

Community is the killer feature. The people you have around you building together are what makes the difference for projects to succeed or fail. This merge is an opportunity for the Keep and NuCypher teams and communities to combine forces to build the most decentralized and advanced cryptographic tooling network in the world.

Q: What are the benefits of merging the two protocols?

Keanu has four primary benefits:

  1. Cooperation instead of competition. Crypto isn't about being the biggest fish in a small pond, it's about expanding the pond. Keep and NuCypher merging will enable them to pool their resources (tech, stakers, communities, etc.) to win a bigger market instead of splitting a smaller one.
  2. Synergistic modularity. Keep and NuCypher are both modular. They can add support for new applications and uses, which stakers can opt into supporting. Stakers on the new network will have a greater selection of modular components (proxy-encryption, random beacon, etc.) from which they can earn fees.
  3. Increased fee revenue. Work token models need to earn fees to be sustainable. Keanu will diminish the networks’ reliance on inflationary incentives and help make the combined network sustainable off of fees alone much faster.
  4. Greater decentralization. Both teams and communities are true believers in decentralization. By combining forces and sharing ownership in a single protocol, the new network will become one of the most decentralized protocols in the industry.

In addition, most protocols have only a single dev team, but the new network will have two stand-alone teams with the ability to add more. This is where it gets truly interesting! Because the network will be modular, sustained on fees, and decentralized, it is possible for new teams to develop on the network! Through governance, teams can get funding, create their own modules, bootstrap stakers, not worry about exchange listings, and much more.

Q: Are there any potential risks?

There are two key risks to Keanu.

First, the teams and communities will need to transition from running two independent protocols to collaborating on just one. Although the teams and communities are highly ethos-aligned, there’s going to be a forming and storming period as everyone figures out how to work together.

The second risk is on the technology side. This merge is one of the most technologically complex undertakings in crypto (likely second only to the eth1 → eth2 transition). The teams will need to gracefully transition stakers, token holders, and users from the old networks onto the new one. The existing protocols have thousands of nodes and hundreds of millions of dollars in value, so you can imagine how important it is to get this right.

Q: What do you think the merge says about the development of the blockchain ecosystem overall? Do you think we’ll see more protocols merging in the near term?

To be honest, I am surprised this is the first merge! I expected DeFi protocols to merge before Keanu, but now that we’ve started the process, I can see why it’s the first. The complexities of two teams combining two protocols, communities, and tokens are huge. Mergers are a natural part of the traditional business world and, as pioneers like NuCypher and Keep blaze a trail, it will make it much easier for other crypto projects to follow suit. I see this as a natural maturation of the industry.

Q: Ben Longstaff and you put forward the rc0 T Token Proposal that was voted on by the Keep and NuCypher communities. What are the goals of your proposal? Can you describe the key points of your proposal?

The rc0 proposal built upon many community efforts and discussions. It attempted to take the best parts of the T1, T2, T3, T4, T5, and T6 proposals, and incorporate the token migration mechanism that has been analyzed by third party experts from an accounting and legal perspective.

RC0 Proposal Overview

The proposal had four key components:

  1. The NuCypher and Keep collaboration will be implemented as a network upgrade.
  2. “No token left behind.” Whether staking, LPing, or simply holding, all holders will have an equal opportunity to participate on the same terms without being punished for upgrading “late.”
  3. Inflation in NU and KEEP will be suspended by respective DAO votes and replaced by inflation in T.
  4. Post-upgrade governance decisions related to the Keanu DAO treasury and functioning of the Keanu network are not part of the proposal.

The networks have different numbers of nodes, marketcaps, token prices, liquid supplies, products, etc. Our proposal sought to cut through their differences and focus on giving all token holders proportional shares of the new network.

Lastly, we structured the merge as a network upgrade to make it totally opt-in and equally accessible to all. The upgrade process makes sense because it is very similar to how software is usually upgraded, like iPhone software upgrades. Anyone with that software is welcome to stay on the old version, but if you do decide to upgrade, you’re not getting a new iPhone. Network participants are welcome to remain on NuCypher or Keep, but if they would like to upgrade to Keanu, they are always welcome to do so with no penalty or obligations. If at any point they would like to downgrade to a previous version of the software, they are welcome to do that as well, by unwrapping their T tokens back into their original NU or KEEP tokens.

Q: Congratulations on the vote passing! What are the next steps for the merge?

Thank you! Both networks voted via Snapshots. NuCypher had 144 node operators vote, with 100% voting in favor of the merge. Keep had 26 node operators vote, where all but two voted in favor of the merge.

Proposal Vote Results

Now that the communities have approved the merge, the teams can begin implementing the new network and transition plan. There are still some factors to figure out, such as Keanu’s inflation schedule and DAO governance process, but at this point these are implementation details.

Q: How do current token holders begin to participate and actively support the new network?

There are a few things folks should be doing. First off, continue engaging in the governance process and Keanu designs! NuCypher and Keep token holder and community member perspectives are incredibly important.

Stakers on both networks should continue staking. As part of the transition, there will be a stake migration process by which node operators can join the Keanu network. Node operators are the lifeblood of these work token models and should feel secure that they will be treated as first class citizens in this merger.

Exchanges, custodians, and any other service providers should reach out to the Keep and/or NuCypher teams. Because both networks are decentralized and the upgrade is totally optional, both the NU and KEEP tokens will continue to exist in perpetuity. However, because the merge is structured as an upgrade with token wrapping, service providers can provide their users a great experience by performing the wrapping on their behalf without requiring the users to take their assets off-platform.


About Bison Trails


Pioneering Blockchain Infrastructure®

Bison Trails is a blockchain infrastructure platform-as-a-service (PaaS) company based in New York City. We built a platform for anyone who wants to participate in 25 new chains effortlessly.

We also make it easy for anyone building Web 3.0 applications to connect to blockchain data from 33 protocols with Query & Transact (QT). Our goal is for the entire blockchain ecosystem to flourish by providing robust infrastructure for the pioneers of tomorrow.

In January, 2021, we announced Bison Trails joined Coinbase to accelerate our mission to provide easy-to-use blockchain infrastructure, now as a standalone product line. The Bison Trails platform will continue to support our customers. With Coinbase’s backing, we will enhance our infrastructure platform and make it even easier to participate in decentralized networks and build applications that connect to blockchain data.


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THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY. PLEASE DO NOT CONSTRUE ANY SUCH INFORMATION OR OTHER MATERIAL CONTAINED IN THIS DOCUMENT AS LEGAL, TAX, INVESTMENT, FINANCIAL, OR OTHER ADVICE. THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN IS NOT A RECOMMENDATION OR ENDORSEMENT OF ANY DIGITAL ASSET, PROTOCOL, NETWORK OR PROJECT. HOWEVER, BISON TRAILS (INCLUDING ITS AFFILIATES AND/OR EMPLOYEES) MAY HAVE, OR MAY IN THE FUTURE HAVE, A SIGNIFICANT FINANCIAL INTEREST IN, AND MAY RECEIVE COMPENSATION FOR SERVICES RELATED TO, ONE OR MORE OF THE DIGITAL ASSETS, PROTOCOLS, NETWORKS, ENTITIES, PROJECTS AND/OR VENTURES DISCUSSED HEREIN.

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