protocols

NuCypher Staking Scenarios

NuCypher Mainnet launch is days away. Our guide to configuring a node’s NU token stake provides the key decisions and their implications and four staking scenarios to help you understand the benefits of each approach.

NuCypher Staking Scenarios

Oct 12 2020 By Bison Trails

With the NuCypher WorkLock complete, and Mainnet launch approaching on October 15th, participants in the network must now consider how they intend to configure their stake on their Ursula node. These choices influence how quickly ETH is unlocked, the liquidity of NU rewards, the reward rate received by the node, and more.

The following informational guide defines some options available to node operators and details a few scenarios to help participants understand how they might set up their stake in accordance with the rules determined by the network. This guide, and the scenarios outlined, are based on how the network is intended to function; there are always risks inherent to staking activity, including the risk of loss.


Key Considerations When Setting Up Your Locked NU Stake

Return of ETH (WorkLock Participants Only)

WorkLock ETH is released gradually and should be fully returned in six months or less, depending upon work performed by node. Work performed is measured by the NU rewards earned by the node.

The Lockup Period for NU

The minimum lockup period for non-WorkLock NU tokens is 30 days and 180 days for WorkLock NU tokens. Locked NU tokens should become available at the end of this fixed period, if Wind Down is ON. If Wind Down is OFF initially, it must be turned ON to unlock the NU tokens. Unlocking occurs N days (where N is the original lockup period selected) from the time it is turned on.

Wind Down: On or Off?

ON: Locked NU tokens are staked for a fixed lockup period. Reward rate decreases slightly every day as lockup period diminishes. Locked tokens become liquid at the end of lockup period and can be transferred or be used to initiate a new stake to continue earning rewards.

OFF: Locked NU tokens are staked at a constant reward rate for a fixed lockup period. Wind Down must be turned ON to begin gradually moving towards unlocking the tokens.

Restaking: On or Off?

OFF: Rewards earned by the node are immediately available for use (liquid) and do not compound.

ON: Rewards earned by the node are automatically staked to the node to generate additional work and rewards. Rewards earned are unlocked at the same time as the original locked tokens.

Reward Rate

The longer the lockup period, the higher the reward rate set by the network. The relationship between those periods and the reward multiple is linear.

  • 180 days = multiple of 0.5
  • 270 days = multiple of 0.75
  • 365 days = multiple of 1.0

Sub-stakes

A total stake can be divided into a maximum of 30 sub-stakes, each with a unique lockup period. Sub-stakes offer NuCypher participants flexibility. Setting a shorter lockup period for one sub-stake provides faster liquidity on those tokens while setting a longer lockup for another sub-stake optimizes it to receive a higher reward rate. All sub-stakes are subject to the same wind down and re-staking choices.


Staking Scenarios

NuCypher Staking Scenarios

Sub-stakes

NuCypher Sub-Stakes

Although these decisions are made directly with your stake, rather than your node configuration, Bison Trails is happy to discuss the above strategies with our customers.

And, if you are interested in running your Ursula node on the Bison Trails platform, contact our team today.


Bison Trails: Pioneering Blockchain Infrastructure®


Our mission is to provide superior infrastructure on multiple blockchains, to strengthen the entire ecosystem, and enable the pioneers of tomorrow.

Bison Trails is an Infrastructure-as-a-Service company, based in New York City, specifically focused on blockchain participation. We’ve built a platform for anyone who wants to participate in new chains effortlessly (e.g. by running Cosmos Validators, Tezos Bakers, and Libra Validators, etc.)—without having to invest time and resources into developing any of the engineering, protocol, dev ops, or security competencies in-house. Our goal is for the entire blockchain ecosystem to flourish by providing robust infrastructure for the pioneers of tomorrow.


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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.

THE RISK OF LOSS IN CRYPTOCURRENCY, INCLUDING STAKING, CAN BE SUBSTANTIAL AND NOTHING HEREIN IS INTENDED TO BE A GUARANTEE AGAINST THE POSSIBILITY OF LOSS. THIS DOCUMENT AND THE CONTENT CONTAINED HEREIN ARE BASED ON INFORMATION WHICH IS BELIEVED TO BE RELIABLE AND HAS BEEN OBTAINED FROM SOURCES BELIEVED TO BE RELIABLE BUT BISON TRAILS MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE FAIRNESS, ACCURACY, ADEQUACY, REASONABLENESS OR COMPLETENESS OF SUCH INFORMATION.

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