#2 – Halt NU Inflation Indefinitely & Remove Voting Endpoints from StakingEscrow

Proposal #2 – Halt NU Inflation Indefinitely & Remove Voting Endpoints from StakingEscrow

Link to NuCypher DAO Proposal #2
Note that the validation page for #2 can take a few minutes to load, before which you will only see past proposals.

In order to parametrize, deploy and activate the Vending Machine contract, which will allow NU & KEEP stakers to upgrade their respective tokens in exchange for T, we require both token conversion factors to be frozen. This is only possible if neither token supply is growing, and hence a critical step in the merger process is to halt NU inflation via a DAO-validated upgrade.

This proposal therefore would halt all NU token distribution immediately following the necessary two-week DAO validation window. With the validation process having commenced on Thursday December 16th just after 2300 UTC, this means a successful upgrade will be enacted and implemented on December 30th at ~23:00 UTC.

This means that the final commit+mint (calling the confirmActivity method) that NuCypher stakers can make is possible starting Thursday December 23rd 00:00, and the final mint of rewards (calling the mint method) is possible starting Thursday December 30th 00:00. After this final mint, there will be no more inflationary rewards for running a PRE node on the NuCypher network.

The Threshold Community will attempt to minimize the time period without inflation-based subsidization, but relaunching inflation depends on many factors and it is not possible to commit to a specific date. The current estimate is to re-launch the Proxy Re-Encryption service on the Threshold Network at the end of January or early February, which would enable stakers (either with liquid T or via the staking adaptor), to run Proxy Re-Encryption nodes and earn inflationary rewards denominated in T.

The Vending Machine contract is estimated to be deployed and activated on December 31st.

This proposed upgrade will also remove voting-related endpoints from the StakingEscrow contract, a requisite step for the merger and launch of the Threshold Network. NuERT (Emergency Response Team) can still enforce collective decisions – indeed, there will be multiple upgrades required following the completion of proposal #2. The first of these will see the StakingEscrow smart contract (NuCypher) updated such that it is compatible with the TokenStaking smart contract (Threshold) – amongst other things, this upgrade (see associated PR) will enable stakers with locked NU tokens to use this collateral in the Threshold network, via an adaptor. Note that validating Proposal #2 implies your approval of the required upgrades to complete the merger, all of which will be enacted directly by NuERT (i.e. without a DAO Validation). If there is an unexpected upgrade required (i.e. not part of the known merger process), the change may be first collectively ratified via a Snapshot vote.

Head over to the Aragon DAO UI as soon as you can to validate Proposal #2, as this is a very time-sensitive upgrade.

4 Likes