Codename KEANU: The first-ever decentralized, on-chain network hard merge between Keep and NuCypher

Research & Discussion
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We’d like to propose the first-ever decentralized, on-chain network hard merge of the Keep and NuCypher networks to form the KEANU network.

Background

Keep, like NuCypher, is a threshold cryptography network. The main application that currently runs on Keep is tBTC, a decentralized Bitcoin-backed erc20 token that enables Bitcoin holders to participate in Ethereum’s DeFi ecosystem.

Since asset bridges are a logical use case for threshold cryptography networks, developers within the NuCypher community have been exploring applications similar to tBTC.

tBTC v2

tBTC v1 is the most credible decentralized BTC on Ethereum in the market. However, its market share is currently limited by high collateral requirements and minting costs.

tBTC v2 is designed to address these limitations and, with NuCypher’s help, may become the de facto wrapped BTC on Ethereum.

The security model of v2 requires a significantly higher number of signers than v1. A hard merge would allow Keep’s ~200 nodes and NuCypher’s ~2,000 nodes to provide an extremely robust signer set for tBTC and an additional revenue stream for stakers.

Benefits

The long-term benefits of this potential hard merge could be immense and include a unified specification/architecture, multiple software clients, multiple core development teams, and combined communities/stakers/node operators providing threshold cryptography services. A hard merge could also accelerate the introduction of future threshold primitives beyond the proxy re-encryption, threshold signature, and random beacon services that are currently being provided on the networks, greatly expanding the scope and functionality of applications that can be built by the Web3 and DeFi community.

Proposal

We would like to solicit community feedback on the first-ever decentralized, on-chain network hard merge to potentially combine Keep and NuCypher into the KEANU network.

The first component in the KEANU network would be a staking contract that accepts both NU and KEEP, each with a DAO-specified relative staking weight. There would also be a mechanism for existing NU stakers to opt-in as well.

The staking weights would be algorithmically or manually managed to account for each existing network’s emissions schedule, giving each community a collective 50/50 stake in the KEANU network.

Over time, a unified protocol specification may be developed by the community that supports generic threshold cryptography operations, including proxy re-encryption. The NuCypher and Keep software clients could both conform to the shared specification, resulting in a more diverse and robust network.

As part of this proposal, there would NOT be any token swap or burn. NU and KEEP would both continue to exist as stake-able assets in KEANU and their respective networks.

The Keep and NuCypher core teams would NOT be merging as part of this proposal. Instead, they would remain independent entities, both with stakes in the KEANU network.

What does this mean for you?

Like all decentralized community efforts, NuCypher and KEEP stakeholders will determine whether this hard merge occurs, so please provide your thoughts and feedback!

KEANU is a codename but what’s the best name for the network in the long-run? We want something that both communities can rally behind, so share your ideas.

Lastly, if you are a NuCypher staker, node operator, service provider (wallet, exchange, or custodian), or token holder, there is no immediate action you need to take. For now, everything will continue operating as normal.

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as a multiple NuCypher nodes hoster, I would like to question why KEANU? if you propose the merge, and you provide the infra, Nu should be in front of the Ke, it should code #NUKE instead of KEANU, Let’s#NUKE the world!

Seriously, Nucypher is a layer1 like infrastructure, while Keep is just kind of a defi DAPP, which is built upon a layer 1(eth for now), definitely team should consider give more power inside the DAO for Nucypher stakers.

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besides, there is an another concern, if the network merged with the KEEP, so it means that nucypher is a KEEP only infra, then how you work with other defi apps? have you made up your mind to be a KEEP/tBTC only network?

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Hello, I’m the nu holder and node hoster. I don’t agree with the name “Keanu” very much because Nu is put behind. In addition, according to the market value and basis of Nu, it’s more appropriate for nu to account for 75% and keep for 25%.

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@Yin @yuayin233

Nu should be in front of the Ke
I don’t agree with the name “Keanu” very much because Nu is put behind.

A few thoughts: KEANU is a codename. It may or may not be the final name of the network. We want something both communities can rally behind.

I personally like KEANU because it’s fun and the memes are great. It also gives a node to the origin of the network.

I dislike NUKE for many of the same reasons. It has a somewhat negative/violent connotation.

Seriously, Nucypher is a layer1 like infrastructure, while Keep is just kind of a defi DAPP, which is built upon a layer 1(eth for now), definitely team should consider give more power inside the DAO for Nucypher stakers.

I’m not sure this is a precisely correct description of either network. The NuCypher network is infrastructure for threshold cryptography services. Keep can be described the same way.

tBTC is an application that currently runs on Keep infrastructure. Under this proposal it would run on the combined NuCypher and Keep infrastructure.

if the network merged with the KEEP, so it means that nucypher is a KEEP only infra, then how you work with other defi apps? have you made up your mind to be a KEEP/tBTC only network?

Nothing changes on this front. KEaNU would be infrastructure for tBTC and other applications built by the community that run on threshold cryptography (proxy re-encryption, threshold signatures, distributed key generation, random beacon, etc.).

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Based on the Ethernet network is the long-term solution. Merging with keep will limit development.

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Hi @NU_Satoshi - can you explain a bit? All networks (NU, KEEP, KEANU) run on top of Ethereum. That wouldn’t change with this proposal.

Why do you think development would be limited?

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What is the expected timeline of this project? Also is there any update with a amazon partnership. Any relation to unravel project? I love the ideas and futures of nucypher and want to continue following along

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Will NU non staking holders have their investment diluted in the short term?

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If the communities endorse the proposal, there is some integration work that would need to be done. But the bias would be to do this quickly so that tBTC v2 launch on Keanu is not delayed.

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The NU supply schedule would not be impacted by this proposal. Non-staked NU is currently being diluted by the existing NU emissions.

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So there is some possibility of these partnerships?

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First of all, I like the name KEaNU for the reasons stated above by @maclane.

Nevertheless, my concerns here are in what would combining Keep and Nu would bring to our community in the medium to long term.

In the short term, it’s going to provide extra staking rewards for us since tBTCv2 will be running on the network.

But in the long run, what are the directions that the Keep team is going to pursue to enhance the infrastructure. I believe that it will be awesome if both teams shared with us the long term vision for the new network’s direction(s) and how they will independently function.

I believe that the idea is good and having a popular product run on the Nu network is going to bring a lot of growth and I can’t wait to see the potential roadmap that you’re going to propose.

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I’m an investor in both Keep and NuCypher. I have high confidence in both teams and am a very proud investor. I fully support their decision-making in this matter.

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If the hard merge is validated by both communities, the combined community could collaborate to create a shared protocol specification for the Keanu network that supports arbitrary threshold cryptography (proxy re-encryption, threshold signatures, random beacon, distrubted key generation, etc.).

Both the NuCypher and Keep software clients could conform to this specification, with the result that Stakers can run either codebase on the network.

A unified protocol specification that supports many threshold services beyond what is currently provided on either network would expand the scope and functionality of applications that the community and developers can build on the network.

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Hi, hope I am allowed to comment on a price action here? I been encouraged by MacLane suggestion to Lin on Discord to comment on price development in DAO forum.

I think fundamentally KEANU is a value proposition for both projects. I don’t see any downside. But it is intriguing why the market since announcement rewarded Keep with app. 50% + premium in price change to Nu? It is possible that’s completely uncorrelated to the announcement and the premium being only a trading noise (Keep was technically cheap before and perhaps any good news is better than nothing and Nucypher had a bunch of positive news earlier), but maybe there is something more fundamental to it. Though I cannot point yet what is that. Of course it is still way to early to judge the proposal on the 5 days price action. And please, I absolutely agree that it is not for the NU team to comment that. I respect that.

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I think I speak for a lot of Nu token holders, what will happen if this hard merger is very successful? Will we use both KEEP and NU or be a new coin, or make our NU and KEEP into the new coin?

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You’re free to comment on price, but please understand if our ability to respond may be limited.

I’m far from an expert on why the market does what it does in the short-term, but I can speculate. Since the current proposal calls for a 50/50 economic split it’s not unreasonable that the prices would eventually converge. Unfortunately, that short-term convergence has seen NU go down while KEEP goes up. Such a rapid convergence perhaps suggests that people do think the hard merge proposal has long-term merit and that it will be accepted by both communities. Now that the two assets are closer to equilibrium, it will be interesting to observe how they move going forward.

The way the proposal is designed is such that if Keanu and tBTC v2 is a smashing success everyone will have an incentive to opt-in. If, for some reason, Keanu is not working, the design of the hard merge proposal is such that NU stakers/holders can simply opt back out and return to an exclusive focus on their own, independent network (the exact situation they are in now!) Since there is no token bridge/swap/burn this optionality is preserved in the downside case.

For NU stakers/holders, it may make sense to view this as an option on tBTC v2. If our communities can come together to make that application successful, there is a high likelihood that everyone comes out ahead.

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Both NU and KEEP would be first-class citizens in the new network and be stake-able to run a node.

The Keanu DAO may decide to emit a third token as a inflation incentive to stakers, but that’s not strictly required.

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Oh, yes your comment on 50% economic split is interesting. Could be, great thought! And yes, agree with an assumption it’s an option. And if this 50% spread equilibrium in favour of Keep has legs, then from now on, maybe NU holders have a free call option.