Proposal: Keep and NuCypher Hard Merge

I can’t speak for the NuCypher community as a whole but, in my opinion, the relevant metric is allocated network capitalization rather than fully diluted capitalization.

The extreme differences between KEEP and NU on a fully diluted basis is largely an artifact of each network’s initial design decision around inflation: KEEP is a fixed supply token whereas most of NU’s supply is emitted over time as inflation.

While the NU inflation pool is reserved for future stakers, it’s not yet allocated to anyone in particular. IMO, it’s more appropriate to consider the tokens that have been allocated (whether they are liquid/staked/locked/vested/etc.). On that basis, there is still a valuation difference between the networks but it feels much more tractable.


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.


I’ve been part of KEEP community for quite some time and also a mainnet tBTC v1 KEEP staker and looking to be part of tBTC v2 whenever it launches. I do have some NU bags (small bag). KEEP team is one of the honest/best in class in crypto and always pushing for full decentralization and thinking long term potential. TBTC is the only fully decentralized BTC on Ethereum today compared to others with custodial/semi/hybrid decentralized.
As the markets are taking a next step forward towards maturity, this will become more and more important -

I fully support this proposal and believe the hard-merge is a big win-win for both communities.
Definitely would like to hear more about the tokenomics of #CodenameKEANU !
Looking forward for the exciting journey together !


Waiting to hear on the tokenomics

1 Like

The plan in this KIP would be to adjust staking weight to account for both tokens’ emissions. I’ve got the math on my end but skipped it for the initial proposal — editing to add it back in the appendix.


I’ve also included some notes on differences between both networks in case anyone wants to read up a bit to help inform this discussion. Hoping @maclane and the NuCypher community can help flesh that out with further details and links.


I’ve participated in the Nu Stakedrop and been an active Keep community member also running nodes.

My main concerns are:

  1. Dilution/how to value the weight of each network in the merge.
  2. Proved use cases of Nu since Keep has showed to the world that a decentralized BTC is possible and is having real demand. What has Nu done? I get they have stakers and did a big stakedrop campaign through Coinlist but… Have they any working dapp with real demand? Do they have fees coming in from clients/customers? I think this metrics should be deeply considered.

Willing to have more feedback from Matt and Maclane :slight_smile:


I’ve invested in both Keep and NuCypher. IMO both teams are great and very technically skilled. I’m all for that. I hope this will have a positive impact on both projects as they are obviously very undervalued by the market. It would be great to hear more details about the implementation.


Also have Keep bags and waiting for my NUs from worklock. Would be very interesting to see where this proposal may take us. A little bit of spooning never hurt no one


I have a lot of respect for the engineering skills of both teams, the only reason I don’t currently run a NuCypher node is I wasn’t sure what the killer app to drive the adoption of proxy re-encryption was.

The collaboration of two teams with a deep knowledge of threshold cryptography and a history of shipping code sounds like a powerful combination to me.


What has Nu done?

Built a working proxy re-encryption network.

I researched the project in 2018 and found understanding the whitepaper hard enough :wink:

Have they any working dapp with real demand? Do they have fees coming in from clients/customers?

I think the important question is will TBTC v2 be stronger if the two teams collaborate on it.

Both teams have experiential knowledge from building, testing and shipping a threshold encryption network.

I would rather see the teams collaborate than compete.


I’m part of the KEEP community for over a year now - running nodes - and will support the merge with NU - once tokenomics have been provided and it’s even more clear what we are heading into - as I believe we can be stronger together and it will be incredibly interesting to see where this will lead to.

I have big respect for both teams and their fantastic communities.


This is a very interesting proposal. I’ve come to known the Keep team as a very open, focused and passionate team that are dedicated to their mission. I don’t know the Nu team as well as the Keep team, but at first glance they share the same believes. I also trust the Keep teams judgement in this.

In general I think teaming up can make each other and the product stronger. From a technical perspective it’s hard for me to judge what unique aspects both projects add to the merge, but teaming up development wise means a lot more can be done.

Another advantage I can imagine is potentially splitting incentives to bootstrap tBTC v2. Furthermore the amount of nodes Nu brings to the merge is offcourse also already a great bootstrap in its own.

If possible, I would be interested in estimates like what it would mean for time to market for v2. Or it would enable pulling in the introduction of L2 features this much. Give it these features as of launch etc. I understand these may be difficult to give at the moment.

Similar to others I would also be interested in seeing more on the Tokenomics.


Congratulations to both teams. As the community votes we will be making history in the blockchain space with this amazing onchain protocol merger.


While I only got to know about NuCypher until now, as a KEEP community member I fully support this proposal. Completely agree with Matt on the below:

Let’s be the first on-chain hard merge, let’s define collaboration in the space, the same way as we have been the first decentralised BTC on Ethereum.


I very enthusiastically support this proposal and look forward to seeing both teams and communities move forward with it.

(For context, I’ve been an investor in and advisor to Keep for several years, have been an active staker from day one of the September launch (got 99% of my ETH in there!) and read every post in Keep’s #general and several other Discord channels.)

The reasons I am so bullish on this collaboration boil down to:

  1. Fortune favors the bold, and both teams are proposing to their communities a strong move that makes a lot of sense conceptually - knowing there’s a ton to be worked out over time. Each could easily continue on their paths, do great work and be rewarded by it. A protocol merger is even more ambitious, and the broader market is likely to respond to that - it’s already taking notice.

  2. While trust-minimized Bitcoin on Ethereum is only the first app, it’s a huge - and hugely important - one, and our communities have a far better shot at growing the pie together. Credit to the centralized bridges for introducing the concept and getting such significant traction; now let’s show the world the right way to do it.

  3. We are pioneering a new paradigm, not just in the technology and business models, but in the way we approach open source buidling. A merger of startups would be very different; a protocol merger that combines the strengths of two teams and two communities should yield a lot more than simply the sum.

I fully agree with the positive comments about the Keep team, and chandru’s statement captures my experience perfectly: “The KEEP team is one of the [most] honest/best in class in crypto and always pushing for full decentralization and thinking long term potential.”

While I have only started to learn more about NuCypher and check out their Discord, etc., I trust the Keep team’s judgment here, and further am impressed with what I’ve seen, including videos of MacLane, Tux and others, as well as their contributions on today’s community call.

Any partnership, no matter how aligned in spirit and mission, will have challenges; as does every team. There’s a lot to figure out here, on many levels.

But each of us was drawn to Keep and/or NuCypher by some form of the promise we see in crypto generally and in these protocols/teams/communities specifically, and my experience (notice the grey beard) tells me this has the hallmarks of a winning combination.

I am excited and honored to contribute what I can to accelerating our combined efforts!


Let’s make the future together !!! Now it is time to merge and built not waste energy with fights and vanity


I’m in favor of this as it seems that both the Keep and NU team and communities are strong and combined they may become even stronger.

Re: stake weights, I am slightly concerned about doing it based on coin count. This would start out in Keep’s favor, but would gradually become more and more heavily skewed towards NU. Perhaps it would be better to have the relative weights of KEEP vs NU fixed at 50%?

StakingWeight_KEEP = 50%
StakingWeight_NU = 50%

A node’s weight on the combined network would then be
StakingWeight_KEEP * KEEP / KEEP_stakeable + StakingWeight_NU * NU / NU_stakeable.

This would then be straightforward to introduce new work tokens regardless of how many tokens that new asset has issued.

Additionally, I don’t see discussed here how emissions from stake drop are going to be distributed. Will KEEP be earned by all or just by KEEP stakers. Likewise for NU emissions. I don’t have strong opinions here, but would lean towards having both stakers of both assets earn both rewards. Either way I think it needs to be specified.

Additionally, it would be good to set expectations on the scope of the merger. Is the joint effort going to be on tBTC only or on the Keep / Nu networks broadly? Will both projects anticipate keeping their own independent proprietary networks operational, or is it anticipated that all future work will be on the joint network? I don’t know what makes the most sense here, but I think clear expectations should be outlined.

All in all, I love the idea of combining forces to create better products and consolidate talent and resources towards bigger ambitions. I’m very excited for the prospect.


This might be a bit too far ahead, still, just wondering, if the hard merge can come through, which I really hope it would, does it mean that we are able to bring the merged protocol to other L1s that we intend to build bridges to as well, or is it gonna be another community voting process as we are going through now, especially on Nucypher’s side since it’s not clear if they have the same intention as KEEP regarding expanding applications to other L1s?


I think that with the proposal and all discussions and positive feedback happening it’s clear that both networks need each other and will thrive far better together than on its own.

Aiming with v2 at maximal btc on eth numbers it’s a huge goal for all and personally I’m pretty hyped and amazed with this prospect. It gives much needed fees for node operators and economic long term sustainability on both sides of the merge.

Still not sure yet how rewards should be handled equally and just. Should they stay on either side of the merge or should get everyone both via a new token ? And how complement both rewards plans ?