T Token Proposal - rc0

Rc0 T Proposal builds on the T6 Token Proposal by identifying the approach the communities can take to upgrade NuCypher and Keep to the (codename) Keanu network. We are looking for community feedback before submitting the proposal for snapshot votes in both DAOs. If the votes pass, both protocol teams will proceed with the implementation.

This proposal continues to be championed by Ben Longstaff and Viktor Bunin, but there are many folks that worked to make this proposal possible, including MacLane and Matt on the accounting and legal discussions.

We are proposing a modification and simplification of T6 Approach 2 from the previous proposal. The new proposed wrapping approach has been analyzed by third party experts from an accounting and legal perspective and we believe it is the best way to implement the hard merge upgrade.

We are considering this the final vote on Keanu. Anything not covered here, such as the exact inflation model, is considered an implementation detail and will be decided on by the community in future votes.


  • The NuCypher and Keep collaboration will be implemented as a network upgrade.
  • “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”.
  • Inflation in NU and KEEP will be suspended by respective DAO votes and replaced by inflation in T.
  • Post-upgrade governance decisions related to the Keanu DAO treasury and functioning of the Keanu network are not part of this proposal.

Upgrading from NU and KEEP to T

The initial supply of T is 10 billion:

  • 45% available to existing NU holders
  • 45% available to existing KEEP holders
  • 10% allocated to the Keanu DAO

To upgrade to T, token holders must wrap their existing NU and/or KEEP tokens in a smart contract. The rate (aka Token Factors) at which T is received for wrapping NU or KEEP depends on the total allocated supply of both tokens. This allows us to maintain an equal split between each network’s stakeholders. See below for an example.


Reminder - the data above is for illustrative purposes only of how the Token Factor would work. These are not real numbers. The end result is that both sides would get the same share of the network!

In order to fix the Token Factors, NuCypher and Keep communities will both vote via their respective DAOs to suspend ongoing inflation in the existing networks.

The upgrade wrapper contract will be perpetually accessible and enable NU and KEEP token holders to join the Keanu network without needing to buy or sell any assets. Existing NU and KEEP stakers will be able to stake in the Keanu network via adapters and earn T rewards until such time as their staked tokens become liquid and they can explicitly upgrade to T.

Wrapped T can be unwrapped back to the underlying NU or KEEP, but only from the same address (i.e. unwrapping is not fungible).

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.

Vote Mechanics

This upgrade mechanism is what will be voted on in the upcoming snapshot votes on both networks. Along with this proposal we are proposing a vote structure with three options for this final community snapshot:

  • rc0 T proposal
  • I prefer a different proposal
  • No option / back to the drawing board

Rc0 T proposal is the focused proposal in this vote because it includes the best aspects of the previous community proposals that surfaced after many rounds of community discussion. Furthermore, both teams were able to confirm dynamics of rc0 T with third party legal and tax consultation. Putting all proposals up in this final vote would require extensive third party vetting of each individual proposal which would require more resources and delay this process even further. However, we are proposing this vote structure because it does not leave other community proposals behind. It gives both communities the chance to signal that rc0 T is not the preferred proposal and that an alternate proposal is better.

To move quickly, we are designating the exact inflationary model as an implementation detail. The inflationary model outlined in T6 is still the current proposal, but we will continue to discuss it and alternative inflationary models as a community. The inflationary model will be finalized (along with Keanu DAO dynamics) in future votes.

Roadmap & Timeline

  • NuCypher and Keep communities vote on this proposal [snapshot links will be added soon] - June
  • Determine DAO governance and inflation for the upgraded network - June
  • Finish implementation - July
  • Launch the upgraded network - August
  • Launch tBTC v2 - September

Agree with the proposal, except for the total Token supply.

10 Billion will translate into a very low price per token, a couple of cents or sub cent.

Even though it doesn’t matter from a fundamental point of view, it is very bad for investors psychology. And there is reflexivity between pricing and fundamentals.

I suggest no more than 1 billion token supply.


I think that 10 billion is a really large amount, which is not justified by anything.
The final cost will really be very small, I assume, based on the current issue of Keep at 1 billion.


Thank you Ben, Viktor and both the teams for the proposal.
I’m onboard with the proposal and would support it.
One concern is around 10B supply. Its really high number imo as other have expressed. I would suggest to reduce that.

Thanks !


So basically with this proposal Keep and NU holders gets diluted by 55% as you assume keep holders will represent 45% of the value of the upcoming token.
Using that method just dilute actual holders by creating a unified project that you assume is since day 1, 65% more valuable that the actual token.
A 10B token minting is not a problem as long as you confirm that the actual token holders get 45% of the full diluted supply and not initial supply.
As if holders get 45% of an unknown initial supply, we get even more diluted based on the fully diluted cap.

So things remains very unclear at this point and not very fair for the actual token holders that are getting very largely diluted since this merger…

Looks like the only winner with this proposal is the DAO funds (VCs?) with its 10%

I really appreciate the “No token left behind.” principle.


The DAO is not controlled by VCs. It is controlled by the network itself, which means stakers and/or all token holders depending on how the final governance ends up.

You can’t allocate fully diluted supply at the outset, some kind of inflation is required to incentivize people to stake and run nodes. In general, if you stake you don’t get diluted.


Thank you Ben, Viktor, and all who have contributed, for your excellent work. I am in favor of this proposal and especially like the approach of not punishing those who upgrade late. I am following the Kyber upgrade, and they are implementing a similar grace period - (but it will eventually have a cut off).
I am also concerned with the others at the 10B token amount and the initial price impact. I would like to see the final token value as close to $1USD as possible IMO.


I echo the "thank you"s to Ben, Viktor, Estebank, Laurentius and arj for all the effort put into your proposals - and especially statelayer for kicking off with the first one.

It’s great to see the community collaboration in evolving these proposals based on feedback, and that’s an excellent signal regarding success with Keanu.

Is it possible to share any detail from the “third party experts from an accounting and legal perspective”? If not, that’s understandable, as I would imagine it would have been far more costly to get something a firm’s lawyers would allow to be published (especially given the new ground we are breaking here).

I too, would be interested in the rationale for 10 billion tokens (vs. say, 1 billion) - but note (in contrast to other comments) that a lower initial price can also have a positive psychological benefit. Has anyone seen an analysis of various token pricing approaches (public companies also have different approaches to stock splits)?

I’m supportive of this proposal, especially considering its flexibility, the “no holder/token left behind” aspect, as well as the incremental vote mechanics - which I think we’ve seen be successful to date.


Bingo. High level though, both teams wanted to make sure they weren’t invalidating past guidance they’d gotten, and that they weren’t accidentally saddling anyone with an undue tax burden. Feeling good on both points.

Skipping over the “unit bias” discussion and whether a smaller or larger unit price makes sense… I think it’s important that we make sure that whatever the new supply is, it isn’t

  1. the two current supplies added together
  2. half of the two added together
  3. a quarter of the two added together

I worry that setting up an “easy” way to calculate an assumed price of T from KEEP or NU could give the market the wrong idea that they are pegged or something. We want to break that connection early, so I’ve been pushing for any prime multiple, larger or smaller, that’s not 2.

300M, 750M, 3B, 5B, 7B, 9B, 10B → all are great options.

cc @ramaruro @memento7mori @chandru as you guys had a strong reaction.


To be clear for anyone else wondering, this isn’t true. KEEP holders are diluted by 50%, NU holders are diluted by 50%. Any additional tokens going to the DAO are controlled by those holders.

To illustrate, if KEEP holders got 10%, NU holders got 10%, and the DAO got 80%, both teams are still only diluted 50/50 at launch. The dangling 80% would only become dilution if it were granted to other parties by the DAO.

I suggest that new coins be sent to users by airdrop according to the proportion of positions held!

That makes sense a lot of sense to me. @ramaruro @memento7mori @chandru et al - thoughts?

Doesn’t work for exchange-held coins and hurts anyone who doesn’t know about a snapshot day, unfortunately.

1 Like

I have all my moments on the stock exchange.
And I only heard for the first time that I can’t participate in airdop.
And will there be instructions on this for all users?

One of the fundamentals of all the proposals was “no token holders left behind”. Right now nothing needs to be done on your part to prepare for the network upgrade.

There will be a wrapping mechanic to upgrade from KEEP into T on chain. This means you can easily transition from Keep to T or T back to Keep at anytime. For token held in CEX this should be done by them, so I suggest to stay tuned with them and for announcements in Keep Discord.

This question and more are discussed in the FAQ doc!

1 Like

What’s the ratio? FOR KEEP & NU Holders to upgrade to T ?

1:1000 ? 1 : 100 ? :blush:

This is determined by a token factor which takes into account the supply of Threshold (10B) and the allocated supply of both existing networks. The token factor can be officially set after both communities vote to stop inflation on existing networks.