T3 Token Proposal

What will happen with existing networks of $KEEP and $NU. Is KEaNU / $T in addition to the existing networks and remain separate working tokens or will both $NU and $KEEP be fading out and no longer be a worker token (no developments) due to KEaNU (after winding down in second staging phase). This to me is not clear.


In this proposal KEEP and NU will remain to exist, but their staking weight would decrease and go to 0 in the KEaNU network in favor of T.

On the current existing networks KEEP and NU would remain the staking asset. We also don’t have all details what will happen to these after the merge, and if there would be any future developments, so from a valuation perspective hard to predict. In general I think this is not set in stone yet


Great job @nahuus123 @Estebank @evandro_saturnino @corollari for coming up with the proposal !!
I like the proposal.

Just a comment - Public sale of $T3 should be at a much lower price than the current market price. So not sure calculating the sale amount raised based on current price is an accurate metric.
Or is the price intended to be current price ?

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https://status.nucypher.network/ shows 536,447,758 staked tokens, coinbase shows the circulating supply as 641M NU.

Keeps market cap is $232M as not all tokens are circulating but the fully diluted market cap is $551M, however all these locked tokens have owners

I think a token raise could be difficult to do in a way that is fair to existing holders, raises a large amount of BTC and gets a lot of hype.

Projects that have been massively oversubscribed on coinlist tend to only sell a small amount of tokens. They get oversubscribed as the price is low and the lottery winners get to buy the tokens and flip them for 10x - 100x gains. I don’t think this contributes to the long term success of the project.

My view is that the strength of both teams is around building deep tech and shipping code and that doing the marketing for a raise in a relatively short timeframe would distract effort from shipping v2. Curious to hear what @maclane and @mhluongo think.

Ethereum doesn’t seem to have had an issue with fixed inflation

Allowing new investors to buy at a lower price to existing investors doesn’t seem fair to me unless the tokens had a long lockup period and an onchain requirement to have staked all of the tokens before being able to sell them.


I think it’s a fair point, and that’s also a debate we had. The reason and intention to keep a sale in was to generate additional funds & attention to help bootstrapping of tBTC and future projects, and with that increase existing holders value as well.

Also on the coverage pool side it would give a T token price decoupled treasury, that would scale with BTC price increases regardless of the T price.

So our reasoning was: it’s bringing something to the project to help it grow, similar to liquidity incentives, stakedrop and others.

But interested in other opinions as well.

I like the potential addition that you made to make it with a staking requirement & lock-up

Drop vs Exchange of T Tokens

I don’t think a Drop of T tokens to existing KEEP / NU holders is the best way. I think an exchange is a better way.

Why? Because KEEP for sure should eventually be worthless or almost as it could only be used in TBTC v1, which would eventually be an abandoned network.

By dropping, early/fast traders could offload their KEEP tokens right after the snapshot and get out before the prices crashes; so if you fast on your feet, you win, if you buy those tokens for whatever reason, you lose big time.

By exchanging you avoid that situation.


Reason we stayed away of a swap is two-fold, our thinking was

  • existing holders of KEEP and NU can be locked, so they can’t swap at this stage → swap process would need to remain open for a long time. A swap would have to also take into account a dynamic swap ratio to offset for future NU inflation because of this.
  • the requirement of existing networks Keep and Nu to remain to exist

Although a swap would lead to the simplest / easiest understandable model, we could not think of a way to match it with above 2 topics


The challenge with a swap is that it may create a capital gains tax obligation in some jurisdictions for token holders.

I agree that this is a concern. Having a staking contract to accrue staking weight over time (maybe a couple of months?) in the new network may prevent this. The KEEP and NU token prices should decrease more gradually as the amount of value left to be extracted from accruing stake weight decreases.

Killer proposal @Estebank et al. Thoughtful and comprehensive.

I’m trying to keep my feedback on these proposals light, and make sure there’s room for everyone to get their thoughts down. Responding to a couple points here.

Clever. We haven’t publicly discussed how rewards should be earned in the new network, but normalizing all rewards to the T token rather than splitting them between multiple tokens is a good move. This does imply that we need to make sure T/tBTC is a liquid pair and routes well, and/or leave the liquidation periodically up to governance.

The tBTC v2 design requires that governance be able to balance the staker vs coverage pool rewards periodically. I don’t think these numbers are too far off, but calling out that it’s part of the security model.

  • 10% for Treasury

I’m leery of returning funds to the treasury right at launch, though I think including the lever to do so is the right move. Our network is a middleman between stakers and users, and we want to be light on charging any “rents” until we have significant fees coming in.

There are pros and cons to a sale. Having WBTC in the treasury is a powerful tool to bootstrap v2, and it could be used to earn yield and otherwise participate in the market in the meantime. Bringing in new blood and growing the number of potential stakers are both worthwhile.

But a real caveat…

I agree with @benlongstaff here. A small DAO-led sale is fine by me, but neither dev team has the appetite to widely promote AFAIK. Modifications to this where less is sold, or it’s sold with a staking requirement + lockup, or it’s only sold to existing holders, or the DAO partners with a distribution group like Coinlist… all of those are interesting, but outside the team’s capacity to manage.

I still think it can happen, it would just need to be community run.

A small capped “optional” inflation certainly hasn’t been a problem for Uniswap (3% a year max, only on a DAO vote).

Some additional thoughts about value

With KEaNU we all are trying to accomplish something huge here. Running TBTCV2 and later Proxy Re Encryption, Random Beacon, Threshold Signature and other threshold cryptography services on a joint decentralized network of 2200 nodes is tremendous.

What both teams are capable of and how they execute is well proved.
This hard merged protocol would really mean the whole being much greater than the sum of the parts.
From all angles: development, community, services, projects and last but not least value. And it would mean huge value.

Every aspect of our proposal is thought of to preserve, and build up this value. But it’s a long run. And not meant to satisfy short term speculators.

So what price will have T initially is something very difficult to deduce from actual FDV or Market Caps.

With T we are creating a new token, without actually burning/swapping any of the founding tokens.
What this actually implies is that value is created and not diluted, and that everyone will have their NU+KEEP tokens and on top of that will receive T tokens.

@ramaruro’s post describes some of the concerns I have around proposals that replace/deprecate the existing tokens without a swap.

It risks creating a significant group of people who, out of ignorance, acquire NU or KEEP post-drop and end up losing big. I’m not sure if the best way to solve this is via an exchange, by allowing NU and KEEP to be staked in KEaNU in perpetuity, or some other mechanism.

This is true of everyone who holds NU or KEEP prior to/as of the drop, but not anyone that acquires the tokens afterwards during the rush to the exits. I think this risks creating a significant population of disillusioned/upset token holders, which would be distracting at the very least.


Thanks for this proposal @Estebank et al. Please find below some constructive questions.

1/ In the timeline you have suggested, when do you think we should have the snapshot/drop after submitting the final proposal on the 10t of May?

2/ As stated in the previous discussions, prices for each project token will certainly dump after the snapshot. It also seems that the current 3 proposals would do the same instead of swapping for tax reasons. Since there is a locking period for stakers if they unstake, does it not mean that stakers have a disadvantage here by not being able to sell immediately ? Maybe the rational is that stakers should not sell their tokens to stake both in KEEP/NU + T tokens to have more rewards in tBTCv2?

3/ Why allocate 5% of the T token to stakers instead of e.g. 40% in the first proposal?


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To point 3. This 5% is an additional reward for existing stakers.

In proposal #1 (the way I read it) it’s not 40% going to existing stakers. It’s 40% going to whomever stake in the new contract. The staking in this case is used as distribution method for the new token.

In the proposal it states

" How users can stake in the staking contract, on the KEEP side:
The following KEEP holders should be able to stake in the staking contract, with all KEEP having equal weight:
-KEEP stakers
-KEEP grantees, vested or not
-KEEP holders

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After reading the entire thread, I still don’t understand what will happen to the existing keep tokens, if I keep them in the liquidity pool KEEP Token Dashboard, what should I do? Will there be a 1: 1 exchange or is it better to stay away from the project now? I am a large holder, I support liquidity, I like the idea and project, but why is there no clear specifics of what to do for existing token holders?

Thank you for sharing your concerns @Black_Man

All existing token holders will be able to acquire the new T token based on their existing holding.

The exact mechanics are still being discussed across the three proposals and will be discussed on a community call on Friday April 30th at 12pm EST (dial in details will be shared on discord just before the call)

We want to make sure that the process is fair and doesn’t create a large tax obligation for existing holders.

I believe it’s more likely that existing holders will be able to claim the new tokens for a small amount (I am proposing $0.0001 per token to establish a cost basis for the new tokens).

A 1 to 1 exchange could be a taxable event in some jurisdictions.

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Thank you for your reading and questions.

In regards timeline it probably will be discussed in the community call friday since it involves careful planning with both teams.

Thanks for the answer, as I understand it, the old tokens will cease to exist? I also wanted to ask a question about listings, which exchanges have supported you? Does this mean that the new token will be traded on all exchanges on which it is currently traded keep and nu?

In all the existing proposals the old tokens will continue to exist but their utility will decrease over time.

If you order by 24hr volume you can see where both tokens are traded the most.

I believe the T token will have to go through the listing process on each exchange. It’s worth noting that some collaboration will need to happen with the exchanges that currently have both token listed to ensure that the exchanges customers will be able to receive the T token.

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I am intrigued why do you think utility of Nucypher will decrease?

I agree with the proposal and look forward to the new T Token. I regard my interest in the KEEP Project as a long term hold; this merger is a thoughtful next step. The token claim is also a great consideration for my jurisdiction,.

I am especially pleased with the LP’s and incentive rewards mentioned in the proposal. I was an original KEEP PFK participant and think this T Token allocation will be a huge help onboarding and maintaining node operators. The first incentive drop, PFK, was incredibly well organized and well followed. The Bootstrapping kickstart should also draw a keen interest among participants.