NuCypher encrypts data and protects it from theft, loss, and unauthorized access. It works with any blockchain network, including Ethereum. The protocol, which they call a decentralized key management system, aims to give developers the power to store, share, manage, and control their own private data on public block chains. Developers receive this encryption by paying Nucypher nodes in ETH in exchange for their services. You can only spin-up nodes by staking NUTOKENS on the network as collateral.
NuCypher was founded in 2015 by MacLane Wilkisson and Michael Egorov to provide a data protection system that allows users to move their information and computation to the Cloud securely. Cloud providers would only store encrypted data, while users would keep the associated encryption keys, so they could decrypt the data if needed. PRE aims to minimize data leaks if the cloud service suffers a security breach.
At first, the team focused on building applications for industries that maintain large amounts sensitive data like finance and health care. Later, they were running lab environments with several big banks. As a part of the progress, NuCyphers has been accepted into Y Combinator’s Summer class of 2016. The accelerator later led an $800,000 seed round for a startup.
NuCypher looked into adapting their product to smart contracts, so dApps could store their data securely. Nucypher adopted an approach that features a decentralized infrastructure, which reduces its platform risk even further than before. The team sought funding for their new direction by way of a token sales. Despite the frothy ICO market of 2017, Nucypher decided not to run a public token sale and instead raised $4.4 million through an SAFT in December 2017.
After its first SAFT, they built various early models of their NuCypher platform. These included an internal federated test network (October 2018), a similar private version with node operators (November 2018), and a public version with external node operators. After a successful private beta testnet featuring real staking with external partners in October 2019, NuCypher released a public testnet. The release of its testnet coincided with Nucypher’s second SAFT raise. It netted the startup an additional $10.7 million (which was raised from the previous round).
Come and stake it! Road to production launch and NuCypher is currently in the process of launching their incentivized testnet event called “Come and Stake It”. They anticipate to launch their middleware layer on Ethereum sometime in the first half of next year. Users will be able to provide re-encryptions services for dApps by staking NuCypher tokens on the NuCipher platform. Users will be able to acquire Nu Network tokens (NU) by locking up their ETH in the WorkLock smart contract.
Users can recover their ETH deposit by staking their NU tokens and producing some amount of work. If they don’t, they’ll lose their escrowed ETH if they don’t Nucypher designed WorkLock to attract people who want to contribute to the network by staking their tokens. Other distribution methods like airdrop don’t address these aspects.