NuCypher enables public networks and dApps to access a data encryption and protection layer without having to rely on a central service provider. The “decentralized Key Management System” (KMS) allows users to securely store and manipulate private, encrypted data.
NU is an ERC-20 utility token of NuCypher and is used in the following functions:
- Network incentives: Network participants are incentivized to perform key management services and access delegation / revocation operations on the network.
- Staking: Stake NU tokens to run a NuCypher worker node and earn inflation rewards (NU) and policy fees (ETH). Note that staked NU tokens can be slashed if the corresponding worker misbehaves.
- Governance: Participation in the NuCypher DAO, powered by Aragon.
The protocol consists of the following major components:
- Staker nodes: NU tokens can be locked into the “Staking Escrow “ contract for a defined duration to generate two income streams: inflation rewards (NU) and policy fees (ETH). To ensure the network's integrity and service quality, staked NU can be slashed if the corresponding worker misbehaves.
- Worker nodes (Ursala): Worker nodes carry out threshold cryptography operations and are performing work on behalf of a Staker. Workers must remain online to provide uninterrupted services on-demand.
- Umbral proxy re-encryption (PRE): Proxy re-encryption (PRE) is a type of public-key encryption (PKE) that allows a proxy entity to transform or re-encrypt data from one public key to another, without having access to the underlying plaintext or private keys. This enables private data sharing across public blockchains and decentralized networks.
As at June 4th 2021, the maximum token supply of NU is 3,885,390,082 and the current circulating supply is 648,750,000 (~16.7% of max token supply).