Stake Migration and Proxy Re-encryption Nodes

Arjun Hassard

The PRE Application is live on the Threshold Network!

Version 6.0 of the nucypher client codebase is now released. There have been significant changes since the last major version, including integration with Threshold Network staking and the migration of policies to Polygon.

Required steps for stakers to be eligible for rewards (rewards proposal discussed further below):

  1. Stake T on the Threshold dashboard AND/OR migrate an existing legacy NU or KEEP stake using the NuCypher dashboard or the Keep dashboard. Note that there is a bug on the Threshold dashboard that displays incorrect values for some migrated stakes – this is purely a UI error and is not reflected in the contracts so don't panic! It will be fixed shortly.
  2. Configure a PRE operator node as per the instructions here.
  3. Bond your stake to your PRE operator node by entering the operator node’s address here and executing the transaction from your staker address.
  4. Select a delegate address for governance/voting purposes (it can be your own staker address). We will release a governance dashboard shortly, but for now you will need to use Etherscan. You will need to input the stakingProvider address you're delegating from and the delegatee address to vote/participate in governance on your behalf (in most cases this will be the same address).
Screenshot of delegateVoting function for Stakers on Etherscan.

For now, you will need to use multiple dashboards to complete the full flow. Eventually, everything will be consolidated on the Threshold dashboard - thanks for your patience and understanding!

Proposed Interim Rewards

Later this month, these two (interim era) incentive schemes will be put to the token-holder DAO for approval: (1) One-off Migration and Stake Bonus and (2) Ongoing Stable Yield.

One-off Migration & Stake Bonus
To motivate further upgrading of KEEP/NU into T, and putting that T to use, all stakers who, before April 30th (a) begin staking (whether with native T or migrated NU/KEEP stakes), (b) properly configure their PRE operator node, (c) set a governance delegatee address, (d) continue to stake and operate a PRE node through the launch of Threshold’s full applications (including the tBTCv2 bridge) – will receive a special token bonus, equivalent to a 2.5% growth in their stake size.

Following the principles of the stable yield mechanism, the number of tokens issued will be calculated based on the average staking rate. For example, if the staking rate is 33%, then generating a 2.5% yield for all stakes requires the Council to distribute 82.5m T as the one-off bonus sum.

Note that all rewards, including the bonus, will accrue to your address on-chain but will not be accessible until the launch of full apps (estimated for July), at which point it can be withdrawn. To qualify for the bonus, your stake and operator node must remain active until then. If you stop your operator node or withdraw your stake, you forfeit the bonus. The future stake unbonding duration will be on a per-app basis and governable, but the universal minimum at launch will be around 2 or 3 months.

Ongoing Stable Yield
From May 1st onwards, rewards will be based on the duration you are staked and reliably operating a PRE node. The target annual yield will be 15%.  For example, a staker who starts staking on May 15th will see their stake grow by (15/365 * 15%  = 0.62%) in the 15 days up until May 30th. The nominal inflation rate and monthly issuance figure will again be dependent on the average staking rate.

Important: The two reward schemes described above are only at the proposal stage – they still need to be validated by DAO governance. To give stakers an opportunity to migrate and properly delegate their voting power, the target for commencing an on-chain vote for this proposal is April 15th-20th, so make sure you've migrated and delegated by then!