Polychain, Bitmain Back $10.7 Million SAFT for Encryption Startup NuCypher
NuCypher, an encryption startup, has raised $10.7 million in a simple agreement for future tokens (SAFT) led by Polychain Capital. Marking the occasion, the company launched its public testnet.
NuCypher’s particular product is based on proxy re-encryption, which allows files to be encrypted to lots of people and for administrators to grant and revoke access based on certain conditions. The company dates back to 2015, but it began looking at tokens as a way to decentralize its infrastructure in 2017.
CoinDesk covered NuCypher as one of the buzzy initial coin offerings (ICOs) of 2017, but the company ultimately opted not to pursue a public
token sale. Instead, it ran one SAFT for $4.4 million in 2017.
In an email to CoinDesk, NuCyhper co-founder and CEO MacLane Wilkison said the new SAFT comes as the company nears mainnet launch:
“The launch of our public testnet is the culmination of over two years of hard work to bring data privacy to dApps built on
Ethereum and other public blockchains. The network is now fully implemented and ready to enter its final stress testing phase.”
Other participants in the round include Bitmain, Bitfury, Y Combinator Continuity Fund, Compound VC, Notation Capital, DHVC, Hashed, Arrington XRP Capital and CoinFund.
This round of investors has agreed to lock their tokens for the purpose of staking nodes that will run the NuCypher software. The protocol decentralizes by allowing nodes to earn tokens by making encryption computations. The investors will lose their stakes, however, if they are found to be acting maliciously.
Participants in the newest SAFT purchased 8 percent of the initial token supply of 1 billion ERC-20 tokens, with 31 percent having been sold in the prior $4.4 million round. Node operators will be paid in a combination of new token emissions and network fees. Like many other networks, inflation will diminish over time as fees increase with usage.