mirror of https://github.com/nucypher/nucypher.git
Update WorkLock architecture terminology
mswilkison
parent
b3a9e6bb7b
commit
62c767bc38
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@ -7,31 +7,37 @@ WorkLock
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Overview
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--------
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`WorkLock` is a novel, permissionless token distribution mechanism, developed at NuCypher, which requires participants
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to stake ETH and maintain NuCypher nodes in order to receive NU tokens.
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`WorkLock` is a novel, permissionless network node setup mechanism, developed at NuCypher, which requires participants
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to temporarily stake ETH and operate NuCypher network threshold cryptography nodes in order to be allocated NU, the native
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cryptocurrency of the NuCypher network that enables node operation.
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WorkLock offers specific advantages over ICO or airdrop as a distribution mechanism, chiefly: it selects for participants
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who are most likely to strengthen the network because they commit to staking and running nodes.
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The NuCypher team designed the WorkLock to onboard threshold cryptography nodes to the live NuCypher network using a process that selects participants
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who are most likely to strengthen the network by committing to staking and running nodes.
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The WorkLock begins with an open bidding or `contribution` period, during which anyone seeking to participate can send
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ETH to the WorkLock contract to be escrowed on-chain.
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At any time during the contribution period, WorkLock participants can cancel their bid to forgo NU and recoup their escrowed ETH immediately.
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Once the contribution period closes, the WorkLock contract does not accept more bids, but it will still accept
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cancellations during an additional time window. At the end of this cancellation period, the claiming window opens and
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stake-locked NU token allocations can be claimed by participants. Stake-locked NU will be distributed according to
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the following principles:
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The WorkLock begins with an escrow period, during which anyone seeking to operate a NuCypher network threshold cryptography node can send
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ETH to the WorkLock contract to be temporarily escrowed on-chain.
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At any time during the escrow period, WorkLock participants can cancel their participation to forgo NU and recoup their escrowed ETH immediately.
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Once the escrow period closes, the WorkLock contract does not accept more ETH, but it will still accept
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cancellations during an additional time window.
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At the end of this cancellation period, the allocation period opens and stake-locked NU are allocated to participants in non-transferable stakes designed for
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the limited purpose of running threshold cryptography nodes on the live NuCypher network.
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Stake-locked NU will be allocated at network launch according to the following principles:
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- All of the tokens held by WorkLock will be distributed.
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- All bids must be greater than or equal to the minimum allowed bid.
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- For each bid, the surplus above the minimum allowed bid is called the `bonus`; all bids are composed of a `base` bid (fixed minimum bid) and a `bonus` bid (variable amount).
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- Each bidder will receive at least the minimum amount of NU needed to stake.
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- Once all bidders have been assigned the minimum amount of NU, each bidder with a `bonus` will receive a portion of the remaining NU, distributed pro rata across all participants, taking into consideration only their bonus ETH amounts.
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- If the resulting NU distributed to a bidder is above the maximum allowed NU to stake, then such a bidder has their bid partially refunded until the corresponding amount of NU is within the allowed limits.
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- All of the NU held by WorkLock will be allocate to network nodes in non-transferable stakes designed to enable node operation.
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- All ETH escrows must be greater than or equal to the minimum allowed escrow.
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- For each escrow, the surplus above the minimum allowed escrow is called the `bonus`; all escrows are composed of a `base` escrow (fixed minimum) and a `bonus` escrow (variable amount).
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- Each participant will receive at least the minimum amount of staked NU needed to operation a network node.
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- Once all participants have been allocated the minimum amount of NU, each participant with a `bonus` will be allocated a portion of the remaining NU,
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allocated pro rata across all participants, taking into consideration only their bonus ETH amounts.
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- If the resulting NU allocated to a participant is above the maximum allowed NU needed to operate a network node, then such a participant has their escrow partially refunded until the corresponding amount of NU is within the allowed limits for node operation.
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Finally, if WorkLock participants use that stake-locked NU to run a node, the NU will eventually unlock and their escrowed ETH will be returned in full.
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Finally, if WorkLock participants use that stake-locked NU to run a node and provide threshold cryptography services on the live network for a minimum of six months,
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the NU will subsequently unlock and their temporarily escrowed ETH will be returned in full.
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(Participants that fail to successfully run a NuCypher network node for six months of the live network will not receive NU and their ETH will remain escrowed in the
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WorkLock contract.)
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Hypothetical Bidding Scenarios
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Hypothetical Escrow Scenarios
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------------------------------
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.. note::
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@ -41,31 +47,31 @@ Hypothetical Bidding Scenarios
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For each scenario, assume the following hypothetical WorkLock properties:
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#. WorkLock holds 280,000,000 NU tokens and the minimum bid is 15 ETH.
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#. WorkLock holds 280,000,000 NU and the minimum escrow is 15 ETH.
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#. The minimum amount of NU required to stake is 15,000 NU and the maximum stake size is 4,000,000 NU.
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#. The total number of bidders is 1000 bidders (including you) with a total of 50,000 ETH committed (including your bid).
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#. For our purposes, a `whale` bid is a bid that causes the calculated stake size to be larger than the maximum stake size (4,000,000 NU).
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#. The total number of participants is 1000 (including you) with a total of 50,000 ETH escrowed (including your escrow).
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#. For our purposes, a `whale` escrow is an escrow that causes the calculated stake size to be larger than the maximum stake size (4,000,000 NU).
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Scenario 1: Resulting stake size does not exceed maximum stake size (no whale bids)
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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Scenario 1: Resulting stake size does not exceed maximum stake size (no whale escrows)
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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**You submit a bid of 22 ETH i.e. 15 ETH minimum bid + 7 bonus ETH.**
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**You submit an escrow of 22 ETH i.e. 15 ETH minimum + 7 bonus ETH.**
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*How many NU tokens would you receive?*
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*How many NU would be allocated to your network node?*
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- Each of the 1000 bidders (including you) would receive at least the minimum NU to stake = 15,000 NU
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- Remaining NU in WorkLock after minimum distribution is
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- Each of the 1000 participants (including you) would be allocated at least the minimum NU to stake = 15,000 NU
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- Remaining NU in WorkLock after minimum allocation is
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.. math::
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280,000,000 NU - (15,000 NU \times 1000 \,bidders) = 265,000,000 NU
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280,000,000 NU - (15,000 NU \times 1000 \,participants) = 265,000,000 NU
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- Bonus ETH supply (i.e. total ETH not including minimum bids) is
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- Bonus ETH supply (i.e. total ETH not including minimum escrows) is
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.. math::
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50,000 ETH - (15 ETH \times 1000 \,bidders) = 35,000 ETH
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50,000 ETH - (15 ETH \times 1000 \,participants) = 35,000 ETH
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- Your bonus portion of the bonus ETH supply is
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@ -73,67 +79,67 @@ Scenario 1: Resulting stake size does not exceed maximum stake size (no whale bi
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\frac{7 ETH}{35,000 ETH} = 0.02\%
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- Your portion of the remaining NU is
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- Your allocation of the remaining NU is
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.. math::
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0.02\% \times 265,000,000 NU= 53,000 NU
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**Total NU tokens received = 15,000 NU + 53,000 NU = 68,000 NU**
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**Total NU received = 15,000 NU + 53,000 NU = 68,000 NU**
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Scenario 2: Resulting stake size exceeds maximum stake size (1 whale bid)
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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Scenario 2: Resulting stake size exceeds maximum stake size (1 whale escrow)
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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**You submit a bid of 715 ETH i.e. 15 ETH minimum bid + 700 bonus ETH.**
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**You submit an escrow of 715 ETH i.e. 15 ETH minimum + 700 bonus ETH.**
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*How many NU tokens would you receive?*
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*How many NU would be allocated to your network node?*
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- Each of the 1000 bidders (including you) would receive at least the minimum NU to stake = 15,000 NU
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- Remaining NU in WorkLock after minimum distribution is
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- Each of the 1000 participants (including you) would be allocated at least the minimum NU to stake = 15,000 NU
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- Remaining NU in WorkLock after minimum allocation is
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.. math::
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280,000,000 NU - (15,000 NU \times 1000 \,bidders) = 265,000,000 NU
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280,000,000 NU - (15,000 NU \times 1000 \,participants) = 265,000,000 NU
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- Bonus ETH supply (i.e. total ETH not including minimum bids) is
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- Bonus ETH supply (i.e. total ETH not including minimum escrows) is
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.. math::
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50,000 ETH - (15 ETH \times 1000 \,bidders) = 35,000 ETH
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50,000 ETH - (15 ETH \times 1000 \,participants) = 35,000 ETH
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- Your bonus portion of the bonus ETH supply is
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- Your bonus allocation of the bonus ETH supply is
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.. math::
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\frac{700 ETH}{35,000 ETH} = 2\%
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- Your portion of the remaining NU is
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- Your allocation of the remaining NU is
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.. math::
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2\% \times 265,000,000 NU= 5,300,000 NU
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However, the total amount of NU tokens to receive is 15,000 NU + 5,300,000 NU = 5,315,000 NU which is greater than
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the maximum stake amount (4,000,000 NU). Therefore, the amount of NU tokens distributed to you needs to be reduced,
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However, the total amount of NU to be allocated is 15,000 NU + 5,300,000 NU = 5,315,000 NU which is greater than
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the maximum stake amount (4,000,000 NU). Therefore, the amount of NU allocated to you needs to be reduced,
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and some of your bonus ETH refunded.
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- Typically the calculation for the NU received from the bonus portion is
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- Typically the calculation for the NU allocated from the bonus portion is
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.. math::
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\frac{\text{your bonus ETH}}{\text{bonus ETH supply}} \times \text{remaining NU tokens}
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\frac{\text{your bonus ETH}}{\text{bonus ETH supply}} \times \text{remaining NU bonus supply}
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- The additional complication here is that refunding bonus ETH reduces your bonus ETH **AND** the bonus ETH supply since the
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bonus ETH supply includes the bonus ETH portion of your bid.
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bonus ETH supply includes the bonus ETH portion of your escrow.
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- A more complicated equation arises for the bonus part of the calculation, where `x` is the refunded ETH:
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.. math::
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\text{stake size} = \frac{\text{(your bonus ETH - x)}}{\text{(bonus ETH supply - x)}} \times \text{remaining NU tokens}
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\text{stake size} = \frac{\text{(your bonus ETH - x)}}{\text{(bonus ETH supply - x)}} \times \text{remaining NU}
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- Since you will receive a 15,000 NU minimum, and the maximum stake size is 4,000,000 NU, the most you can receive from the remaining NU is
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- Since you will be allocated a 15,000 NU minimum, and the maximum stake size is 4,000,000 NU, the most you can be allocated from the remaining NU is
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.. math::
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@ -152,7 +158,7 @@ and some of your bonus ETH refunded.
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x &= \frac{700 ETH \times 265,000,000 NU - 35,000 ETH \times 3,985,000 NU}{265,000,000 NU - 3,985,000 NU} \\
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&\approx 176.33 ETH
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- Therefore, your final bonus bid is
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- Therefore, your final bonus escrow is
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.. math::
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@ -164,36 +170,36 @@ and some of your bonus ETH refunded.
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\frac{523.67}{(35,000 ETH - 176.33 ETH)} \approx 1.504\%
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- Your portion of the remaining NU is
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- Your allocation of the remaining NU is
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.. math::
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1.504\% \times 265,000,000 NU \approx 3,985,006.46 NU
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**Total NU tokens received ~ 15,000 NU + 3,985,006.46 NU (rounding) ~ 4,000,000 NU, and refunded ETH ~ 176.33 ETH**
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**Total NU allocated ~ 15,000 NU + 3,985,006.46 NU (rounding) ~ 4,000,000 NU, and refunded ETH ~ 176.33 ETH**
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Scenario 3: Resulting stake size exceeds maximum stake size (2 whale bids)
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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Scenario 3: Resulting stake size exceeds maximum stake size (2 whale escrows)
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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**Someone else submitted a bid of 715 ETH (15 ETH + 700 bonus ETH); we'll call them `whale_1`.**
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**Someone else submitted an escrow of 715 ETH (15 ETH + 700 bonus ETH); we'll call them `whale_1`.**
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**You submit a bid of 785 ETH i.e. 15 ETH minimum bid + 770 bonus ETH; you are `whale_2`.**
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**You submit an escrow of 785 ETH i.e. 15 ETH minimum + 770 bonus ETH; you are `whale_2`.**
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*How many NU tokens would you receive?*
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*How many NU would be allocated to your network node?*
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- Each of the 1000 bidders (including you) would receive at least the minimum NU to stake = 15,000 NU
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- Remaining NU in WorkLock after minimum distribution is
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- Each of the 1000 participants (including you) would receive at least the minimum NU to stake = 15,000 NU
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- Remaining NU in WorkLock after minimum allocation is
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.. math::
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280,000,000 NU - (15,000 NU \times 1000 \,bidders) = 265,000,000 NU
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280,000,000 NU - (15,000 NU \times 1000 \,participants) = 265,000,000 NU
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- Bonus ETH supply (i.e. total ETH not including minimum bids) is
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- Bonus ETH supply (i.e. total ETH not including minimum escrows) is
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.. math::
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50,000 ETH - (15 ETH \times 1000 \,bidders) = 35,000 ETH
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50,000 ETH - (15 ETH \times 1000 \,participants) = 35,000 ETH
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- Your portion of the bonus ETH supply is
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@ -201,27 +207,27 @@ Scenario 3: Resulting stake size exceeds maximum stake size (2 whale bids)
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\frac{770 ETH}{35,000 ETH} = 2.2\%
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- Your portion of the remaining NU is
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- Your allocation of the remaining NU is
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.. math::
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2.2\% \times 265,000,000 NU= 5,830,000 NU
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However, the total amount of NU tokens to receive is 15,000 NU + 5,830,000 NU = 5,845,000 NU which is greater than
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However, the total amount of NU to be allocated to receive is 15,000 NU + 5,830,000 NU = 5,845,000 NU which is greater than
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the maximum stake amount (4,000,000 NU).
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- From the previous scenario, the equation for the bonus part of the calculation is as follows, where `x` is the refunded ETH
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.. math::
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\text{stake size} = \frac{\text{(your bonus ETH - x)}}{\text{(bonus ETH supply - x)}} \times \text{remaining NU tokens}
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\text{stake size} = \frac{\text{(your bonus ETH - x)}}{\text{(bonus ETH supply - x)}} \times \text{remaining NU}
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- Additionally, there is more than one whale bid, which would also cause the bonus ETH supply to reduce as well
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- Additionally, there is more than one whale escrow, which would also cause the bonus ETH supply to reduce as well
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- Instead the following `whale resolution` algorithm is employed:
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#. Select the smallest whale bonus ETH bid; in this case 700 ETH from `whale_1` < 770 ETH from `whale_2`
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#. Equalize the bonus ETH whale bids for all other whales (in this case, just `whale_2` i.e. just you) to be the smallest whale bonus bid i.e. 700 ETH in this case
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#. Since your bonus ETH bid is > 700 ETH, you will be refunded
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#. Select the smallest whale bonus ETH escrow; in this case 700 ETH from `whale_1` < 770 ETH from `whale_2`
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#. Equalize the bonus ETH whale escrows for all other whales (in this case, just `whale_2` i.e. just you) to be the smallest whale bonus escrow i.e. 700 ETH in this case
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#. Since your bonus ETH escrow is > 700 ETH, you will be refunded
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.. math::
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@ -234,17 +240,17 @@ the maximum stake amount (4,000,000 NU).
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35,000 ETH - 70 ETH = 34,930 ETH
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#. We now need to calculate the bonus ETH refunds based on the updated bonus ETH supply, and the maximum stake size.
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#. Remember that everyone receives a 15,000 NU minimum, and the maximum stake size is 4,000,000 NU, so the most you can receive from the remaining NU is
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#. Remember that everyone is allocated a 15,000 NU minimum, and the maximum stake size is 4,000,000 NU, so the most that can be allocated to you from the remaining NU is
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.. math::
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4,000,000 NU - 15,000 NU = 3,985,000 NU
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#. Since we have multiple bidders, our equation is the following , where `n` is the number of whale bidders
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#. Since we have multiple participants, our equation is the following , where `n` is the number of whale escrows
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.. math::
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x = \frac{\text{(min whale bid} \times \text{token supply - eth_supply} \times \text{max stake)}}{\text{(token supply - n} \times \text{max stake)}}
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x = \frac{\text{(min whale escrow} \times \text{NU supply - eth_supply} \times \text{max stake)}}{\text{(NU supply - n} \times \text{max stake)}}
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#. Plugging in values
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@ -262,10 +268,10 @@ the maximum stake amount (4,000,000 NU).
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#. Based on the refunds
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- The bonus bids for the whales will now be equalized:
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- The bonus escrows for the whales will now be equalized:
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- `whale_1` bonus bid = 700 ETH - 180.15 ETH = 519.85 ETH
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- `whale_2` bonus bid = 770 ETH - 250.15 ETH = 519.85 ETH
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- `whale_1` bonus = 700 ETH - 180.15 ETH = 519.85 ETH
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- `whale_2` bonus = 770 ETH - 250.15 ETH = 519.85 ETH
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- The updated bonus ETH supply will be
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@ -279,20 +285,20 @@ the maximum stake amount (4,000,000 NU).
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\frac{519.85 ETH}{34,569.70 ETH} \approx 1.504\%
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#. And each whale's portion of the remaining NU is
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#. And each whale's allocation of the remaining NU is
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.. math::
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1.504\% \times 265,000,000 NU = 3,985,600 NU
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**Total NU tokens received ~ 15,000 NU + 3,985,600 NU (rounding) ~ 4,000,000 NU, and refunded ETH ~ 176.33 ETH**
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**Total NU allocated ~ 15,000 NU + 3,985,600 NU (rounding) ~ 4,000,000 NU, and refunded ETH ~ 176.33 ETH**
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.. note::
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In Scenarios 2 and 3, you will notice that the bonus ETH supply was reduced. This produces a very subtle situation -
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for previous non-whale bids (bids in the original bonus ETH supply that did not produce a stake larger than the
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maximum stake) their bids remained unchanged, but the bonus ETH supply was reduced. This means that some bids that
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for previous non-whale participants (escrows in the original bonus ETH supply that did not produce a stake larger than the
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maximum stake) their escrows remained unchanged, but the bonus ETH supply was reduced. This means that some participants that
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were not originally whales, may become whales once the bonus ETH supply is reduced since their proportion of the
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bonus pool increased. Therefore, the `whale resolution` algorithm described in Scenario 3 may be repeated for
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multiple rounds until there are no longer any whales. To keep the explanation simple, both Scenarios 2 and 3 ignore
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