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 led by Polychain Capital.

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 of 2017, but the company ultimately opted not to pursue a public token sale.

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.

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.

In short, new users can put ETH into a smart contract and they will receive NuCypher tokens.

Their ETH will be burned unless they use the NuCypher tokens to stake a node for a certain amount of time.

This should discourage people from claiming NuCypher tokens unless they intend to be users.

Somewhere between 25o-400 million tokens will be designated for distribution through the WorkLock.