NuCypher is a blockchain network that brings data privacy to decentralized applications (dApps) built on Ethereum and other public blockchains.
According to a statement on Monday, this round of financing was led by venture capital firm Polychain Capital, and more than 10 companies including Y Combinator, Bit Continent, Bitfury, Arrington XRP Capital, and Notation Capital.
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NuCypher said investors bought the company's local token NU, valued at $10.765 million, equivalent to 8% of the initial supply. The company added that investors also agreed to lock the tokens for two years, which means they will hold these tokens and operating network nodes for at least two years.
NuCypher co-founder and CEO MacLane Wilkison told The Block that the funds were raised through the sale of the SAFT (Future Token Simple Agreement) Series 2, bringing the company's total financing to date to $15.825 million, valuation It is $133 million.
NuCypher was launched in 2015 to help dApp developers store, share and manage private data on public blockchains. For example, if a developer is building a medical application based on Ethereum and wants to store the patient's medical records in a decentralized storage system, such as Protocol Labs' Star File System (IPFS), NuCypher can use encryption technology. Help maintain the privacy and confidentiality of these records through its network.
“It is not enough to encrypt records with the patient's key, as these records may need to be shared with doctors, hospitals or insurance companies. The NuCypher network provides the necessary functions to encrypt data and, under certain conditions, with valid receipts. People share, but protection is not compromised by anyone else, including the network itself," Wilkison explained.
He also said that while services such as AWS, Google Cloud and Microsoft Azure provide cloud-based key management technologies, these are "centralized" solutions that do not protect data from cloud providers. “At NuCypher, we clearly focus on encryption methods for data privacy and mathematically provable security.”
Public test network online
Wilkison said that NuCypher also launched a public test network for its network today. It will allow developers to build applications and run nodes without the NuCypher license.
He added that the new funding will help NuCypher stress test the network and support the remaining development. Wilkison said that although the network has not finalized the date of the main network release, it is estimated that it will be launched in the first quarter of 2020, adding that the main network has been "completely realized", but there are still some "remaining work" to be completed. Includes bug fixes, user experience (UX) enhancements, and stability improvements.
Why do I need local tokens?
When asked why NuCypher needed its local token NU, Wilkison told The Block that it was a "working token" designed to serve as an anti-witch attack mechanism and coordination network. “Without witch attack protection, anyone can launch an unlimited number of malicious nodes and cause serious damage to the network.”
However, NuCypher does not pay attention to the liquidity of the token, but leaves it to the "market's judgment," Wilkison said.
Now, NuCypher has prepared a 13-person team for the main network (mainly in terms of cryptography and engineering functions). Wilkison said that although the company is not actively looking for new members to join its team, if there are suitable candidates, the company will hire new engineers based on opportunities. In addition, the company did not have plans to raise more funds in the medium term.