Threshold

Threshold is a network that provides a suite of cryptographic primitives for various decentralized applications (dApps). It is the result of a protocol merger between the Keep Network and NuCypher, which was finalized on January 1, 2022, with the launch of the T token. The T token serves dual purposes: it is a utility token for the Threshold Network and a governance token for the Threshold DAO. The T token is primarily used to stake a node, with node operators being compensated with fees from applications that rely on the Threshold network’s cryptographic primitives. Additionally, the T token is a governance token, and users can lock the token in coverage pools to receive potential compensation in exchange for underwriting collateral risk in the network.

Threshold operates by providing a suite of cryptographic building blocks for privacy, access controls, and cross-chain bridges. These include Proxy re-encryption (PRE), Threshold signatures (TSS), Distributed key generation (DKG), and Random beacon (RB). The T token is used to stake a node in the network, and node operators are compensated with fees from various applications that rely on the Threshold network’s cryptographic primitives. The T token also serves as a governance token, allowing users to participate in the decision-making process of the Threshold DAO.

Threshold provides a range of potential use cases, primarily through its suite of cryptographic primitives. These include privacy, access controls, and cross-chain bridges. One of the flagship applications of Threshold is tBTC, a tokenized Bitcoin that is completely permissionless, aiming to allow anyone to tokenize their Bitcoin and potentially use it in DeFi applications without sacrificing privacy or risking censorship. The T token is also used for staking nodes and participating in the governance of the Threshold DAO, serving as a component of the network's operation and governance.

Threshold is the product of a protocol merger between the Keep Network and NuCypher, which was first proposed by the community in February 2021. The final proposal, which defined the terms of the merger, was approved in June 2021 by both communities. The merger was finalized on January 1, 2022, with the launch of the T token. The initial supply of T was 10 billion, with 4.5 billion allocated to NU holders, 4.5 billion allocated to KEEP holders, and 1 billion allocated to Threshold DAO. The vending machine contracts, with static conversion ratios, aim to be available to NU and KEEP holders indefinitely, potentially allowing them to upgrade their tokens to T at their convenience.