Web3 is seen as the future of the internet because it allows people to manage their own data and digital assets, but crypto developers have learned from the past when it comes to onboarding new users.
The current state of crypto onboarding is impractical and unnecessarily extended due to the seed phrase, a string of words created by the crypto wallet to regain access. On a technical level, seed phrases contributed to the loss of nearly 20% of all bitcoins in circulation, roughly equivalent to Hungary’s GDP, according to Singapore-based crypto infrastructure startup Web3Auth, formerly known as Torus. The long passwords that users are asked to store in a safe place can be a significant barrier to entry for non-technical users who are used to simple “forgot password?” workflows on almost every traditional internet platform. There have also been security concerns when it comes to platforms that control a user’s private keys.
Web3Auth, a non-custodial key infrastructure solution for Web3 apps and wallets, aims to solve these problems by leveraging social accounts and devices that regular users already own, allowing users to intuitively manage their keys.
“Users use keys as accounts to trade, hold assets or just interact with blockchains, so control and security of those keys are important,” CEO and co-founder Zhen Yu Young told BestFitnessBands. “Non-custodial wallets help you manage your key, ranging from solutions as simple as writing a sentence on paper to more secure methods.”
Web3Auth is powered by the Torus Network, an open-source, non-custodial, distributed key management network. Web3Auth builds on this infrastructure to make Web3 authentication – including passwordless authentication, SMS authentication, or other OAuth methods such as Google, Twitter, Discord, and Reddit – in apps and wallets simple and intuitive.
Web3Auth announced today that it has closed a $13 million Series A led by Sequoia Capital India. This round included participation from Union Square Ventures, Multicoin Capital, FTX, Bitcoin.com, DARMA Capital, Chainstry, Hashed, KOSMOS Capital, Kyros Ventures, LD Capital, Minted Labs, P2P Capital, Phoenix VC, Staking Facilities, YBB Capital, Moonwhale Ventures and Decentral Lab.
The new capital brings the total amount raised to $15 million since its inception in 2019. It will accelerate expansion into decentralized gaming, NFTs and social applications and further its mission to eliminate seed phrases and make blockchain authentication decentralized and accessible. for anyone with Series A funding. The company also plans to increase its workforce, Young told BestFitnessBands.
Web3Auth’s authentication infrastructure is designed to make it easy for developers to build trusted login flows such as single sign-on with Google and Twitter, eliminating the need for users to directly interface with vulnerable public-private key pairs. It is also designed to allow more advanced users to connect the wallet or key management system.
“We designed Web3Auth to work around the UX hurdles that stand in the way of mainstream crypto adoption. True to our focus on accessibility, we wanted Web3Auth to meet users everywhere. Intuitive and trusted login flows are necessary if we are to integrate the next wave of mainstream users into crypto,” said Young. “We have been encouraged that some of the best investors in the world place great importance on usability and accessibility in crypto. their support and we are going to use it to catapult Web3 into the future.”
In 2021, more than 300 applications and wallets selected Web3Auth to secure the private keys of more than four million users. The number of users has increased 30-fold since the same time last year, Young noted.
“Our main users are Web3 wallets and applications. Many popular wallets in the ecosystems, such as Binance Extension, Kepler, Kukai, Skyweaver and Kash, are powered by Web3Auth in their core streams to increase conversion rates, reduce loss and get support tickets, Young told BestFitnessBands. “On the application side, the NFT and gaming applications that use Web3Auth that are particularly popular include Skyweaver, Rarible MyCryptoHeros, and others.”
Young pointed to similar platforms like Magic Link, which provides key management through another infrastructure like AWS Cloud HSM to store user keys, and Fireblock’s underlying infrastructure that uses multi-party computation (MPC)/threshold cryptography. However, they are more enterprise and internal-facing authentication compared to the Torus platform which is more external, Young said, adding that a similar analogy could be Okta and Auth0 in the web 2.0 authentication space.
“We think the non-custodial nature of Web3, which allows users to control their own data and destiny, is a huge step forward in returning power to users. This makes the data more portable and secure, while keeping the existing features of the login product enabled, giving users the best of both worlds. Sequoia Capital India is delighted to partner with a team and product that focuses on making crypto more accessible, not by adding more bells and whistles, but by addressing a long-standing problem at the most fundamental level Anandamoy Roychowdhary, Director of Sequoia India.