Itamar Lesuisse: Argent – The Self-Custody Crypto Bank (#327)

Transcript

this is epicenter episode 327 with guests Eitam on the streets hey there Sebastian here you know the podcaster lives in a relationship is too unbalanced you know us a lot better than we know you and we want to narrow that gap so please do me a favor and answer our audience survey it takes four minutes and it will help us to continue producing content that informs and inspires you you can find the survey at epicenter dot rocks slash survey and at the end I'll tell you how you can get a free keep key hardware wallet courtesy of shapeshift - thank you for your time so thanks in advance and on with the show hi welcome to epicenter my name is Celeste ink with Jo today our guest is

Demarest Reece eta is the CEO of argent it's an etherium smart contract wallet which has a number of great features and in my opinion it's one of the best wallets for d5 so as a smart contract while it has many of the features that you would expect in terms of security and wallet recovery but also it has native support for defy savings products like compound and die savings accounts also has boring through maker and supports and FTS I've been using argent for about six months the onboarding experience is absolutely terrific if you use something like revolute or n 26 the experience is much closer to that of a refined FinTech product than of most

crypto wallets one of the really cool things about argent is this concept of Guardians they can be people you trust but also devices that you own like other smartphones or hardware wallets and they can help you in a number of ways to do things like lock your wallet if your phone has been stolen or recover your wallet on a new device not long ago a friend of mine bought a new iPhone and sent me a recovery request through argent and within 24 hours had fully recovered his wallet without any seed or backup key or anything like that so that experience was really seamless the other great thing about argent is that they've implemented transactions which removes a lot of the barriers that people face

when entering the space so with argent you could download the wallet create your account by Ethier with your credit card and put that ether and compound to start gaining interest in probably less than 10 minutes you know compare that to the experience of first having to buy ether in order to pay for the gas to deploy the smart contract for most people who don't have the right technical background I think these barriers can make it very difficult perhaps even impossible to even enter the defy space and so having that seamlessly integrated into the app is a great benefit argent is still an invite-only mode but they were nice enough to set up a special URL for epicenter listeners that allows you to skip the line up and the link for that

is in the show notes it's kinda like Guyana I did this interview and it was a lot of fun Itamar was a great guest so we talked about argent we talked about the vision how the product works but also discussed the general state of the wallet space and talked about some bigger trends in defy so bit of housekeeping we're gonna be at ECC on the week of March 2nd the conference is on the 3rd 4th and 5th and the hackathon is happening over the weekend on the 6th 7th and 8th I know the etherium friends folks really well and they are working their butts off to put on the best community conference in Europe this year the speaker list is massive if you're the website ECC the i/o you can check out all the speakers and I happen to

know I don't know if that I can talk about this yet but Vitalik uterine and Joe Lubin have confirmed they will be speaking and on Wednesday the 4th epicenter is having a casual drinks Meetup feta Sonny and I will all be there and it will be our absolute pleasure to hang out with you and have a couple of drinks in Paris before we go to the interview I'd like to tell you about our sponsors for today's episode starting with Peppo we're the crypto community comes together with short video updates and tokens of appreciation and the crypto community is really coming together on Pepa this week I don't know if you've heard but there's a little event going on right now called East Denver and there have been tons of new people joining Peppo posting content

from the conference and conversations and some of the cool things that are happening at East Denver and I couldn't make it unfortunately but I felt that I was there because I was just following all the stuff that's happening a Denver so that's been really cool to follow and be a part of go to pepper calm epicenter to download the app you can follow me there I'm at sub 2.0 and I post there almost daily I post updates about what's going on at epicenter I let people know when we have guests scheduled for the podcast so that they can ask questions and help us prepare the interview and yeah it's just been a great experience I really like the community there and I hope to see you there as well thanks to Peppo for sponsoring at the center we are also brought to you by

status and I am so happy to tell you that status is finally out of beta and available in the Apple App Store and Google Play Store once you've installed it join the public channel hashtag epicenter come and say hi and we'll give you some s and T tokens so you can get started and do things like create your own ens domain now that they've released a mobile app they can get to work on building more infrastructure developer tooling and end-user products that align with their mission to enable sovereignty and creating open-source software as a public good let me give you a couple of examples there's Nimbus the East 2.0 client for resource restricted devices there's vac p2p the modular messaging protocol for private and secure

communication that status leverages there's embark which is a robust framework for creating DAP they have keycard a secure contactless open-source hardware while API for people to be able to store their private keys securely these are all projects that make up the robust and powerful ecosystem that is the status network go to status Network comm to learn about everything that they're building and of course you can go to status that I am to learn more about the status messaging app which you can download then the Apple App Store and Google Play Store and with that here's our interview with Itamar Lewis we're here today with EMI Luis Reese who is the founder of argent Arjun is a great smart contract wallet for etherium

and has a lot of built-in defy applications which is really nice but also includes some really neat and very useful social recovery features that we'll talk about in this podcast eat Emma and I met the first time I think it was was it a DAP con last year and we had a panel about user experience and I'm remembering that right that's correct yeah and so you know one of the things that's great about argent is that it's it's got a really great UX and the onboarding is really seamless and it really it's a really polished application so each time out thanks for joining us today thanks to us John thanks for decaf for having me so let's start with a bit of background

I believe this is not your first entrepreneurial endeavor tell us what you were doing before founding urgent yeah so this is my third startup I mean my background I've been I'm an engineer I have worked in companies on as project manager like I worked at Amazon worked at visa in payment had a few startups the last one was a very large mob the largest actually mobile brain training application in the world we had 60 million users and we were running a very large subscription business for speak how did you move into crypto what piqued your interest and when did all of this happen it's good question when was this so in 2016 we sold we sold peak to a very large book publisher so the for the

first time I had a bit of free time and available cash one of my employee team was telling me about this great great platform that was ethereum and actually that's the ether is the first crypto I boat I knew about blockchain Mars a technology my two friends who are my co-founders here at Arjun were talking a lot about blockchain but I never really got what it was when I put my first earth I transferred it from an exchange to my Hardware wallet that's when I really had this mama Nora so okay this I know and very well I know our visa payment works and no suddenly I can move money in a trust list way with no middleman so

that really was a moment for me but clearly something wasn't quite right because you've had the need to start Argent so what exactly was missing what exactly were you trying to build so initially we were fascinated by cerium because it was a platform on top of which we could build software so we still really that as a new you know between mainframe computer server suddenly you at this new new paradigm and we also knew that we love doing consumer products so two of the co-founder Jen and I came from the consumer world but then after a bit of thinking it was clear it was not ready for that because we felt the core

experience of interacting with it with etherium wasn't there we thing into in term of large number we thought could a billion people write down the seed phrase on a piece of paper it was clear the answer was no so we thought let's let's solve that that's the biggest issue and like I mentioned earlier argent has a really great onboarding experience where did you get the inspiration for what you wanted argent to become in terms of a user experience overall so if you look at argent mission it's quite simple we we want people to own control and benefit from these assets from their assets and their

identity so we started with some very clear constraint we wanted an experience that was super easy that would work for a billion people we wanted an experience that was non-custodial so people had to own it had to be in control and we wanted an experience that was as safe as the safest you know we wanted something where people that would replace their bank account it had to be safe and you needed that peace of mind so we then started from that experience so no the unburden of origin is not that difference of any work to Ark is not too different from joining I don't know what's up telegram or we started from this constraint we

looked at all the friction points we had to eliminate the obvious one is sit phrase we actually saw gas as a friction so we looked at getting rid of that and then in everything we do when you integrate when you interact with a defi protocol doing an ear seat when you approve is also a friction point so all of these steps we saw them as friction point we built first the UX we felt we should achieve then we looked at what technology would the law as to to achieve that and that's how we became a smart contract wallet that's interesting I think we talked about this during the panel too which was like what comes first is it the UX that comes first or is it the technology

that informs the UX because there's certain things simply aren't possible yet how do you sort of balance that so people see you sometimes UX has designed my user interface in front of me it's not it we now the we prototype we had in I don't December 2017 which had no design which was ugly which was I mean just one of my co-founder worked on it was already had that great UX it was already a super safe model with a great recovery with all the abstraction you needed and but so we started from that user experience we started from you know we wanted so recovery for us we do the

parallel with the mental model you know which is your bank you you lose your wallet you call someone that you trust and you tell them look I lost my wallets freeze my card send me a new one so we said we looked at how can we reproduce that same mental model in this completely new space and I think it can't be stressed enough so if you're not an argent absolutely try it out so the the onboarding experience is super slick it's a really polished product actually using it it's more like using a web 2 application like you know like n 26 or revolute banking app rather than a web 3 product so kudos to you guys for that it's really cool what I wonders how did you decide to actually make this a

mobile wallet was that because basically your expertise was in mobile mmm or was that a conscious decision it's a good question it's interesting to revisit how things happen I don't think we thought about it too much I mean first we saw this little bespoke USB keys used to store crypto this hardware wallets with outlook every piece of device that we own is being replaced there's no more camera you don't record things as a mic anymore you use your phone everything has been replaced with our phone and all come that now we would have some spoke out where that is not our phone so there was an element of look it makes sense it's in my pocket

it's actually quite secure device compared to a true laptop the second thing is if you just look at the entire world and I think the mission of crypto that should also be anyone with a phone in their pocket can access a global transparency open system a lot of many more billion people have a phone then have a desktop so the phone is the most efficacious platform and smart phone amongst that is taking bigger and bigger chair so the smart phone is the device that has that ubiquitous and global footprint and takes more and more of attention of people that's where we spend our time so it was just a no-brainer and you mentioned in 26 revolute think about these platforms

they are actually mobile only for retail users well mobile first at least so they all have like a website that you can interact with but yeah they're very much mobile fast I think really doesn't actually for retail users we have one for the business but it's really as extreme that some do not have moans OH in the UK doesn't it so I don't know about any 26 that just shut down from the UK so I couldn't test oh yeah yeah so I'm an an 26 user and I can assure you so they have a website version doesn't have other features of the app but they do have that okay nice so let's talk about the social recovery feature which is I think one of the really unique things about Argent so with

social recovery essentially the idea is that you as a user can rely on you know your your sort of network of people around you so your close friends and surroundings to recover your your wallet and do other things like lock your wallet if if you lost your phone or surpass say spending limits or things like this this is a pretty unique concept you know that even we don't see this in sort of banking apps anything because there's always a third party do you think that this is something that people generally feel comfortable with what has been the reception to this idea of social recovery in your spirits so first you'll notice that Arjun never

talks about this as social recovery but I think the term sticks more than delegated recovery or guardians we never saw it as it's all about my friends securing my wallet what we built was a framework that allow the mental model similar to your bank as I said it's really we looked what do I do when I lose my wallet in real life I called some kind of entity that I trust that entity I trust that entity and that entity knows me they can recognize me and I ask them to freeze my card and send me a new one and it's quite smooth that's really what we've created with delegated recovery at the end a guardian in origin can be any firm

address it can be a new a so wallet it can be a smart contract it can be a multi C can be really anything and then in the app we picked some some use case anyone could build a new guardian service so you have users that use argent guard which is really a custodian service that with the whole keys these keys do not have your funds these keys do not have access to your money to your assets it's a service you trust to trigger your recovery some other will use friends families or other human beings that have the origin up but you can also be your own Guardian which actually quite popular use case many people will just use another device it can be another phone it can be a hardware wallet can be meta mask can be

anything that has anything I'm a dress that's really how we saw it from start so friends family we see it is a use case but I think you will see that a lot of people wouldn't trust their partner or their friends for that I think it's also related to technical literacy so if you have very technical friends or partner you might trust them so we will of the model I use human beings as Guardians but in some other use case you you will depending on everyone's context they might prefer to be their own guardian or to actually trust a third party it's a quite common use case too because this third party whether it's our John or others cannot access your fans so you

you do have that peace of mind so what we through the process say um I lose my phone and I had set up three guardians so agent Guardian service my ledger and my friend so now I lose my phone what what do I have to do to recover my account so you get a new phone you install the app you put your username and then you will need you mention the use case with three Guardians you will need a majority so you will need two Guardians to approve their recovery so out of the tree so if it's argent guard you will interact with us you know with two-factor authentication and then the transaction will be fired with your hardware wallet you will do it yourself

so you will go on your website you will plug your wallet and you will sign this approval and if it's your friend you will literally talk to them call them whatever channel you want and you will tell them can you go in the origin app and approve my recovery cool and in the meantime say I I have lost my phone and can I also lock lock the account yes so if you believe someone could have access to it there really T is that it's extremely hard I won't say impossible but to you know if you had biometric encryption pin it's very unlikely someone will be able not only to unlock your phone then to unlock origin but if you want it indeed you could go to a guardian you don't need a majority you can go to a guardian ask them to put a

freeze on your account so if you have your wallet you would do it yourself and it puts a five days freeze to your account exactly like you would on revolute on 26 that free isn't would freeze a card for time period so this is an interesting scenario because I think there are many circumstances around which one could lose a device and perhaps even lose many devices right so let's just take the example of like you're traveling and you get your bag stolen and your bag has your laptop and your phone in it I me personally if that were to happen to me I think I'd maybe know two people that I actually know their phone numbers off the top of my head and those are not my

guardians on on our jet I mean of course that that's a that's a really extreme situation and I think that most people that find themselves would find themselves in that situation would be pretty handy captain their ability to communicate but are there any scenarios that you've seen users actually going through the recovery process where they found themselves in very extreme situations and where they were able to leverage the Guardian feature to either freezer accounts or recover their accounts and in this sort of time of emergency yeah I mean that happens more than you would think we start the main use case and of course we don't see all of them so it's a people who contact us or or sometime tweet about it is real getting the device destroyed you know so

we saw a lot of that they would trigger recovery 36 hours later they would access I have access to their wallet this morning where they actually someone I knew was he's traveling the world got his phone stolen it was quite a bit of crypto and you know it was really seamless for him to get back access I think it happens more often than we want it's really about peace of mind I hope you will never have to use your Guardians but it's always good to yeah the date it happens I think it's important to create that very frictionless experience but it's really about the stress level if we can maintain that if you have that peace of mind you know you will get back access your money and some people contact

support especially early days we were you know we didn't have like perfect flow everywhere and we tell people look we can see at smart contract level you have Guardians everything will be fine your phone is destroyed so no one has access to it let's go through it together and so we had to improve this experience really to create that peace of mind and people they would have access back to their to their funds the social recovery is one of the features that is enabled by using a smart contract as a wallet but there are others right so there's things like batching transactions using meta transactions and doing other you know more complex step interactions with it can you tell us a bit about that yes so

very early on when we started working we didn't know it would be called meta transaction but I think several teams in parallel were working on this idea and suddenly very early on we worked on it for us the main reason to work on it was really to gas abstraction so we had an issue with the idea that you would have to top up some little gas station within your phone so that you can submit transactions and that's really why we started to work with meta transaction then realize look let's let's just get rid of the notion of gas in the app and we'll pay for it we realize it's small enough and people shouldn't have to worry about his little fees in web 2 we you know we abstract the cost of our EWS servers or whatever other products we

use we thought let's let's do the same it started that way and then you know bit by bit you just get excited by everything you can do so you mentioned batch transaction we we were not using much of it until well we were using it internally so in a bit different way it's more we were orchestrating actions within the wallet so the the funniest case were someone closing CDP on Arjun we would automatically like exchange Ethan to die and may in MKR to uni swap to pay for their CDP fees and then we would cause a CD piece and all that would happen within one atomic transaction so that was really really fun but what you can do also with that is for example get rid of the FC Twente

of proof so we now have that starting to implement is where you do one action with Arjun like by you pull together ticket put money in compound and the two actions which are the years it when you approve and the actual transaction or opening of your of that account will happen within the same atomic transaction and that really for us that's a breakthrough in term of user experience because you can abstract so many steps yeah I totally agree and basically if you go to the wallet you can actually use g5 products natively out of the wallet and have it done in one click so okay can you talk about the kind of things you can actually do out of these out of the Argent wallet so when within our gen wallet today what you know the first few dubs we got

excited about integrated is what's first up you see an exchange so we thought we should have a decent Rossy exchange within origin we at that time really we felt khyber at a lot of it was before all these Dex's existed but khyber very early on and a very interesting model because it was so simple for users with that swap experience we didn't want like an order book with an argent so we integrated it khyber and again it's exactly the same than exchanging currency in revolute you type an amount you push a button don't that was the first integration we did then came things like compound we got very excited again because the the offering was so simple you put $100 in something and you will get interest back that's really I

can explain that to anyone so we thought okay we can integrate compound in a way that is so seamless it will take 5 seconds to join it will be as easy to easier than opening way easier than opening a savings account in the in the current financial world so compound is integrated natively the dsr so similar offering a savings account through the maker dsr we also added in a pass the ability to open CDP so make what will will migrate now to a new model which is a maker vault which is a more advanced use case but we were just super excited because we could orchestrate and simplify like seven transaction into one we thought we just have to do it because recall there's so many other gaps that you could integrate into your agenda I'm

sure that you're already planning to integrate new ones in versions to come but how do you decide which adapts to integrate within argent your are there any evaluation criteria there for making those decisions yeah so we've been you know debating discussing that for a long long long time there is on one end we want to simplify things for users to create very simple options but we also realized you know this defy world is so new I mean it's amazing that we just passed the 1 billion dollar bar and defy but it's so new no one knows what will happen next week next month next year so the current direction is to be more open to have much modify protocols and to

read EF as much transparency as possible making it clear that this is the protocol you interact with that there are risks and and you know do not take to too much of a hands-on approach there and saying okay you are not allowed to be in at the end it's your wallet it's your identity you should be able to interact with any protocol of course we might not prioritize something where we have a feeling that it's a bit dodgy and that's very hard what is that feeling it can be related to who is behind the project was there a noted behind etc it might just be that we put a big red flag on on this project with this vision of being more open that's also why we have implemented while it Connect

yes we can improve experience by making things native into the app but in any case through wallet connect or adoptions like that you will be able to interact in the future with any doubt it's really up to you and then it wouldn't necessarily be seen as an endorsement ask I would take the stands that currently is if it's integrated into an argent wallet and I don't think all users actually have the crypto expertise to say this is this is a good particle and on this one I'm not so sure about the smart contract security do you see any legal problems coming up with integrating access to other depths natively into your browser or into into

your wallet is that is that something that you guys think about so we think about that and that's why we we so far we decided to make an endorsement of this project in the sense we say look let's have only the dsr natively let's make let's just call it the urgent savings account let's not let's abstract all these things or make it automatic for your your friends to go there we say look for the first for the meet short to mid-term it's still a word we'll relatively I would say crypto Korea's users we still let's go step by step and so let's not on doors let's make it very clear that you're interacting with something that is not Arjun that is a third party and partly because we wouldn't want to have you

know this legal responsibility there so legally we are taking the right step our worries more is a V our users you know if you interact with the protocol and something goes very wrong they will contact us okay we see the video with one of the few companies with the customer support which sadly it's me we just hired someone so it's going better my life is improving now but you know we we have one way or the other responsibility visa V our users so we will will keep you know an eye on that and making sure we warn users if we feel something is a very advanced feature that they might not want to use even things like CDP you know will make our

team is fantastic but it's a complex product people have to realize people we live in that bubble and we think everyone understand everything you have to realize that many users entering this space here for example about amazing interest rate on died so they buy ease they lock it in a CDP so that they can have died and then they put that in compound and then they realize wait but I'm paying interest on the CDP but then again interesting compound what's the point so we have to explain them know you you have to trade you're easy to dial you shouldn't open a CDP and it's it's not straightforward at all so really being very transparent and explaining thing as clearly as possible is definitely within our responsibiiity the fact that you're using a theorem

smart contracts is interesting because it allows you to leverage a social recovery aspect and also integrate lots of defy apps on aetherium but the defy space is growing and it's quite likely that in the future defy will also include apps on cosmos and on polka dot and other blockchains and of course there's the big guy in the room which is Bitcoin what's your approach here do you how do you how do you see Arjun evolving in the future in this context and do you think that at some point you'll need to consider options to add other networks to argent so philosophically we think users in the

future will not care and will not know which blockchain they're interacting with so for us this should all be abstracted we are you know very bullish on ethereum that's where we see ton of developer activity and this developer ecosystem is what bring this richness and all these new protocols if there were some super valuable g5 product only available on the blockchain then we would definitely consider it we have ideas with plan we have solutions for all these things I think what we are purely a bit less excited is just listing all the blockchain one by one just to have their core token because as speculative assets it won't last forever

that you can have a hundred assets or thousand assets that might all increase tenfold in value Bitcoin is of course with different I mean in mind not forever or do this but it might still be a very interesting style you and especially what am more excited is maybe having the Bitcoin player role within within defy on ethereum so I think there there is something quite interesting we follow very closely for example TBT see where that is launching very soon and nothing we'll see some interesting stuff are on that but how would you deal with the technical limitations for instance of you know being able to implement social recovery of a Bitcoin wallet on aetherium smart contract wallet how

would you deal with that so that we wouldn't implement probably one on one the exact same experience but there are definitely things you can do our vision is around using aetherium as the main operating system of your wallet and we're we're very interested we use the theorem identity as a way to recover than your your Bitcoin wallet at a later stage where I would tempt still more excited about t BTC which first is very easy for us but also because that would a low Bitcoin to play a role within the defy ecosystem and I would like to see that project grow and that's where I want to sit in going core super interesting so let's switch gears a little bit we've talked about other

things that you're currently offering and planning to offer let's talk about your business model so your VC funded currently and you're paying for a lot of the expenses of your users so you pay for the deployment of the wallet for converting tokens registering an DNS address and so on so how do you envisage making money in the in the long run good question I think first people need to realize that the yeah I mean first we need a business model we need to make money at some point bateson because of us subsidizing gas I mean subsidizing gas is cheaper than the cost that revoluta and in munzo probably have her wrong many other elements that are in the current financial system which is so

so clunky so bloated that you have all these additional costs so this is not the main issue it's still way more expensive to buy laptops for our team than to pay for gas there's a lot more coming in to arjun and so we have a lot of ideas we will not implement monetization this year we think there's so much more growth to come into this space that we should first focus on that and removing all that friction so there is much more defy protocol that will come potentially all of them will come with an arjun and we think there are some straightforward ways that we could monetize in the future one inspiration we can take from you mentioned and 26 revolute is the idea of maybe of a premium subscription

so you can imagine premium features for over or above a certain volume Pro users would pay a small subscription every month to get access to extra stuff the key for us in business model is to be super transparent it's not go back into the issues of web 2 if there is a business model it should be transparent to the user is what you are paying for in you're paying for value but I think also defi beyond that we could imagine creating new defi products new defi protocols on top of adders and there is potentially a lot of a potential tor for making money we are looking at things that insurance also you could imagine new financial projects builds on top of the existing building blocks as long as you can add value to users I believe

that these business model to be to be built I'm totally with you on that but you currently have a weightless with around 1,500 people who are waiting on getting argent wallets so if it's not the cost of providing the service to them why aren't you letting them have one so is there another reason for kind of keeping people on the waitlist so I think today's a very valid questions at the very early days Arjun was not what it was today it was not as polished it was still clunky we did a lot of work on infrastructure to have to manage big fluctuation in gas price making sure every transaction goes through whatever happens to the network no we are getting

actually very close to being able to remove it but there are still some fundamental changes so right now if we just remove the weight is right now you would have to wait for a transaction to be mine in order to access the wallet because it's a smart contract so we are finalizing our testing on create - so that as a user you don't know the app ten seconds later you and the wallet you can send funds it's it's done to make it really seemed less so there's no more big technical hurdle we are finalizing that so we are very very close to removing the wait list yes so I want to talk about the general state of the wallet space a little bit and more broadly the state of sort of crypto apps in the mobile app ecosystem there there seems to be some kind of a

tension between the need and the desire for people to have an open ecosystem and on the other hand the app stores and specifically I think the Apple App Store which is that's a closed ecosystem with very tight restrictions on what kind of apps can make it into the App Store what's your position on that and do you think that you know in the future apps like argent should be you know open sourcing the code there's our application code in addition to the smart contractor that's already open sourced and how would one protect so their core business in that if that were the case well several points here it's running software on the closed platform

first you can open transparency as you say by open sourcing but you are still running on a closed platform and then also the impact of having that wall garden on us and what type of feature we can launch let's talk first maybe about the open sourcing it's been something we've been thinking about we open-source part of our work so we have open source of course the smart contract from day one that was a no-brainer some areas of our apps we have open source but some libraries that we think other team could benefit from but in indeed the entire app was not open source the issue is ended on iOS that even if we were to open source you couldn't guarantee that's what's running on your phone once it goes through the App Store you have no idea if you are downloading the same thing on Android

it's easier you could don't know the name piqué directly so it's a different situation our view from day one was that you shouldn't trust the client you shouldn't trust our back-end if you try if the smart contract open source tested audited etc if there's full transparency on the first smart contract you are secure because anything that happens on the client actually would be reflected so even if some dodgy client would send your fans to another address with any other wallet the you might see on the screen an address but in fact the funds go to another address the origin model is built so that even if that were too your friends are protected because you daily limit that is visible at smart contract level with a whitelist at smart contract level would kick in and protect

your phone so of course we have internal process to ensure strong security but in fact the smart contract is there as a last barrier and so we felt we are quite actually different were actually much more open transparent than Hardware wallet you have no way to check what's in your drawer well that you have no idea so on one end people talk about this world garden but the wall garden that our outdoor wallet because you can't really it's it's security verification it's very hard to pick into your other wallet and see what you have actually is much more opaque than what a smart contract while it would be so this ensures security transparency I think in term then of what can we do in the app store there are limitation we know the stories of I think it's gone based and

mentioned they might have to remove their that browser I think we knew what we were getting in we've worked with Apple for now seven years I believe there are rules and you need opportunity to play by these rules I think there is hope for the crypto ecosystem is the first time I think it started last year that Apple had crypto rules so and you know them not maybe not yet the best but at least they are crypto rules there they have acknowledged that crypto existence there to stay so I think things will improve and we'll be able to get more flexibility but of course buying game assets using eve is is probably not something you will see next year because in-app purchase is the

business of the App Store and virtual goods have to be paid to in a purchase I see some trends where it seems like Apple is going into the direction of allowing more crypto apps in the App Store like for instance Peppo or sponsor who's recently launched and you know uses a cryptocurrency as payment of course there's no dap browser there and you know what you can do with the cryptocurrency in the app is actually quite limited but then we're seeing apps like you know meta mask and like status is delayed and that it seems like there's some blockage there to get the app pushed into the App Store I hope that things will go in the way that they did certainly in 2014 I think it was when at some point Apple decided hey

we're like we're gonna let people have Bitcoin wallets in here because there's no threat to our business model but you know if dphi gets big enough that you know people using these apps are there's a blanking on the english word here but monk again yeah maybe you can help me opportunity gus right if there's an opportunity cost that they're losing out on then maybe that would be a little bit harder to get these apps to starting through I want to also get your thoughts on other wallets that have sort of similar recovery schemes to that of origin specifically like threshold signature based wallets do you see these as a strict alternative to smart contract wallets are they strictly on different planets or are there opportunities for these two technologies

to augment each other in a way yeah so I think they sit at different layer so we looked at Tresor signature this was a lot of interesting work done in the past two years this is the recovery of the key while the wallet thing about the the smart contract wallet almost has some kind of bank account I don't like the world but a noncustodial bank account and it gives you all these features this ability to block transfer to a daily limit to abstract gas etc etc social signature doesn't play a role on that layer it plays really a role on the pure recovery of your key or of your account when we looked at that we we had a wish list of what it had to achieve and we were just

not happy with it were missing some elements it was not custodial but it's not censorship resistance so for us that's not really noncustodial for us non-custodial means I cannot access your funds but I cannot prevent you from accessing your funds and most of the models are on Twitter signature we don't know the providers to prevent you from accessing the fund we were just not comfortable we fell let's start with the smart contract wallet we can always decide to add threshold signature on top of that maybe for recovery keys but still not being able to prevent you from accessing your funds which is why we launched the argent emergency kit if Arjun disappeared our back-end disappears we can relate transaction you can use your phone almost like a

hardware wallet you sign the transaction and then you use Mathematica or meta well at my crypto to send the transaction that was really really important for us which is why we it was part of our decision to go in that direction can you talk about that emergency kit I wasn't very I wasn't aware that one worry of early users which is really fair was if Arjun disappear our infrastructure we relate transaction you sign them with your phone and our back can take that signature and sends it through the block chain that's how we pay for gas that's what a meta transaction is I don't think the worry was Arjun disappearing we are well funded we will be there for many many years but it's more you know government comes and saying freeze our servers or something like that then you

cannot make a transfer so early days the answer to that was a bit conky yes you had to if you have a hardware wallet or metal mask as a guardian you can start a recovery by interacting with a smart contract so philosophically and technically the mother was non-custodial but this is really clunky I mean interacting with a smart contract I wouldn't know today in five minutes how to do it I would need some help some good documentation it would take some time so what we did is the emergency kit it's live on iOS and soon on Android you open the app you live your you say I want to send all my funds to me to that address and instead of tapping the butin button send you live your button push for 10 seconds and certainly you will have a window with the sign transaction

you copy/paste that you put it in any other wallet in the data field and you suddenly our trick you are relaying your own transaction a bit like you would do with other or let you sign with the other wallet but you send it with your laptop you could do the same and for us that was again to that same philosophy of being fully non-custodial and also putting us in ourselves in a situation when where we cannot harm you and that's the same with your question on on the closed ecosystem of Apple because the smart contracts are public everything on chain we cannot harm you and again here even if someone forces us to arm you to say no you cannot let that person access their funds we wouldn't be able to do it that's actually super neat I had no idea

that existed so it's like having like an inbuild parity signer but basically all the derivation parts and so are clear so I think that's the super cool thing to have let me move on a bed to the defy space do you do analytics on your users do you know what they do within your wallet and has this changed over the course of the last year or so because I mean so many things have changed in defy right so our main analytic is actually on chain activity that's actually the most exciting and an often we learn more on how while at some time from tweets from other people like recently there have been some streets on wallet activation but we also have an animus activity on you know our people stuck in onboarding or people tapping compound

and all that but things like is that they're actually operating money in dying compound or in DSR all of that is actually Unchained activity so it's just so transparent that it's either track and if understand what your question was therefore is defy a big part of the activity alright oh no basically just has it changed a lot because basically the defy space is so quick changing right I don't think we are illustrative enough of the market because what happened to us is we had a wallet where you could only I mean like any quality that we saw as useless you could only store send and receive you couldn't do anything with our job so obviously people would put some ease in there and that that's it because people don't choose yet crypto for payment the minute

we launch compound everything's changed everyone would I mean we would have that sell flow people would put $1.00 put it in compound remove it put it out of compound author wallet they would test the full flow oh it worked it was easy now I can put real money and then you have people putting hundreds of the law thousand hundred thousand of the law so it was released at the mid became that mix of this ship between is it cold or hot wallet is it like my wallet for $50 or my ledger for 100k I think got blurred and people would suddenly put large amount of money very large amount of money because it was so simple to have it in compound and earn interest and at the same time it's in your pocket at any time you can

you have that peace of mind you know the money is there what kind of bigger trends are you seeing in defy and are you seeing you know your users are using the reflection of those trends in the way people are using the app now there are many more protocols and we see more people getting very curious about this new I think is still an experimentation phase once we launch all these other protocols with an Arjun it will be quite interesting to see how user behave right now it's very limited and savings is really the main use case in terms of trends lending was a big trend and now you have more and more lending protocols that thing is there to stay I think the old area of synthetics

I was listening actually to your interview of the synthetics team which was very interesting I think it's again it's an experiment nothing will be very interesting to see how our users in origin that there may be now we have a bigger mix of less advanced user people are just a bit curious will be interesting to see how they have faced with maybe more complex products I'm a big fan of simple products I mean that's what the power of talkin said for example again is that you just anyone can understand it's like buying some kind of index of Robo trader so for me any projects that can really appeal to a wider part of the population I find it quite interesting but the

savings account is probably the easiest to sell I think this is one of the things we had talked about during our panel was at the time and I still do kind of I was arguing that there aren't very many non crypto users in the crypto space it's mostly people who are like either building on the technology or working on technology and so it's it's kind of like this bubble what's your user base like I suppose it's mostly crypto people but are you seeing non crypto people just utilizing the app in order to benefit from these great interest rates that they can gain from by leveraging crypto and defy now I think people if for a long time say usability of crypto or scalability of crypto is not good enough

that's why there's no mass adoption I think the hard truth is that that's not the reason I mean my mom can use Argent it's not more complex than n 26 I should say my dad I think my mom is even more technical but my parents can use it and but they have no reason to use it they have no reason to use it so savings interest rates are interesting but I think the on-ramp is still too clunky not just in terms of user experience but fees when you put money from your bank account two and twenty six or when you put money to Robin Hood you are not suddenly losing two three percent in fees moving money should be free so I think until and and if you make the mass my own RAM to die my afferent died and

your interest rate starts to be much much less interesting the mass Don don't add up that's probably the last bit that we need to solve that we need a frictionless on-ramp to stable kind that is free to users it cannot cost now that was for us really and almost an experiment at Star but that's why we launched in the u.s. on ram through two bank transfer with zero fees that's harder for us we subsidize the on-ramp but we felt that's really the only way that we can get more people to try it we haven't yet implemented the off ramp but once you have both ways with no fees then I think you can start talking to less crypto savvy people

so right now audiences still think about people with at ease maybe in an probably in an exchange some a lot of them but they've never gone beyond we dimittimus users we have all this type of user but also these people who going to me Thomas is one step further they still add more as a developer tool they want the simplicity of the centralized exchange but for more advanced use case like for example I mean defy savings etc we had still haven't cracked this sort of mass adoption question I mean for me I feel like the apps that are most interesting and I would like to see adopted are the sort of self sovereignty apps so things like status or saya where if essentially you leverage blockchain

to improve your privacy and these are things that people can actually use whereas defy you know it's this sort of financial use case some would argue and nice and what it believed that the sort of underlying value isn't really there but like I said we'll see how that develops I also have a question as to this so do you see the frictionless on and off ramp as the thing that will solve the mass adoption problem because we're crypto comes from ideologically is more than safe sovereign idea that Sebastian just talked about right so basically it wasn't about the couple of percentage points you can get more than on US dollar holdings or something and I would also argue economically that as

soon as there is a large influx of previously non crypto money this discrepancy in the money market percentage rates is going to go away by and large do you think it's going to be like a quick boon where basically a couple of million people more flow in and basically everything if I kind of goes away or do you think it's going to be a real paradigm shift I agree with a lot of what you just said actually first crypt mass adoption is not a binary thing it's not they won't be like pre mass adoption and post mass adoption they are like second energy wall each time you pass one of these wall of

friction you will get to the next one and will gradually grow so on ramp off ramp very slick will get more people in the final be couriers they'll put dollar they don't need to speculate anymore and certainly they can get high interest indeed there is not enough a traitor in the world because for company to work you need both sides you need people to want to do margin trading leverage and therefore they will borrow you don't have enough in the old world to create this grid this is interest rate one caveat on that however is if you start growing the type of assets I mean margin trading exists in the traditional stock market the difference is I don't get that money

no the broker gets that or whatever app you use for that here we need to see the value in having removed all the middle man's through compounds I interact directly with this trader but indeed the interest rate will crash if everyone needs died suddenly they might be changed on the DSR rate etc you're right it will lower but certainly you will get a new wave of people fundamentally I think a financial system that is open-source permissionless is mind-blowing so it for me it's there to stay that's one there are many exciting stuff happening now this is an amazingly exciting stuff the fact that the team of three developers can certainly build on your financial product and it might not

be compound and these are getting to a billion people they will get to some people and then other projects will get to more and more so I think this fundamental is something fascinating there in our mission you know we talk about assets and identity so I couldn't agree more that now this notion of finding use case where you have self sovereign identities Co of what we do interacting with the AppStore wallet connect is an element of that at the end you have that thing in your pocket that allows you to own your money on your identity and decide who can access what data I think this will take time because again we'll need to find use case we'll need to find specific apps that user wants to use will not get straightaway big web to read it allowing web tree

wallet or login straightaway I think it will first be Dobson bit by bit that might draw the user base and hopefully we can then move on for Twitter you know it might be that we start with gaming a good game attracting a hundred million users is possible and then from there you have Android million people with self sovereign identity and they want to use it on Twitch and Sony's twitch will feel pressure to use that and bit by bit it could expand so you know we need to start somewhere and we haven't even mentioned the fact that argent also has collectibles so you can also have collectibles within argent and this is I think where there's perhaps some interactions with the gaming space I want to ask you another thing too you mentioned earlier and sort

of people using Hardware Wallet and testing argent with like small amounts of money and progressively putting larger amounts of money in it I love argent as a product I use argent I use other mobile wallets as well but there's something about it that I feel very reluctant even though so if I know that it's secure and I know that there's a social recovery I feel reluctant to put all my crypto in there I'm still somewhat attached to my hardware wallet maybe it's just because I'm I've been in the space for a long time and that's just the way we did it back then but like are you seeing people's mental model shift and trusting their mobile wallet to hold like you know significant amounts of the crypto

holdings or are people still a little bit reluctant to moving their funds there so first we don't always know where they come from of course I mean in your case you have already made the investment not in terms of money but creating that set up with a hardware wallet you have set up your up sack in a way that you know you probably I hope if your seat in a very secure way so you made that investment so honestly I have no problem then with you using a hardware wallet it's just not something that the billion people can do in a secure way you have to realize that in most wallet I mean the biggest storage of seized phrases people camara roll that's where people store sit phrase if it's a phone wallet they take a screenshot

I mean adware wallet in some way because so clunky to see these 24 words they cannot take a screenshot and that's good news but then these hit phrases in their desk so how do I wallet where your seat phrase is just visible on your desk going up on a post-it is not secure and not because of the hardware because that's where the seat phrase is so first I think people getting their end up with a very unsecure you need to be very careful in suggesting to people to use out your wallet if they are not trained I would say or savvy enough to use it and not everyone should be we should create softwares and tools and make it very easy we see users as I say with more than $100,000 in Arjun there are people putting maybe $200,000 depends on

the week would be the highest part of the sweet spot we are not a tool for millions in the sense often when it's millions you need access policy belongs to a fund they need a base on the amount you would use a tool like multis if it's a million dollar done is to move you need order you need to see your if it's a smaller amount you need to to mid-level people I don't know it's a different set up we see people putting more money I think with time you know we would do what we can of course more dates starting we're a team now working on formal verification which part of the wallet small parts being formally made verified and more and more coverage will come and then doing additional audits by different teams and then more and more

funds will come in the wallet more trust will come with that so it's just it's a new model that people are not used but inherently I think for many many people it is a more secure option if you look at the full big picture of the hardware they use their ups etc it becomes a more secure option yeah maybe I need to review my OPSEC you mentioned a couple things there that kind of light balls well I can see on the back your seat phrase there on your I don't have it only on a post-it but for a lot of people entering the space maybe I think this is sort of thing that if you were around when you still had to like buy an air-gap laptop and put armory on it that

there's this kind of notion that like that's the only way to store your keys but maybe you like people that have come into the space later that didn't know that time in crypto are perhaps more comfortable it could be also a generational thing I don't know just to be clear I mean I love my adorable a type of hardware wallet we have them in the team we use them sometime as Guardians there are good device to store key and in that I don't need to write down the seat because I can lose it because I have either Guardian so it's a different use case for us they are great device for people that know how to use them basically the problem with hardware well it does also that you basically you have to trust that they are still back in five years right so basically I mean ideally

you won't need them but I mean even if you have the seed fry somewhere and basically your trouser kind of is not recognized by your computer anymore or something you still have to find out how you actually go from the seed phrase to the private key and I think that's something that you don't necessarily want to have to do I think we will hear many horror stories I mean hardware wallets will fail like any electronic we own don't they do not last 10 15 years none of the or phones or TVs everything it's little bits of plastic that will pop out of that we see how do our wallets every day being reset and we need to put back the seat and then people realize that ink also doesn't last and that that piece of paper that

they had with ink is not readable anymore or that it got wet or into or they will have no clue where it is crypto steel is where it's at exactly and so are things are some people to who it will fit the same way that some people might have an actual volt metal steel volt at home most people don't have that and we're putting cash under the pillow before banks were there and I hope we're not you know ending up in a space where people will put seed phrase under the mattress back in my day we kept our seed phrase under our mattresses a kidney I can use this anything for some time I urge it is kind of like a I see it as kind of like a crypto custody or self custody crypto bank and I wonder if you also see it

this way and and if you envisage a future where argent and other apps like argent start also developing their own defy products and services you know kind of like a bank does right because the business model here in defy I mean just genuinely in space business models I think are hard if you guys are able to capture a lot of the business models that sort of revolve around defy whether that's like issuing your own synthetic assets or offering staking services or something like that you can build an ecosystem within argent where it's kind of like your one-stop shop for all your defy needs is that there's the direction where you're seeing things or how do you see the future here all that makes sense

yes you could you know you have the users they are there in your app you could offer them access to a new protocol that you have built I think there are several things to think about here first if we end up in a world where every wallet is a wall garden with their own protocol we probably failed and I don't think that the you know I don't think we can be smart and creative enough to come with all the best protocol ideas in the world that's about how it is right I mean if it you can move funds from one wall to another but I can't like port my art and smart contract to another wallet right or in the future you will be able to interact with more and more I would say all protocols they don't need to be billed Biogen you can use the compound savings

that these are saving it doesn't need to be the Argent savings so if we create something where you can only track with my protocols on my arjun lair - it's very attractive I'm sure as a business but I think it's probably not what will bring the most value to users yes there might be a day where we say ok we need that feature we want to design it what's the best way to deliver that need I can partner in a permissionless world is different I can basically integrate compound ASA wietfeldt that's the best way to fulfill that need maybe one day we'll see Anita is not fulfilled well enough by existing protocol and we'll say let's build it internally I think being open enough access to a global ecosystem is really what were

excited about so could we build protocols yes would we end up in a world where that's the only thing you can do in the wallet definitely not last question intimate so what's the roadmap for arjun for the next couple of years let's start by one year a couple of years that's like okay what do you hope to achieve by end of 2020 three big things we want to deliver on it might be sooner than end of 20 but we want to deliver first on removing that waitlist so that's happening soon mortify we've been very clear that argent should be the place where you can access to all of defi so we are working right now on making this happen that's probably one

of our top priorities the third one and that's a bit more related to upon our identity we still want to do much more work on solving de pon boarding so you will see towards the second half of the year more projects are on really solving how people interact with dubs and especially on bottle wisdoms thank you so much for coming on I'm looking forward to what Arjun will happen so fast you know over the course of the next year thanks for having me was real some thank you for joining us on this week's episode we released new episodes every week you can find and subscribe to the show on iTunes Spotify YouTube SoundCloud or wherever you listen to podcasts and if you have a

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