Braavos has raised $10 million to launch a self-custodial wallet on StarkNet, an Ethereum scaling solution.
The seed round is led by Pantera Capital. Other backers include Brevan Howard Digital, Crypto.com, Road Capital, Matrixport and Starkware, according to a company release.
Braavos was co-founded at the start of this year by Motty Lavie, Abraham Makovetsky and Yoav Gaziel. The startup closed the all-equity fundraise at the beginning of the bear market, according to Lavie.
StarkNet is a Layer 2 scaling solution for the Ethereum network developed by Starkware. The technology leverages zero-knowledge roll-ups and has the security of the Ethereum network while also allowing for scale.
Starkware was founded in 2017 and raised $100 million in a Series D round earlier this year, which brought the company’s valuation to $8 million.
The technology available on StarkNet enables Braavos to create smart contract-based wallets, which Lavie believes significantly improves the user experience. “For us, we are very technical people and still the experience was intimidating,” Lavie said in an interview with The Block. “Crypto today, or at least let’s say decentralized self-custodial crypto, has put on the user’s shoulders a big burden in terms of taking care of their security.”
“It was a very, very bad user experience, frankly speaking,” he added. “It was a user experience that in under no circumstances today would pass in what we call the web2 world.”
The smart contract technology means that Braavos can bring familiar components of the web2 world to self-custodial wallets. Features like a daily withdrawal limit or enabling a time delay in withdrawing funds from the account can now be made possible with smart contract technology, Lavie explained.
Making the hardware wallet redundant?
Braavos could even make dedicated hardware wallet redundant through its new built-in hardware signer feature, Lavie claims.
The tool leverages existing mobile devices' Trusted Execution Environment capabilities and their biometric identification tools, like face and touch ID, to secure wallets — which means that users no longer need to rely only on a seed phrase.
“This is very powerful because we actually use a private key that no one knows,” Lavie said, noting that "it's not exposed to any human, not the user itself, and certainly not to an adversary. He explained,"this means that even if my phone gets hacked, the hacker does not have access to my seed phrase. These are just some of the things that smart contract-based wallets and account abstraction allow us to do.”
There is even no security issue if you lose your device because the key is saved inside the hardware security model, Lavie explained. For example, it's not known that anyone has been able to hack into the security enclave inside an iPhone. The challenge revolves more around regaining access to those funds without the device.
For now, users will be able to recover the account using their seed phrase, Lavie explained. However, there will be a four-day delay with any request, which means that if someone has stolen the seed phrase, the user will have time to move the funds or change the phrase.
Braavos is already live as an extension on web browsers, as well as on iOS and Android devices.
The team will be rolling out features, such as a “forgot my password” mechanism and multi-factor authentication, to make the experience of managing a self-custodial wallet more familiar to a web2 audience.
The funds from the raise will be put toward product development, and to accelerate hiring and marketing.
This story was updated to reflect the fact that Braavos is already live on web browsers, iOS and Android devices.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.