1kx leads $5 million seed round for modular smart accounts developer Rhinestone

Rhinestone, a startup building out modular smart accounts infrastructure, raised $5 million in seed funding. 

Crypto-focused investment firm 1kx led the round, which saw additional support from CoinFund, Lattice, Heartcore, Circle Ventures, Alchemy Ventures, zkSync and Cyber, according to a press release. Angel investors from Biconomy, WalletConnect, WorldCoin, Lit Protocol and Pimlico also participated. 

The seed financing brings Rhinestone's total funding raised to $5.42 million, a company spokesperson told The Block. 

Rhinestone builds infrastructure for smart accounts, which are digital wallets governed by smart contracts rather than private keys. Smart accounts, in other words, are essentially programmable platforms that enable activities directly in a user's account unlike when using wallets like Metamask, Rainbow and Coinbase Wallet.

Modular smart accounts, in particular, are a growing part of the wider world of "account abstraction," which was introduced last year in Ethereum Improvement Proposal 4337. This new standard expanded the capabilities of wallets by introducing features like multi-party transaction signing, fee subsidies and security features like two-factor authentication.

Rhinestone provides tools for developers to augment smart account features via self-contained modules, with the ultimate goal of improving smart contract interoperability, security and other features. It is also building a platform that enables developers to distribute and monetize their modules, which can then be installed by end users and dapp developers. Rhinestone previously partnered with Biconomy on launching a Module Store. 

With the fresh financing, the startup intends to expand its team in addition to growing out its smart account infrastructure and expanding its developer incentive program. 

"In three to five years, we believe smart accounts will be the dominant interface for any autonomous onchain actor, whether a user, an AI agent or a terminal in a blockchain-integrated supply chain," Rhinestone co-founder Kurt Larsen told The Block. "Modules make smart accounts infinitely extensible and unlock new capabilities without compromising self-custody or security. The support from industry leaders like Circle, Alchemy, Safe and zkSync is a huge endorsement of our vision."

Ikx and Lattice also participated in Rhinestone's pre-seed round announced in December 2023. The round had further participation from Safe, Heartcore, EigenLayer's Chief Strategy Officer Calvin Lui, Axelar co-founder Georgios Vlachos and Lau Ventures's Waikit Lau.