TL;DR
1-minute explainer video:
How can it benefit Nouns DAO?: 90% of the revenue generated by the product goes straight to Nouns DAO. Estimated to be $3-5M a year. Basis of the estimate is explained in detail in the proposal below.
Main value proposition to users of this product: Increases users’ asset allocation to hot wallets, thus helping users access DeFi and the metaverse in an agile, secure and comfortable manner, reducing time costs and transaction costs involved regularly refilling hot wallet accounts. Not a single hot wallet product exists in B2C form that gives users access to fully flexible threshold signing schemes. Nouns Wallet will be the first to introduce this idea, and in a fully transparent manner.
Ask:
25 ETH round 1
25 ETH round 2
Detailed Proposal:
The B2C hot wallet market has been under the firm grip of MetaMask, riding high on its first-mover advantage. However, this dominance has left customers vulnerable to unfair policies and practices imposed by MetaMask. First, they sneaked away from open-source code to closed-source. And now, brace yourself, their updated privacy policies grant them the power to track user IP addresses and more! Sure, they claim not to keep this data for more than 7 days or sell it, but can we really verify that? Who will be held accountable for any shenanigans? What are the loopholes in this web of secrecy? Plus, let’s not forget, this opens up a single point of attack for snooping into customer data. The only way to escape this labyrinth is through complete transparency of code.
But wait, there’s another gaping hole in the B2C hot wallet industry! It’s the absence of fully flexible threshold signing schemes for users. Hot wallets are crucial for interacting with web3 applications and protocols. However, these hot wallets, like MetaMask, store the entire private key on the user’s machine. It’s like leaving the door wide open for attacks, as the key remains decrypted for the duration of wallet activity, in order to make digital signatures.
Now, some wallets try to beef up security and tackle this single point of attack issue by offering 2-factor authentication (2FA) or even 3-factor authentication (3FA). But guess what? These traditional forms of 2FA or 3FA rely on third-party applications that specialize in 2FA, like Authy, Duo Mobile, or Google Authenticator, and/or depend on third-party entities, such as 2FA from Google Cloud or email codes. This introduces the dreaded risk of a centralized point of failure! It forces users to always have access to these third parties and assumes they will function flawlessly. Some wallets even offer 2FA through their own mobile apps or via SMS codes, but alas, this makes users susceptible to SIM swap attacks. And let me tell you, SIM swap attacks have wreaked havoc on crypto holders in the past. Countless articles on the internet can attest to that.
As if that wasn’t enough, some wallets have attempted MultiSig, where one signature is required from the user’s key and another from the company’s key. But let me tell you, this setup is not only inefficient and inflexible, but also lacks ironclad security. Inflexible because any changes to the keys, adding or removing them, require rewriting the code. It’s like making it set in stone when it comes to signing policies (2 of 2 or 2 of 3 being the most common) and the keys generated and used. Moreover, MultiSig demands exorbitant transaction fees due to the need for higher block space or, in simpler terms, multiple signatures required to sign the transaction on the chain.
But behold! We have the ultimate solution to tackle all of the above conundrums: Fully Open-Sourced Threshold Signing! Sounds cool, right? It’s time to revolutionize the game and bring back the fun, security, and flexibility that users truly deserve!
1-minute explainer video:
Additionally, being fully open sourced makes us verifiably user-friendly in terms of privacy policies and security.
Estimated Revenue to the Nouns treasury from this project
Let’s dive into the exciting realm of revenue figures! If we cast our eyes upon this chart, MetaMask has been raking in around $200,000 per day in fees over the past few months. That’s a whopping $70 million per year, give or take! For more in-depth insights, you can check out the comprehensive dashboard and enlightening article on MetaMask’s daily and cumulative swap fee revenue.
Now, let’s shift our focus to Exodus, a prominent player in the hot wallet scene. In the last two Q3s, their quarterly revenues reached a commendable $18 million and $11 million, respectively. If you’re hungry for details, head over to this page and feast your eyes on the specifics.
But here’s the exciting part: We aim to compete head-on with MetaMask and other hot wallets by offering a threshold MPC system ingeniously integrated into browser extension and web app hot wallets. With all the potential this project holds, we conservatively estimate that it could eventually churn out a remarkable $3 million to $5 million per year in swap fees alone. And who knows, it might even soar to the astounding heights of $70 million, just like MetaMask!
When it comes to revenue distribution, we’ve got a plan. For the first three years, the revenue will be divided into a 90-10 split between the Nouns Treasury and the devoted development team. This approach ensures resources are allocated for continuous product enhancements and growth. However, after the three-year mark, the Nouns DAO holds the power to either renew this revenue split or gracefully take 100% of the revenue for themselves.
Funding Ask and Deliverables
Figma Prototype
25 ETH Round 1 – With a solid infusion of 25 ETH, we will kickstart the development of a basic yet functional Threshold Signing wallet. Within a swift timeline of just 2 months from the funding date, our talented team will focus their expertise on cryptography and backend wizardry. The frontend will have a simple, user-friendly interface adorned with a logo inspired by the captivating Nouns theme. To proudly showcase our collaboration, the wallet interface will prominently display “Powered by NounsDAO.” During this initial phase, we will demo the threshold signing capability exclusively on laptops. But fret not, as we have big plans for Round 2!
25 ETH Round 2 – Round 2, brace yourselves for greatness! With another 25 ETH in hand, we will elevate the UI/UX design aimed to maximize user experience and simplicity, ensuring that our wallet becomes an intuitive and seamless companion for crypto enthusiasts. As we fine-tune every detail, the wallet will be prepared for its grand launch. The timeline for this monumental event will be thoughtfully and collaboratively decided between our passionate team and the vibrant Nouns community.
Team
The team building this are specialists in advanced cryptography and are also currently building a trustless bridge between non EVM chains.
To find out more about the team go to:
insaanity.io
Feedback from the Nouns community taken into consideration
We express our heartfelt gratitude to the vibrant Nouns community on Discord and Discourse for their active participation and valuable feedback on our proposal. Your insights have been instrumental in shaping our approach, and we greatly appreciate your engagement.
In our previous communication, we had initially proposed a funding amount of 250 ETH for Round 2, with a significant portion of 200 ETH allocated towards code audits. This decision was primarily driven by our intention to utilize our proprietary threshold signing algorithm, which boasted certain advantages over the already audited threshold cryptography schemes available in the market. Notably, our algorithm showcased resilience against Denial of Service (DoS) attacks, providing an added layer of security.
However, we carefully considered the community’s concerns regarding the substantial expenditure of 200 ETH solely on code audits. We wholeheartedly understand and respect the need for responsible resource allocation. Therefore, we have revised our approach and made the decision to leverage already existing standard audited libraries as our foundation, building upon their established security foundations. This strategic shift has significantly reduced our funding request to a modest 25 ETH.
To address any lingering apprehensions regarding DoS attacks, we have further fine-tuned our strategy. Out of B2B and/or B2C options, we will adopt the B2C (Business-to-Consumer) model, where the distribution of key shares will be limited to one’s own devices and/or trusted family members’ devices, rather than across unknown communities’ devices. This approach ensures a more controlled and secure environment, where the threat of DoS attacks can be safely assumed to be absent.
We remain committed to our goal of delivering an exceptional threshold signing wallet, fortified by security best practices and community-driven input. Your feedback has been invaluable in shaping our path forward, and we are excited to continue this journey together, building a product that exceeds expectations.
Once again, we extend our sincere appreciation to the Nouns community for your unwavering support and collaboration. Let’s embark on this exciting endeavor, shaping the future of hot wallets with utmost diligence and innovation!
