Diogo Mónica and Nathan McCauley
Today we are excited to introduce Anchorage, the most advanced digital asset custodian for institutional investors. Each of the last two years has taught the world an important lesson about digital assets: the bull run of 2017 proved that crypto assets have tremendous potential value, and the backslide of 2018 showed us that the financial system surrounding these assets is far from maturity. The global financial system is complex, and depends upon infrastructure whose crypto analogs haven’t yet been built. The digital economy needs that infrastructure to thrive.
Until now, investors have been constrained by the limitations of “cold storage” custody, which is vulnerable to human error (or worse), and holds assets inaccessibly so they are slow to move and can’t be used to capture yield, which can lead to depreciation due to dilution over time. Enter Anchorage. Engineered first and foremost to solve digital asset security, Anchorage is also designed to extend all the benefits of asset accessibility, including capturing yield from staking and inflation, voting, auditing proof of existence, and fast transactions. In other words, Anchorage is a digital asset custodian able to deliver the services that institutional investors expect from a traditional custodian.
Anchorage has raised $17 million in a Series A round led by Andreessen Horowitz, with participation from Khosla Ventures, PayPal co-founder Max Levchin’s SciFi VC, and individual investors Mark McCombe of Blackrock, entrepreneur Elad Gil, and AngelList co-founder Naval Ravikant.
How we got here
Our partnership started eight years ago, when the two of us joined Square in the same month. Square hadn’t yet launched an encrypted card reader, and we were tasked with helping to build it. Today, the system we helped develop protects more than 80 billion dollars of payment volume annually.
In early 2015, we were invited to lead the security team at Docker, a fast-growing startup that was changing the infrastructure landscape. We were thrilled by the opportunity to work with the community to build a secure-by-default foundation into what has become a core piece of every IT stack, today used by banks, governments, and the world’s top three cloud providers.
Over time, several digital asset funds started reaching out for help with secure custody of their private keys. As we grew to understand the problem, we envisioned a solution based on the security principles we understood well: one that combines multi-person integrity with hardware-based systems, allowing us to build a platform that is more secure than cold storage, but has the benefits of keeping the assets accessible. A truly crypto-native solution.
Institutional demand and technological advancements have combined to make this the perfect time for a new approach to digital asset custody, drawing on the best of modern security engineering. Institutions are eager to invest in digital assets, but until now they’ve had to face a trade-off between security and asset productivity. Our custody model applies the world’s most advanced and proven digital security architecture to better support institutional investments, while enabling active on-chain participation that offline cold storage historically hasn’t allowed.
We believe that usable and trustworthy institutional custody will bring new growth to the blockchain space — both because of the increase in capital from large scale investment in digital assets, and because securely custodied assets will serve as the foundation upon which to develop a rich and mature financial ecosystem.
If you’d like to learn more about Anchorage, please get in touch.
Services are offered either through Anchorage Hold LLC, a Delaware limited liability company and registered Money Services Business, or Anchorage Trust Company, a South Dakota-chartered trust company. Anchorage Hold and Anchorage Trust Company are not registered with the SEC. Services are not yet offered to residents of New York. Anchorage Hold and Anchorage Trust Company do not engage in the offer or sale of securities or digital assets, and do not provide legal, tax, or investment advice. Anchorage Hold LLC and Anchorage Trust Company are wholly-owned subsidiaries of Anchor Labs Inc., a Delaware corporation headquartered in San Francisco, California.