Dominating giants—How Qredo is transforming the digital assets custody business
Digital assets custodians are major players within the cryptocurrency space, facilitating the easy onboarding of institutional investors from traditional finance into the fast-growing and ever-evolving decentralized finance markets while also providing secure custody of digital assets. Coinbase Custody, Gemini Custody, Curv, and Copper are some of the popular crypto-custody platforms.
Coinbase Custody — a fiduciary under NY State Banking Law — is an independently-capitalized business to Coinbase, Inc which operates one of the largest exchanges by trading volume, Coinbase. Gemini Custody, another popular custody platform is affiliated with the Gemini exchange while Curv which was recently acquired by Paypal, is one of the leading digital asset custodians that employ multi-party computation(MPC) technology.
It is without a doubt that digital asset custodians are the go-to options for exchanges and investors with large capital, making them the ideal target for hackers. It is imperative, therefore, to ensure the utmost security of assets in their custody at all times.
Qredo— as an infrastructure for the provision of decentralized custody services — has chosen to play in the market of the ‘big leagues’ of the blockchain space. Can it match up? What are its value propositions? Or is the team ‘reinventing the wheel’ just to profit from the rally in prices of cryptocurrencies?
Custody for safe-keeping and ease of access
The secure storage of assets is the number one priority of any custody platform while also ensuring the ease of access to assets amidst other features/services that the custodian may choose to make available.
The different custodians adopt various approaches in ensuring the utmost security of assets in their custody—from regular audits to the use of a combination of hot and cold wallets, segregated cold storage, data encryption, and complex cryptography. However, there is always the question of what happens if after all these measures there’s a security breach resulting in assets loss. Appropriate insurance, therefore, is a necessity to ensure the coverage of customer digital assets at all times.
Trading and Liquidity: Custody platforms often provide not just secure storage services for digital assets but also serve as the means of entering and exiting the digital assets markets for large capital investors and traders. Some digital assets custodians leverage this and use their associated exchanges to facilitate the exchanging of digital assets in their custody—creating a ready market for their exchanges while providing easy and deep liquidity for clients.
Coinbase Custody
Coinbase Custody offers segregated cold storage of digital assets. This ensures digital assets aren’t centralized in a particular cold wallet, eliminating the risk of complete assets loss in the eventuality of a security compromise. Coinbase Custody is insured, audited, and supports numerous assets for secure storage.
Gemini
Gemini Custody provides cold wallet storage for all the assets tradeable on its exchange. Gemini supports the trading of assets in their custody on the Gemini exchange directly from cold wallets. Gemini Custody is registered, insured, and regulatory compliant. Gemini Custody adopts a multi-layer security architecture that features multiple layers of biometric verification and multi-signature technology.
Curv
Curv is a cloud-based cryptocurrency wallet that employs multi-party computation in eliminating the need for private keys as is the case with platforms like Coinbase and Gemini. Curv supports numerous coins and users maintain control complete autonomy of their assets.
The Qredo advantage— What makes Qredo stand out among its counterparts?
Qredo provides decentralized custody services by relying heavily on its own blockchain, a first within the digital assets custody market. While this may seem like an unnecessary measure to some, it provides the means of decentralization, and governance while ensuring transaction privacy. The use of blockchain technology also eliminates the use of a centralized database as data can be stored immutably on the blockchain.
Security and Insurance
Qredo employs consensus-driven multiparty computation(CD-MPC) which enables transactions to be processed without the need for private keys, ensuring trustless computation and instant transfers of digital assets between counterparties on the Qredo blockchain. CD-MPC eliminates the possibility of a compromise of private keys as they do not exist on the network. Access to the Qredo platform is granted through a two-factor authentication mechanism using the signing app and a personal computer — adding an extra layer of security, in addition to the conventional email and password pair.
Qredo has been pen-tested by Zokyo and it has been audited by leading security outfits like Quantstamp, NCC Group, Trail of Bits, and Marsh McLennan with insurance by Lloyd’s and Sompo.
Qredo is a layer-two blockchain and transactions on the blockchain are recorded on its distributed ledger. Synthetic tokens are minted to a Qredo wallet address on the Qredo blockchain to represent a corresponding coin or token on layer one. Privacy is ensured through the use of account codes and assets IDs which keeps the transacting wallet addresses and transferred assets private.
Trading and liquidity
Qredo serves as a means of entering and exiting the digital assets market for large capital investors, therefore, there is a need for deep liquidity so large-capital investors can easily navigate the markets with little slippage or no slippage. This need birthed the Liquidity Hub which uses dark pools and facilitates cross-chain atomic swaps that are instant at economical fees, making it easy for large and small capital traders to exchange assets seamlessly.
Presently, Qredo supports Bitcoin, Ethereum, and many ERC20 tokens on its platform with support for more shortly. While most custody platforms charge fees for their services, Qredo is offering free custody to users—the first of its kind!
Decentralization — the goal
Presently, Qredo operates using decentralized infrastructure in the custody of Qredo Ltd. It is important to note that Qredo V1 is not yet decentralized but is actively working on doing so (Qredo V2). The V1 mainnet is deployed across six validator nodes in highly secure data centers across America, Europe, and Asia.
One of the hallmark features of decentralization is a decentralized governance model(DAO) which enables participants—usually token holders, to vote on development proposals. The Qredo token QRDO which is an ERC20 token is a utility token that serves as the means of incentivization, rewards, and governance of Qredo through the DAO. QRDO is already trading across numerous exchanges and can easily be tracked using Coingecko.
While many digital assets custody platforms try to outperform one another with services and features, Qredo has been built as an infrastructure to onboard all digital assets custody platforms into decentralized custody—creating a secure and wholesome ecosystem with deep liquidity, capital efficiency, and cross-chain interoperability for digital assets custodians.
