Why the Gnosis Safe is different.

Smart contract vs. EOA wallets

If you’re familiar with decentralized wallets, you’ve probably noticed that they’re controlled entirely by a private key — the only thing that stands between you, the user, and full control of your wallet. This means that if your private key is lost or compromised, your funds are no longer secure.

The Gnosis Safe is here to change that. Rather than using what we call “externally owned accounts” (EOAs) on Ethereum — as most crypto wallets do — the Gnosis Safe operates entirely with smart contracts.

A smart contract is a computer code running on top of a blockchain (in this case, Ethereum) which contains a set of rules under which the parties to that smart contract agree to interact with each other. If and when the pre-defined rules are met, the agreement is automatically enforced.

In contrast to EOAs, smart contract based wallets can therefore implement access logic that specifies by whom, how, and under which conditions they can be used.

And this allows for exciting features, such as:

• Multi-factor authentication for transactions
  Most decentralized wallets only require one signature from a single key for executing transactions. With the Gnosis Safe, each transaction can be signed by the mobile app and a secondary device (via a browser extension for example). This means that no one else can gain access to your funds, even if they have one of your devices!
• Improved integration and interaction with dApps
  Wallets based on EOAs often require the user to confirm one single transaction multiple times. By bundling transactions, we plan to do away with repetitive transaction confirmation steps! We could also implement spending limits when using specific dApps, or remove the need for more than one signature, depending on your needs.
• Advanced recovery methods
  Other decentralized wallets rely solely on manual recovery phrase backups. The Safe’s smart contract logic allows us to implement any kind of recovery mechanism: recovery via a recovery phrase with the ability to replace or disable access to it (think Erase your device feature with Find My Iphone); social or time-lock recovery, or recovery via KYC providers. We’re still researching which recovery mechanism will be the best to implement in terms of security and usability.

Smart contracts have a small downside, though: They need to be created (“deployed”) on the blockchain, which costs ETH (“gas”). When creating your Gnosis Safe, a small wallet creation fee (around 0.005 ETH assuming a gas price of 10 GWei) is required to cover the transaction costs on the Ethereum blockchain.

But the seamless UX and enhanced security is worth it.

Whether you’re new to crypto or already an expert, the Gnosis Safe is easy to use for everyone. All user flows and screens are designed to only reveal the necessary technical details, and abstract complex concepts such as gas limit, gas price, or private keys that often unnecessarily hinder user experience.

While you can pay transaction fees with your wallet’s available ETH today, you will be able to cover transaction fees even in tokens in the future. It is our aim to provide everyone — regardless of their experience level — with a seamless and straight-forward user experience when managing digital assets.

Check it out for yourself: https://safe.gnosis.io/ and let us know what you think!

Here's how the Safe compares to other decentralized wallets