Your Wallet is Not Wallet
Obi is Born
Last week at Cosmoverse, Obi successfully launched its pilot program. We were the exclusive technology provider for the Loop Wallet built on Juno, and over 400 cosmonauts created accounts and purchased event tickets using our seedless onboarding and wallet interface.
Links for those who want to try it out (note — app is in alpha):
The point of this article is not to take a victory lap, and wear ourselves out by patting ourselves on the back. Instead, I’d like to introduce some of the core concepts for why we began building Obi, and lay out what users can expect us to continue delivering as we head towards 2023.
Do You Want Security or Convenience?
“Not Your Keys, Not Your Crypto” — a common adage in Web3, was especially poignant this summer in the wake of centralized services like Voyager and Celsius filing bankruptcy and ultimately freezing deposits of their users.
And while self-custody is a surefire way for users to avoid the Celsius scenario — it’s at best a pain in the ass, and at worst a self-inflicted loss waiting to happen.
I’ve often described self-custody as a gradient wherein users find themselves between the extremes of security and convenience.
On the security side, a user keeps most of their wealth in cold storage. While this practice might keep funds safe from the malice of online predators, it creates barriers for the user themselves to quickly access their account for dip-buying, fast-selling NFT mints or even emergency governance.
On the other side of the gradient, a user might walk around with 6 or 7 figures on a cell-phone. And while it’s nice to quickly transact at the tap of a button, unintended transactions become just as easy. For reference, crypto scammers took home over $14b in stolen funds in 2021 according to Chainalysis.
I’ll admit that the extreme edges of the security/convenience spectrum in the graphic above are written partially in jest (though you’d be surprised at some of the anecdotes I’ve heard).
Regardless, every user falls somewhere between absurd security and absurd convenience with an inverse tradeoff of the two. At least this is the case with most of the current non-custodial onboarding solutions today.
With Obi, our mission is to make it so that users no longer experience this trade off. We can provide cold storage security with hot wallet convenience. How so?
Your Keys — Your Way
Our first focus was the Obi Multi-Key seedless onboarding feature. In short, a user sets up an account for themselves by choosing from a variety of keys that work in unison for signing transactions or account recovery. It’s important to note that Obi does not store user information for any of these keys.
During our pilot program with Loop Wallet, users onboarded with a 1 of 3 multi-key by default:
- Biometrics Key (FaceID or Fingerprint)
- Magic SMS (Phone Number Key)
- Social Recovery Key (Secondary Account)
Moving forward, we plan on introducing 5 or 6 more key choices
- Cloud Storage Key
- E-Mail Key
- Authenticator Application Key
- Location Key
- NFC Device Key
- Hardware Wallet Key
Although some of these key options are still hypothetical, we’re exploring every pathway to give users as much flexibility as possible when creating their account settings. Going in-depth on all of these options deserves its own article which we plan to publish soon.
Permission Accounts
Seedless onboarding and recovery is only the first step in creating the ultimate solution for security and convenience. With permission accounts, users can delegate permissions to secondary accounts that take actions on behalf of their main account.
With permission accounts, we’re able to unlock a world of potential for non-custodial accounts that otherwise did not exist. Some examples include:
Inheritance/Endowment
User sets a time threshold on their main account. If no transactions are signed from their main account within the threshold, a secondary account will gain access to funds.
Hot Wallets with Transaction Limits
User carries a hot wallet with limited access to funds from their main account, protecting against total loss in the event of a spoofing attack, malignant transaction request or other exploit.
Non-Custodial Financial Advisors
Financial service providers are able to manage portfolios and deploy DeFi strategies without risk of losing funds or mismanaging keys.
The technical aspects of permission accounts might also deserve its own article as we plan to implement this on EVM chains, and to a limited extent, with Bitcoin as well.
Roadmap Note
Although the first iteration of this technology was built on Juno, we plan to expand functionality to all Cosmos chains with a focus on Terra v2 first. Obi received emergency funding to develop on Terra v2, but we have decided to defer the final portion of this funding until a standalone version of Obi is available for the Terra/Luna community.
