Published Mar 8, 2022
By Dan Burke
Why I'm Joining Qredo
Dan Burke - Head of APAC, Qredo
Before getting into crypto, Dan was a professional trader, with deep experience across a range of asset classes, including equity, FX, and metals. At BitGo, he subsequently ran APAC institutional sales for their digital asset custody and trading services. Dan is based in Singapore.
Dan's LinkedIn profile
I have recently decided to join Qredo — a software development company with a novel approach to enterprise grade MPC crypto wallets, custody, and treasury management. This distributed MPC or ‘dMPC’ is the newest implementation of MPC (‘MPC 2.0’) that will unlock the endless opportunities in DeFi and Web3 for both institutional finance and Web2 enterprises.
If you could point to a single building block of the entire crypto ecosystem it is crypto wallets. Without a wallet you can not participate in crypto. Crypto wallets are required regardless if you are a single retail user or the largest enterprise in the space. Even if you do not have your own personal wallet, your favorite crypto app is utilizing crypto wallets to secure and move your assets. Wallets are the gateway to the crypto economy. Not many companies exist today designing, building, and advancing crypto wallet technology and the wallet market is misunderstood.
There are cold crypto wallets, hot crypto wallets, self custody, qualified custody, sub custody, and there are various technologies being deployed like multi sig and multi party computation (MPC). In addition, each blockchain may require special node infrastructure and signing methodologies that need to be maintained, usually by the software provider providing your crypto wallet. On top of this, regional regulatory bodies govern how and when certain enterprises can use each type of these crypto wallets.
In all current implementations of crypto custody and signing, you are relying on one vendor for key management, transaction signing, and governance and even if you hold your own keys you are still reliant on single vendors for transaction signing methodologies and enforcing your governance. This opens your firm to obvious security risks and rent seeking through these single vendors. Due to crypto being a bearer instrument it is my opinion even holding your own keys but outsourcing governance and transaction signing does not take security of your assets far enough, and can slow down deploying your own firms assets opportunistically. Other software providers in the space can simply elect not to help you sign your own transaction as its running through their signing process and governance layer (even if you hold your own keys!). In striving for the ultimate security over a distributed network firms have introduced centralized governance and signing over these distributed networks. Firms have not thought critically enough about this.
In crypto’s first wave of success we saw large successful proof of work chains capture the digital gold narrative. These assets are largely okay to keep in cold crypto wallets and can even be abstracted away from the chain and traded synthetically. In crypto’s latest Web3 wave, proof of stake and smart contract functionality have captured the digital oil narrative. Oil is useless sitting in barrels in underground vaults/warehouses. Oil needs to be brought online and used to create more value out of the cost of the oil. The asset is only as valuable as its direct use case in commerce and activity. This introduces an interesting conundrum for asset allocators and web3 participants in this space: How do I participate fully in the distributed asset & ecosystem I’ve invested in through our centralized corporate governance and security protocols.
This is where the R&D behind the launch of Qredo has really captured my imagination and excitement for DeFi and Web3 participants. Qredo at its foundation is an MPC layer 1 wallet, one of the only few on the market utilizing this technology. There is full functionality on layer 1 for enterprises to accept, store, and send the top layer 1 assets like BTC, ETH, SOL, AVAX, BSC, LUNA, ADA, and ALGO - alongside one of the only implementations in the market with Meta Mask Institutional for DeFi access for institutions. However, Qredo takes its MPC implementation further in two crucial ways that are relevant for enterprises:
The MPC shares are held amongst a distributed MPC network of nodes (dMPC) instead of a single vendor
The MPC network is governed by a consensus driven blockchain (Qredo chain) distributed amongst a network of validators (MPC 2.0) – tracking and enforcing asset ownership and enterprise governance policies – instead of inside the database of a centralized software provider.
What does dMPC and MPC 2.0 mean for enterprises?
The network is the custodian, instead of any single vendor. As the network grows, the security grows.
Enterprise policies and asset ownership are governed by an immutable blockchain rather than in a vendor’s database – not corruptible and auditable at any time. Simply put, enterprises can finally have their centralized corporate governance policies embedded into a distributed network framework for ultimate security over those policies.
Enterprises do not need the 'aid' of any vendors to help them sign, validate through governance, or broadcast transactions.
All internal treasury functions and movements are private, fast and cheap (L2) – avoiding L1 fees altogether.
Assets held in the MPC network remain ‘online’ – ready to be deployed in DeFi and Web3 at a moment's notice.
Since no one vendor controls and maintains the signing process, no single vendor can prevent you from signing.
True DAO wallets are finally possible through on chain governance across multiple entities.
MPC 2.0 enables: p2p atomic swaps, collaborative collateral (solving pre-funding needs), and travel rule compliant transactions can be programmed natively on L2 - all of these private, fast, and cheap.
Pure usage (L2 chain) fees replace expensive software fees and contracts which are on top of L1 fees. Only pay when you use.
You are your own credit risk: zero credit risk against exchanges, a single custodian, or a single vendor.