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The novice-friendly user experience provided by ZenGo comes from its use of MPC technology, threshold signatures and biometrics, which lowers the threshold for users to keep private keys.
Written by: Zhang Jingjing
The keyless cryptocurrency wallet ZenGo introduced by Chain Wen 2 years ago recently completed a US$20 million Series A financing led by Insight Partners. In addition, Samsung Next, a venture capital fund owned by Samsung, also invested in ZenGo again. ZenGo plans to use these funds to further expand its financial services.
Founded in 1995, Insight Partners is a venture capital institution focusing on investing in high-tech and technology companies. It has invested in more than 400 companies around the world, including Twitter, Calm, Shopify, Lightricks, etc.
The core feature of ZenGo is that its key management experience is closer to traditional Internet products, and only facial biometric technology is required to back up and restore accounts. Technically, they are implemented through integrated secure multi-party computing (MPC) technology, and currently support more than 50 types of assets, including Bitcoin, Ethereum, Tezos and Terra. ZenGo has also joined Visa’s Fast Track (Visa Fast Track) program, which will issue a non-custodial encrypted payment Visa card, which is first applicable to the United States and then expanded to other countries and regions.
ZenGo advantage: no need to save mnemonic words and private keys
ZenGo does not require users to manage private keys and passwords, and can back up and restore accounts through facial scans. Even newbies and individual investors who do not understand the cryptocurrency industry can enjoy security while having a convenient user experience.
ZenGo can achieve this kind of novice-friendly user experience from the secure multi-party computing technology (MPC) it uses in cryptography, using threshold signatures and biometrics to reduce the threshold for users to keep private keys.
Simply put, ZenGo’s client side stores a part of the private key, and the server side stores another part of the private key. When sending a transaction, the user signs the transaction on the client and then sends it to the server to construct the final transaction using the signature aggregation method.
The threshold signature mechanism (TSS) used by ZenGo is a process of generating and signing distributed keys through cryptography, which is different from the traditional understanding of multi-signature. Using TSS, you can replace the traditional private key with two independent mathematically calculated “mathematical secret shares”, one of which is stored on your phone and the other is stored on ZenGo’s server . Even if one of them has a problem, there will be no single point of failure, and the asset is still safe.
For a more detailed understanding of ZenGo’s operating principles, please refer to How to Decentralize ZenGo, a wallet led by Samsung that does not require keys and passwords? “ An article.
ZenGo business model: collect commissions for deposits and withdrawals, which increased by 20 times last year
The profit model of many cryptocurrency wallets is ultimately realized by providing financial services, and ZenGo is no exception.
For example, MetaMask did not have very direct income before the launch of the enterprise version and the aggregate transaction function MetaMask Swap, and the domestic imToken also gave the responsibility of revenue to the decentralized transaction protocol Tokenlon.
Of course, for the most basic functions of the wallet, sending and receiving digital assets, ZenGo is free. However, when users need to buy and sell cryptocurrencies, they will charge a certain fee , that is, when users need to deal with fiat currencies, ZenGo will charge a certain percentage of commissions. Of course, this profit model is unrealistic for the mainland, but it can be achieved in many overseas regions.
ZenGo said that product business revenue has achieved a 20-fold growth in 2020, the number of customers has increased to 100,000, and the transaction volume has reached US$100 million. Its growth in 2021 is even more significant. In the first quarter alone, ZenGo added 100,000 users and USD 100 million in transaction volume.
ZenGo’s future: research and development of MPC technology, establishment of industry alliances and research groups
ZenGo has established an MPC alliance with Sepior and Unbound to jointly research and promote MPC technology. As a practitioner and researcher of MPC technology in the blockchain field, ZenGo knows that the implementation of MPC is difficult. Without proper review and testing, MPC codes with highly difficult cryptographic techniques are prone to errors. ZenGo makes its code open source for other MPC technology users to refer to, avoiding other developers from misusing the technology or repeating the mistakes ZenGo has made in practice.
It also has a research group ZenGo X composed of more than a dozen academic and industry researchers. This research group combines knowledge of applied cryptography and distributed system security to promote the use of MPC. ZenGo X also cooperated with the VDF Alliance and the Ethereum Foundation to review the protocol in the Ethereum 2.0 design and discovered the loopholes in the Diogenes protocol, helping it to update and iterate to reduce attacks and build a more secure Ethereum 2.0.
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