Hey there,

Whether it's a sizzling bull run or a chilly bear market, one thing's for sure: managing your assets smoothly is super important. Remember our past chats about the headaches Web3 teams face? We've all been there - juggling assets scattered across different accounts, chains, and apps. It's like trying to herd cats, right?

Here's some exciting news: Koshance is here to make sense of that chaos! Koshance is more than just a crypto finance management platform; it's a game-changer for teams who are deep into building the next big thing in Web3. We're all about taking the financial busywork off your plate, so you can keep your head in the game of building and innovating.

The Koshance Beta is officially up and running! We can't wait for you to check it out and share your thoughts with us.

Koshance Beta Highlights: 

1. Bring your team onboard

Financial operations is rarely a one-man job. In fact, for any decent sized project it may reflect lack of delegation & collaboration. Think of Koshance as the Financial SaaS tool you always wished for. It is designed for your entire team to collaborate effectively.

Creating your workspace is easy - simply signup with an email address. Once in, invite your team members to join the workspace. (Granular level role based access is on the way!)

Some of us use the same email address for multiple organisations. You can be a part of multiple workspaces with different teams and accounts. Switching workspaces is as easy as moving between tabs.

2. Set up your Workspace

Next, bring your existing accounts on the platform. Your assets may be spread across several EOAs and SAFEs across different chains. Import them on the dashboard using the address or by connecting your wallet.

Currently, we support Ethereum, Polygon, BSC, Optimism, and Arbitrum chains, and we regularly expand our chain support!

3. Overview your finances - Dashboard

The dashboard acts like a snapshot of your finances. For founders, a key number is the All Accounts balance, which sums up all assets from the imported accounts. This is the holy grail number. 

Balances categorised according to the account type can help assess your distribution.

You will find two useful visual overviews to get a quick glance at what’s going on in your accounts. 

• Cash flow of total assets in past months - to understand the trend of expenses and income for your overall financial health.

• Asset distribution among different tokens - to give you a quick overview of your exposure.

Overall the dashboard view can help track the financial health and set direction for the future. For instance, was the revenue generated proportional to the marketing efforts last month? Is it nearly time to top up the influencer spend account considering the burn till date this month and the average burn? Overall do we have enough runway for the next 6 months? 

4. Get into the Details - Account level Balances & Transactions

Now let’s get down to individual accounts. Clicking on any account opens the account-specific view. Here you can track account-level asset balances and history of all the transactions.

The transactions are easily readable and no longer need a few hours of overhead to make sense of the Etherscan pages.

We take care of ‘what was sent to whom and when’.

Add your ‘why’ to transactions

With the tag and remark system, add context to the transaction as you execute them or whenever you find time. An organized list of transactions will save hours of back and forth during tax season. Skip sitting with the accountant to make sense of each transaction.

The key here is to effectively communicate the context behind transactions. Remarks could be as varied as

• Who is this transaction for? 

• Is this a recurring department spend? 

• Does this transaction require any follow-up actions? 

Use the filters to focus on specific spending patterns. For example, using the ‘influencer relations’ tag, you can sort through all our expenses and understand how your influencer spending has changed over time. Or simply filter how much has been paid to a particular freelancer over the last quarter. Finally, export your results filtered through keywords, date range and/or chains!

5. Address Book

An org-wide address book will compile identified and verified account addresses for quick team use. Contacts added will also be reflected on your transaction list for easy identification of the to and from parties. 

Start by adding addresses to the address book. Of course you can bulk upload a number of addresses through a csv too. It’s all about making the most of your time.  

Coming Soon! - Operate your Accounts from Koshance

This is simply the beginning. Imagine the convenience of not just tracking your accounts but also managing them directly from one dashboard. It's coming soon.

Stay tuned for exciting updates!

Try Koshance

Interested in a demo or want access? Visit koshance.com or hit us up on DM.

We are eager to speak with you!

Trusted by Web3 teams both small and large, SAFE, formerly known as Gnosis Safe, is considered the industry standard. $47 billion worth of digital assets are currently held within SAFEs across blockchains, and 1% of transactions on these chains interact with the wallet’s smart contract. In this blog, we’ll delve into the world of SAFE and explore what makes it an essential tool for builders. It has not only survived market cycles but thrived, showing no signs of slowing down. We’ll uncover some of the factors behind this success and why it is seen as an indispensable tool for any Web3 team  Finally, we will show you how to get even more out of your company SAFEs by taking them to the next level with Koshance. 

The Essentials of SAFE

The secure storage of funds can have a make-or-break say in a company’s future. Ownership of these digital assets is shared, and therefore so should be consent for any transactions. Sharing private keys is simply not an option, since each instance of sharing adds to the risk of compromising funds. Multi-signature wallets are an ideal solution for blockchain builders due to their unique traits.

They enable the 

1. Safeguarding a team’s funds 

2. Collaborative management of these funds, and

3. Paper trails that enable shared accountability

Multi-signature wallets achieve this security by requiring a pre-determined number of approvals in order to confirm an outgoing transaction. This multiple-owner system removes the single point of failure seen in private keys and seed phrases. Every owner has an equal say in the process, providing enhanced security through collaborative management of funds. SAFE leaves thorough paper trails, including the accounts that have approved transactions. 

Creating a SAFE is a straightforward process, involving just two steps. First, you designate the accounts that will serve as owners. The term ‘owner’ is used to identify a participant who is responsible for signing the transaction - this can be devices, individuals or a combination of both. Then, you set a signature threshold for transactions. For example, sending a transaction might require approval from 2 out of 3 owners. The idea here is that a single key or password is no longer the sole means of using funds, and the consent of owner accounts becomes a part of the approval process. Transaction thresholds and signers can be altered, provided the group can agree on the changes. This flexibility makes it easy to adapt SAFEs to the needs of a growing organisation. 

Blockchains achieve security through transparency - all accounts, transactions and balances can be publicly viewed. Being a smart contract built on top of this infrastructure, SAFE shares many of these traits and makes the signing process transparent as well. Knowing which owners have approved transactions can help ensure accountability. The cost of this transparency, however, is the increased transaction fees. Smart contract interactions are more expensive than standard transactions, so during times of network congestion, these fees can skyrocket. 

What Makes SAFE an Important Tool for Web3 Builders?

Put simply, SAFE is very easy to use and delivers on its primary use case extremely well. Like on most multi-sig wallets, funds held in SAFEs are much more secure than any guarded by only a seed phrase or password. Users retain control over all assets in their SAFEs, and do not need to entrust external parties with custody of their funds. The self-custody of SAFE, combined with the difficulty in compromising multiple accounts, makes these wallets a less attractive target for would-be attackers. Any instances of a SAFE being compromised lie in human error, rather than a failure of the protocol.

Then come the operational requirements for flexibility, and this goes beyond making alterations to owners and thresholds. SAFEs can hold assets from multiple blockchain that is EVM-compatible, and this includes Polygon, BNB Smart Chain, and Arbitrum. DApps such as decentralised exchanges can be used through the secure guardrails of SAFEs. 

The final, vital, distinguishing aspect of SAFE is its open-source development. The community is actively involved in testing and improving the platform, embodying the Web3 ideals of open participation. The “don’t trust, verify” attitude defines the digital asset space, and SAFE is no different. To take the security aspects up another level, SAFE is also rigorously audited by third parties. This is a crucial aspect considering developers are invited to build on SAFE as part of its growing ecosystem. Solid foundations can go a long way towards establishing confidence for users and builders alike. 

Elevate your SAFE with Koshance

Put simply, SAFE is great and we want to make it even better. We have spoken to Web3 entrepreneurs and founders all over the world to learn what works for them, and what can improve their specific workflows. Koshance is packed with quality-of-life upgrades that are designed to complement your experience of building with SAFEs. 

Companies will have multiple SAFEs and accounts across their operations, and this includes SAFEs on other blockchains. Knowing where the company funds are stored is a vital first step for many business decisions, and the Koshance Unified View is an ideal starting point. From a single dashboard, monitor all your assets including those stored in SAFEs.

Koshance's Unified View

The organizational-wide address book complements the Unified View in many ways. In addition to giving much-needed context when reviewing your transactions, you can save time and reduce the chances of errors in future transactions. Easily view and sort recipients by name, and make your digital asset financial statements more human-readable. 

The next (and most highly-requested) quality-of-life feature for your SAFE is notifications. Unlike Web2 applications that almost give us too many notifications, the lack of action-based alerts within SAFE is a recurring issue for blockchain builders. Transactions will only be executed if the signing threshold has been met, leading to idle time if signers are not active and online. Expediting the process often requires follow-ups on Telegram or other messaging apps. Koshance’s notification system is designed to save time and make following up with signers a thing of the past. Send alerts wherever your team collaborates, whether that is via email or Slack.

In a company’s early days, founders are involved in every aspect of operations to ensure their vision is realised. Once the team reaches a certain size this is simply not possible, and delegation is a must. Koshance replicates this need for flexibility in delegation and user roles for your SAFEs. The number of owners and the signature thresholds in our SAFEs currently determine how we can delegate transactions. Only owners can initiate transactions, and other owners have to approve. Koshance enables any approved individuals to initiate, but not authorise, transactions. Final approvals remain the responsibility of the owners. This can work similarly to members of your financial team writing all the details in a cheque - i.e. the recipient and amount - and giving you the final sign-off. Additional members who are brought into the system have neither signing rights nor ownership, but can help reduce the workload of the founders. This enables the scope of participation to grow from a group of pre-approved owners to an organisation-wide set of policies. 

While SAFE offers batch transactions, business operators are always looking for ways to optimise further. Those who have used SAFE acknowledge that it takes significant technical know-how to use the batch transfer functions effectively. The accounts teams in many organisations often have more experience in traditional finance than Web3, so we need to ensure that tools are intuitive and easy to use. Especially when considering the sums involved, there is little room for error. Koshance simplifies the process of sending batched transactions. Releasing vendor payments, monthly payroll and influencer payouts can be as easy as a drag & drop. 

Conclusion

SAFE has enabled shared ownership and consent to become a central part of the building process. The next step is refinement, where you can elevate the capabilities of your multi-sig wallets. Use your existing SAFEs with Koshance to optimise, automate and simplify your workflows. Building happens across many SAFEs and blockchains, and Koshance brings all your vital information into a single place. Our mission is to streamline your journey as a Web3 builder, visit our website to learn more. Join the conversation on X, where our DMs are always open to builders and enthusiasts alike. 

The beauty of Web3 lies in its inclusivity, welcoming a diverse range of ideas and projects across blockchains. The focus for innovators is now to refine this experience for users. Services will only get more intuitive and adaptive. This is no accident, with teams being the driving force behind this industry-wide development. Making services across blockchains means managing assets on each of these networks. More assets, more accounts, across more chains, and more information to track. 

Koshance comes with a series of quality-of-life features to help your team thrive. This blog focuses on the Unified View, which simplifies managing your organisation's spread-out funds. Oversee all your digital assets, accounts and transactions from a single dashboard! 

Many Tokens, Over Many Accounts and Blockchains 

Scattered liquidity is simply a part of life in Web3. 

1 - Companies are involved in activities across blockchains. More chains mean more ways to manage assets on them, i.e. accounts. 

2 - Staying safe in the digital asset space requires the spreading of risks. This is done with multiple wallets and accounts. 

Through both operational needs and safety-first practices, we are presented with a fresh challenge - tracking all your digital assets. Let's dive into the operations of a fictional Web3 company called NFTaste to understand how this happens, and how it is managed. NFTaste sells clothing paired with NFTs. Like any other company, investors, vendors, employees, and more are involved.  

NFTaste received funding in Ethereum and stablecoins. The bulk of this is stored in the treasury. When it comes to operations, stablecoins and fiat currencies are used to handle recurring expenses like payroll and vendor settlements. 

Daily operations are conducted in ETH and other crypto assets, depending on the use case. This variety of activities leads to NFTaste holding and managing a variety of tokens across chains. These include:

• Rewards for creators & influencers

• Community support and bounties

• Yield generation

• Market making

• Collecting revenue

These activities across Web3 will lead to the NFTaste team operating a range of assets - tokens, stablecoins and fiat currency. Marketing, outreach and market-making happen within this closely linked ecosystem, with digital assets being used for most expenses. Sales completed on the NFTaste and partner websites provide incoming revenue exclusively in digital assets.

To manage these tokens, NFTaste holds a few different accounts. Cold wallets on multiple chains are for long-term storage, while department-wise SAFEs are for more immediate operations. The finance team oversees activity and tops up balances on SAFEs monthly. Department reports need to include any context for transactions that can save on follow-ups when tax season comes around. Finally, revenue arrives in dedicated SAFEs on each of the chains of operation. These activities have led to NFTaste operating & tracking over 10 accounts. 

Company leaders need in-depth data across these moving parts to answer key questions around liquidity, asset allocation, budgeting and risk management. The current system is an extensive set of spreadsheets. These need monitoring and manual updates to prevent data from becoming stale. A team member ends up being assigned a time-consuming task with little room for error.

The NFTaste finance team is doing their best with tools that are available today but are nowhere close to ideal. What would be a less clunky experience for teams, that provides a more coherent view of their Web3 assets and activities?

Track Everything with Koshance

We have built Koshance ground up to aggregate the multiple holdings across protocols onto a single dashboard. 

This dashboard is where we begin, providing a top-down view of all your company’s blockchain-based accounts (including EOAs, Safes and Exchange accounts). Each blockchain has its own explorer, but the Unified View makes this information more actionable by putting all your tracked accounts on a single page. Companies need to be able to answer key questions such as:

• Based on recent history, have we budgeted appropriately for next quarter’s tech expenses?

• Are we appropriately diversified across assets to manage risk?

• How is the incoming revenue trending over time?

From the dashboard, you can easily access every tracked account. By clicking on the desired account, you can view a complete history of asset holdings, cashflow and transactions. 

Tracking activities through block explorers is not an intuitive experience since the collection of characters, hashes and time stamps are not immediately human-readable. The information is of more value if condensed to its essentials. First, there is the complexity of the account addresses. We don’t remember phone numbers any more, we save contacts. Why should blockchain activities be any different? Make records and balance sheets more readable with names instead of addresses. Use your org-level address book when initiating transactions to save time and reduce errors.

Then there is the lack of context. Leaders have sat down with the accounts team during tax season, going over the transactions, what purpose they were for and which invoice they go against. Block explorers don’t have room to communicate this information. Even if this was possible, companies would not want this information to stay on public blockchains. Koshance uses a Tag and Remarks system to get the best of both worlds. Easily sort between tags and customise your views to get the information you need on the dashboard or as downloadable reports.

Enjoying the benefits of the Koshance Unified view begins with connecting the accounts you wish to track. Easily link wallets, exchange accounts and other EOAs that you set up on services like Metamask. The use of multi-sig wallets like SAFE is widespread in Web3, and Koshance enhances its capabilities that can benefit builders. Set up email and Slack notifications for signers, and operate your safe from the platform. If you wish to spread your risk even further, a Koshance MPC account could be your next step. Just like all the other accounts, oversee and manage activities straight from the dashboard.  

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Conclusion

The life of a founder is stacked with decisions, many of which can determine the future of the company. Making the right choice, with confidence, is what every leader strives to be able to do. An essential starting point is gathering in-depth knowledge of your digital asset operations. Koshance is here to prove treasury management in Web3 can be easier. Monitor all your vital information in a single place and stay updated in real-time -  all EOAs and SAFEs, across blockchains, and all exchange accounts. 

This is just the first of many quality-of-life improvements we are bringing to builders in Web3. Visit our website for a look at the other ways Koshance can help you streamline your operations. We are always on the lookout for new features that will help you deliver your vision, so feel free to get in touch. Subscribe to our blog and join the conversation on X, the site formerly known as Twitter. 

Till next time, stay safe and keep a close eye on all those accounts!

We've spoken to dozens of  Web3 founders to unravel what challenges they face. Issues range from managing multiple wallets to keeping track of transactions across multiple chains. Even the monthly exercise of annotating each transaction for reporting. The time spent on these tasks could easily be used for more productive endeavors.

Koshance changes this by helping teams manage their financial operations in a secure and user-friendly manner. Think of us as the operations manager you never had, who allows you to focus on what matters: your core business.

Securely Manage Your Financial Operations

Koshance is a crypto finance management platform that consolidates all your existing EOAs, safes, and exchange accounts in one place. We ensure security while keeping your assets accessible for daily operations. Additionally, we provide MPC-based accounts that offer robust security and smooth account recovery. Koshance streamlines financial operations and portfolio monitoring to help teams function efficiently at scale.

Easy Onboarding

Koshance is designed for ease of use. Within minutes, you can add accounts, set up your dashboard, and configure access controls.

Enhanced Security

Create accounts that leverage Multi-Party Computation (MPC) technology, ensuring robust security while simplifying key management. 

• Threshold Signature Scheme (TSS): TSS divides the cryptographic key into multiple 'shards'. A predetermined number of these shards are needed for authorisation to sign a transaction. This method enhances security by necessitating multiple distributed key portions for any action.

• Seedless Accounts Minimise Risks: MPC technology eliminates the need for seed phrases. By using a distributed key generation mechanism, private key shards are created across different devices. This ensures users don't have to remember seed phrases, and even if a shard is lost, it can be regenerated.

• Efficient Recovery Mechanisms: Leveraging MPC’s resilience with pre-configured authentication methods, recovering lost shards, or replacing devices is straightforward. So, even if things go wrong, you have a secure and seamless way back into your account.

Unified Accounts

Effortlessly integrate existing accounts ranging from popular solutions like Gnosis Safe to major exchanges. Say goodbye to the hassle of juggling multiple platforms.

• Consolidated View:  Get a comprehensive overview of all your assets in one place. No need to switch between multiple apps to monitor balances or to track transactions.

• Efficient Management:  Execute transfers, swaps, and other operations efficiently from one dashboard. Whether you're making a trade or interacting with a contract via Gnosis Safe, Koshance simplifies it all.

• Enhanced Security: Limiting the platforms and interfaces you engage with reduces the surface attack vector. 

• Informed Decision Making: With a holistic view of your organization's finances, you can assess trends better, gauge your portfolio's health, and strategize your next moves with confidence.

Policy Controls

Koshance offers you advanced policy controls designed to match the operational needs of Web3 teams.

• Role-Based Access: You can delegate tasks based on individual roles. For instance, team members can initiate transactions, but the verification and signing can be exclusive for senior members.

• Granular Transaction Permissions: Determine who can send what assets and up to what value. For instance, allow certain individuals to execute transactions below a particular threshold without needing higher-level approvals, ensuring faster turnaround time for routine transactions.

• Daily Transaction Limits: You can set daily caps on team spends.

• Asset/Network-Specific Rules: Set tailored rules for specific assets and networks. You could restrict transactions on specific networks or limit the transfer of particular cryptocurrencies.

• IP-Based Restrictions: For added security, you can configure to allow transactions originating from whitelisted IPs.

MFA for Approvals

Double Up on Security using Multi-Factor Authentication (MFA). It introduces another step for transaction verification. So, even if your password is compromised, the malicious actor can’t steal your funds.

Comprehensive Reports

Maintain detailed and organised records of all transactions, ensuring a transparent and accountable system. 

• Tagging: Easily categorize transactions using tags. Whether it's for monthly expenses, specific projects, or investments, tagging ensures you can identify and classify transactions, allowing teams to manage their cost headers.

• Add Remarks: Context matters. With the ability to add remarks, team members can provide additional details or reasons for a particular transaction, ensuring everyone's on the same page.

• Track Initiators and Approvers: Know who's taking action. For every transaction, see who initiated and approved it. 

• Export Comprehensive Reports: Export detailed reports of transactions for accounting and taxation purposes.

Streamlined Transactions

Eliminate the unnecessary friction teams often face while managing their financial operations 

• Transaction Fees: Koshance takes care of transaction fees on all major networks. Never worry again about recharging your wallets or bridging tokens to pay the gas fee.

• Bulk Payments: From payroll to vendor settlements, process multiple transactions in one go, saving time and reducing manual errors.

• Scheduled Transactions: Put Your Operations on Autopilot. Whether it's for a planned investment, monthly dues, or other financial commitments, schedule them in advance. Recurring transactions are a breeze with Koshance.

Updates & Notifications

Never miss an important transaction or account activity with our notification system.

• In-app updates: Get real-time updates within the platform. Whether it's a transaction completion or any critical activity on account, you'll always be informed.

• Emails for actions: Receive email notifications for key actions such as funds transfers or transactions awaiting approval.

• Slack and Discord notifications: Easily integrate with your team’s Slack or Discord channels, ensuring you receive timely updates on the platforms your team already uses, enhancing communication and response time.

We're not stopping here. We aim to provide a seamless, all-encompassing financial operations platform for Web3 founders. We strive to make every interaction as frictionless as possible. Our platform is designed to accommodate treasuries of all sizes, giving you the flexibility to manage your financial operations effortlessly. 

We understand the complexities of the Web3 world. Koshance is built by builders, for builders. Our private beta version is now live, showcasing its capabilities with a select set of features for you to explore.

If you are interested in trying our product or learning more about Koshance to simplify your financial operations, feel free to contact us or follow us on X. We'd love to hear from you.

Crypto wallets serve as your gateway to the Web3 world. Choosing the right wallet goes beyond looking for ease of use; it's about making a wise long-term decision. With an evolving landscape of trends and security, it's important to choose a wallet that fits your needs. So, how can you be sure you're making the right choice? 

It is essential to know in-depth about the available options and make an informed decision whether you're navigating this terrain for the first time or re-evaluating your existing wallets. 

In this blog, we'll dig into all the different wallet types, from the regular ones, such as Seed phrase-based to Smart contract-based and MPC-based. We will start with key concepts and terms necessary to understand these wallets and what they offer. 

Account | Address | Keys

A crypto account can be thought of as a traditional bank account, serving as a place to store your asset balance. It has a unique identifier, an account address, which acts the similar to a bank account number. It is a 42-character hexadecimal string that starts with '0x'. Just like you share your bank account number to receive a wire transfer, you'd share your Ethereum address to receive tokens or other assets.

In the blockchain world, an account can refer to either Externally Owned Accounts (EOAs) controlled by a user through private keys or Smart Contract Accounts controlled through logic.

When you create an EOA, a unique private key is generated. The public key and the account address are derived from this private key. 

When you sign transactions on the blockchain using this private key, anyone in the world can verify that it was, in fact, your account address that sent the transaction. Check out Andrew Griffith's visual demonstration to see how this works.

Typically, we access our crypto accounts and sign transactions from a crypto wallet. But isn't a wallet the same as an account? Actually not. A crypto account serves as an individual bank account. The wallet is an interface, like a banking app, that provides a user-friendly way to access these account(s).

The wallet itself doesn't hold your assets. Instead, it interacts with the blockchain ledger to display your balance and manage transactions. The critical role of a wallet is to manage your private keys, which are essential for signing transactions and proving ownership of your assets. 

If someone gains access to your private key, either through hacking your wallet or some other means, you risk losing access to your digital assets forever. So, safeguarding your private keys is important.

Secure those keys!

To safeguard your private key, keep it offline, shielded from fire and water, and out of sight. Just make sure it's not so hidden that you can't find it yourself!

In the world of money, there are always people trying to take yours. Even core developers like Luke Dashjr have faced the hardships of dealing with private keys and lost millions of crypto assets.

This threat is even more severe for founders and builders in the blockchain world. Since they hold funds for their organisation, securing those keys and choosing the right wallets becomes a top priority. 

Let’s look at the wallet choices available today and understand their underlying security and key management methods.

Wallet Types

Wallets can be based on either of the two types of accounts: Externally owned accounts (EOA) or Smart Contract accounts.

Let us talk about them one by one.

Seed phrase-based wallets (eg., Metamask, Ledger):

Seed-phrase wallets are a traditional form of Externally Owned Accounts (EOAs). Upon creating this wallet, you'll be given a seed phrase—usually a string of 12 to 24 words that acts much like a login password for your wallet. You can create multiple accounts from one seed phrase, but be careful: if someone else gets access to your word list, they can control all your accounts.

You can choose security over flexibility or vice versa with the two types of wallets available in this category. 

1. Hot wallets (connected to the internet - more available)

2. Cold wallets (offline - more secure)

You are amongst the 30 million users of Metamask, a very popular hot wallet in this category. Some of you may even be the owner of a Ledger cold wallet. 

They are also free to create and relatively easy to use. These are popular amongst Web3 enthusiasts, multi-sig signers (more about that later), and HODLers. 

However, This type of wallet is not the best fit for groups or teams. Using a single seed phrase for team access is risky and can compromise security. They also leave a trail on the blockchain, making it easier for outsiders to track your activities.

Custodial wallets

Custodial wallets offer a different approach to asset management. You hand over access to the assets to a third party that holds and stores your assets.

From a legal perspective, a custodian can act in one of two ways:

1. As a fiduciary (aka trustee/qualified custodian), legally bound to reserve your assets exclusively for you, such as Anchorage Digital or Fireblocks.

2. As a bank, where your assets are used to generate income with a promise to return them. 

These are very easy to use with Web2 type login password and occasionally 2FA. They typically have access to customer support and often implement additional security layers, such as insurance against hacks and fraudulent activities, for asset recoverability.

Exchange-based wallets like Binance and Coinbase are popular amongst novice users getting into crypto assets and traders. However, users are required to trust the custodian. Crypto giant FTX will forever be known as a high-profile cautionary tale. Many Individuals and teams lost millions of assets when people running FTX co-mingled customer funds locked on the exchange and illegally used them against its own terms of service.

Premium custodian services are also available in the market. These are built for HNIs and Institutions, offer individual segregated accounts, and come at a cost. These typically have high-security measures ranging from MPC-based tech to physically secured cold wallets. You may have guessed that you must go through elaborate procedures to access your assets.

Smart Contract wallets (including multi-sigs)

Smart contract wallets operate differently than traditional wallets because they don't use private keys for account access. Instead, they rely on the logic and rules programmed into a smart contract. For instance, they can include features like "guardians" to help users regain access to their accounts. 

Safe (formerly Gnosis Safe) is one of the most widely used smart contract wallets, securing $54 billion worth of assets. Safe allows you to create a wallet using an Externally Owned Account (EOA) and add other EOAs as co-owners. The multi-signature logic is quite straightforward: a transaction goes through only if a predetermined number of Safe owners approve it, after which it gets executed on the blockchain.

While multi-signature accounts like Safe offer enhanced security, they do come with some limitations:

1. Slow, since approvals happen manually.

2. Setting up the wallet itself also incurs a cost. This is because the wallet is a smart contract deployed on the blockchain, and deploying such contracts requires computational work that incurs a gas fee.

3. Given the public visibility of blockchain activities, anyone can observe a multi-signature transaction being organised, raising potential privacy concerns.

Multi-signature is just one feature you can get with smart contract-based wallets. There's a lot more these wallets can do, and new features are constantly being developed. Exciting initiatives like ERC-4337 for account abstraction aim to simplify and enhance the user experience, making it more accessible for the average person. 

The Ethereum Foundation recently announced grants for 18 teams to develop projects in this direction to make them more appealing to the masses. 

Team-friendly functionalities can also be built as a part of Smart contract wallets, making them convenient for Web3 teams looking for accountability and security.

However, there are some challenges when using them. For instance, you need to set up and maintain a separate Smart contract account for each chain. This means managing and tracking multiple account addresses. There is also a rare but potential chance of losing access to your multi-sig account if a threshold of the Safe owners lose their EOA keys.

Multi-Party Computation (MPC) based wallets

MPC-based wallets offer a fresh take on security for EOA (Externally Owned Accounts). In traditional wallets, safeguarding a seed phrase is crucial. However, MPC-based wallets divide a private key into parts called shards, which collectively complete the key for your account.

Shards can be stored across different devices or accounts. Multiple parties—like your computer, a secure server, and your mobile phone—can collaborate to perform cryptographic operations like signing a transaction, all without ever combining the shards.

Since there's no need for a whole private key to be generated, there's also no single key to lose or be stolen. A single shard is useless for transactions, providing an extra layer of security.

If a shard is lost, it can be easily backed up and restored without compromising the security of the entire account. You can even create new or retire existing shards for a current account.

MPC-based wallets are ideal for teams. They allow threshold-based signing, meaning multiple parties can work together to prepare valid transaction signatures. The actual signing by individual shards occurs off-chain, reducing the workload on the blockchain and saving on transaction fees. Chain-agnostic wallets allow you to use the same account address across different networks, simplifying asset management.

MPC-based wallets merge advanced security with operational ease, providing an excellent option for individuals and teams.

Conclusion

Choosing the right wallet is more than just a matter of convenience; it's a critical step in safeguarding your digital assets in the ever-expanding Web3 universe. From traditional seed-phrase-based wallets like Metamask to advanced options like multi-sigs and MPC-based wallets, the choice should align with your personal or organisational needs.

In our increasingly digital world, security can't be overlooked. Always safeguard your private keys and explore more secure options like multi-sigs or MPC-based wallets for extra peace of mind.

The world of cryptocurrency is continually evolving. This includes innovations in security protocols and wallet features that make interacting with Web3 more user-friendly and secure, leaving you in control of your assets.

At Koshance, we're working on next-level solutions to enhance the wallet experience for Web3 teams. Interested in learning more or sharing your own wallet choice experience? We'd love to hear from you! Feel free to reach out to us on X. (the site formerly known as Twitter).

Thank you for reading. Stay secure!

Building companies is a hard endeavour. Ranging from ideation to execution to finding PMF, there are thousands of pitfalls that a founder faces. These challenges manifest in different ways as the teams grow and scale. Leaders understand that the difference between success and failure is narrow and lies in their decision-making and focus.

The more operators and leaders can prioritise the business's core, the higher the chances of its success. In reality, there is much more on their minds. A whole bunch of behind-the-scenes work is needed to keep everything running like a well-oiled machine.

Finance is one such function and a critical one at that. Operations don't need to be a long list of manual tasks and time down the drain. Given this, there is an ample range of tools streamlining financial operations for conventional companies. This is not the case for Web3 native companies managing funds on-chain. The challenges here are native to the space that we operate in.

Current landscape

Let's look at the tools at the disposal of Web3 organisations today. As they say, follow the money.

A large portion of a Web3 organisation's treasury is held in digital assets. Assets must be kept secure and accessible for day-to-day operations.

Given the nascent state of the web3 market, founders must ensure that their capital is safely diversified across avenues. Projects need to identify their needs and risk appetite considering parameters like access rights, ownership model, asset type, and liquidity requirement.

Web3 founders want to:

• safeguard assets with hardware wallets or with professional custodians,

• store operational capital in a multi-sig or EOA accounts over different blockchains,

• allot individual wallets/accounts for designated teams/people, and maybe even

• hold some assets on exchanges for investments, swapping, and off-ramping.

Accounts spread over several platforms, chains, and addresses bring the required diversification at the cost of ease of access. Keeping tabs on the 'balance sheet' is a real pain too. Often, someone from the team manually tracks balances on an Excel sheet. This is a time-consuming exercise and is static.

We must be able to dynamically monitor not just balances but also the status of all transactions. Payroll, subscriptions, expenses, rewards, and more are a big part of financial operations. And these in-and-out transactions involve multiple fiat and crypto transactions spread over multiple blockchain networks.

Operators in the Web3 space have experienced the pain of manually processing what could be simple batch transfers. Creating telegram groups for coordinating multi-sig owners for their signatures is also commonplace. Often, multiple people have access to critical access and information, increasing the likelihood of funds being misused, intentionally or otherwise. 

Not ideal operation conditions, I'm sure you'll agree!

What will help the founders and their teams operate seamlessly and efficiently?

Based on our firsthand experience and feedback from teams like yours, here are the key elements that can improve your operational workflow.

What can be better

Non-custodial accounts with easy recovery 

Non-Custodial Wallets trump Custodial ones when it comes to control.

Not your keys, not your coins. But beware with great power comes great responsibility! This is important as a lost or compromised key could bring your operations to a standstill. Simpler key management should be easily enabled, allowing easy recovery and backup options.

Unified Asset Dashboard and Monitoring 

A comprehensive, automated view of your entire organisation's assets, whether spread across exchanges, Gnosis Safes, or externally-owned wallets, is necessary for informed business decisions. Monitoring transactions and alerts across all wallets and accounts should be easier than it is today.

Efficient Delegation with Customisable Access Control

The ability to set role-based access to the accounts will help teams with quicker turnaround times and better delegation. Initiating transactions is not necessarily the best use of a founder's time. Custom spend access below particular thresholds will simplify your life and ease the organisation's interactions with external vendors.

Automation and value add features for transactions.

Manually entering recipient addresses for recurring activities such as vendor settlements, payroll, and airdrops wastes much time and leads to manual errors. Such a practice should no longer be a concern for Web3 companies. Automated processes and few-click operations can reduce errors and save time for tasks like bulk transfers. Historically for this, orgs have relied on external applications.

Simplified Fiat operations with easy on/off ramps

Web3 companies are all too familiar with challenges in integrating fiat rails. Restricted banking partnerships, regulatory complexities, account closure risks, and plenty of reluctance! What you need is fiat access with easy on and off ramps.

Ideally, these should be on a single platform simplifying operations while ensuring security.

Traditional financial infra has developed effective and efficient support systems for decades. In comparison, the blockchain ecosystem is recent history. However, if we are to scale securely and firmly from here, the management & operations need to be simple and efficient.

The Web3 teams need to be able to focus on creating, not deal with the challenges behind operating a crypto org!

Are you ready for simpler crypto finance management? Our team is cooking something that'll revolutionise how you handle your financial operations. Help us craft a better solution here.