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Seed phrases have been the bane of many crypto enthusiasts because they’re long multi-word phrases that have to be safely stored so users can access their funds. Now one company is trying to make them a thing of the past by leaning on a more user-friendly approach known as social recovery.
Social recovery relies on users finding five friends or family members who can help recover access to their crypto wallet if they lose their seed phrase.
Ryder has closed a $1.2 million round and launched its flagship Ryder One hardware wallet, a physical device that replaces seed phrases with its novel TapSafe recovery feature. The round was led by Oak Grove Ventures, the Bitcoin Frontier Fund, Muneeb Ali from Trust Machines, and SBX Capital among others.
The Ryder One wallet taps into the widely known Shamir Secret Sharing (SSS) algorithm, a cryptographic formula that distributes private information (in this case, private keys) among a group. No single user has the ability to reveal the private key. Rather, the group has to act together to reveal the secret.
The newly launched wallet will use its own implementation of SSS, combining multiple devices along with a mobile app, offering a sleek and easy-to-approach wallet.
With TapSafe, the company alleges the onboarding process has now been reduced to under a minute, without sacrificing security. It’s a tool, says the company’s CEO, made for the masses.
Louise Ivan, Ryder’s co-founder and CEO told Decrypt “I realized I had eight hardware wallets, with my recovery phrases split all over the world, and thought–how is a normal person going to do this?”
"People just don’t like seed phrases,” he said. So, after several years at Bitcoin smart contract protocol Stacks, Ivan decided it was time to “build a product that focuses on core problems.”
Ryder’s new hardware wallet isn’t the first to abstract keys through the Shamir Secret Sharing Algorithm. An implementation of SSS was central to the controversial key recovery service launched by Ledger, and there are other companies on the market that have been approaching this scheme.
SSS has faced some criticism, due to the augmented complexity of splitting up private key access among several devices. “There is always the threat of collusion,” said Ivan, but at the end of the day, “one person is easier to attack than four.”
Set to grow to $1.2 billion by 2030, the hardware wallet market is competitive, but has remained somewhat stagnant over the years. Self-custody reigns supreme through seed phrases that require comprehensive key management set ups, along with a strong stream of incumbents that Ryder will have to overcome.
Ledger, despite its controversial key recovery service, is the main competition, said Ivan. He told Decrypt that when he approached his investors, many of them wanted to know how the company would compete with Ledger.
For him, it’s the team’s vast experience across the crypto industry, along with Ryder One’s “human centered design.”
Ivan explained that although the team has a long history in crypto, investors were puzzled about their choice to build hardware. Ryder’s CEO said that although most investors now see infrastructure as a more important category, Ryder thinks the hardware wallet market is in need of innovation.
Muneeb Ali, one of the round’s leading investors, echoed the sentiment, telling Decrypt that “bringing innovation to the hardware wallets space is a win-win for the whole industry.”
Edited by Stacy Elliott.