Ryder, a cryptocurrency startup, has secured $1.2 million in funding to introduce a novel approach to safeguarding digital assets by eliminating the need for cumbersome seed phrases.
Seed phrases, typically consisting of 12 to 24 words, have long been a challenge for crypto enthusiasts who must store them securely to access their funds.
Ryder‘s solution leverages “social recovery,” where users enlist the assistance of five trusted friends or family members to regain access to their crypto wallets if their seed phrase is lost.
The recent funding round, led by investors including Oak Grove Ventures, the Bitcoin Frontier Fund, Muneeb Ali from Trust Machines, and SBX Capital, has powered this innovation. Ryder One utilises the Shamir Secret Sharing (SSS) algorithm, which distributes private keys among a group, ensuring that no single user can reveal the private key without collaboration.
Social recovery, a central feature in Ryder’s approach, revolves around entrusting five individuals to safeguard one’s crypto holdings. These trusted contacts, referred to as “guardians,” play a crucial role in aiding with wallet recovery. When necessary, three out of the five guardians must jointly authorize a transaction to grant access to the account.
Ryder’s new wallet incorporates its own implementation of SSS.
It combines multiple devices with a mobile app, making it a secure and user-friendly solution. The streamlined onboarding process takes less than a minute, making it accessible to a broader range of users.
Louise Ivan, CEO of Ryder, recognised the unpopularity of traditional seed phrases among users. Drawing from his experience at Bitcoin smart contract protocol Stacks, he sought to develop a product that addresses this issue while focusing on core problems.
Ryder’s hardware wallet adopts the Shamir Secret Sharing Algorithm, previously used by Ledger, a crypto hardware wallet provider.
While there has been criticism of SSS due to the complexity of dividing private key access among multiple devices, Ryder believes that this approach enhances security by reducing the vulnerability of a single point of failure.
The hardware wallet market, projected to reach USD$1.2 billion by 2030, is highly competitive but has seen limited innovation in recent years. Self-custody through seed phrases remains the dominant approach, with several established players.
Ryder’s primary competitor, as stated by Louise Ivan, is Ledger, known for its experience in the crypto industry and the human-centered design of Ryder One.
Investors in Ryder’s funding round share the conviction that innovation is crucial for the hardware wallet space.
Muneeb Ali, a leading investor, believes that enhancing innovation in this sector benefits the entire crypto industry.
Ryder One is set to launch on November 1st via Kickstarter, initially supporting popular tokens such as Bitcoin, Ethereum, Polygon, and Solana. Ryder’s pioneering approach to social recovery and utilization of the SSS algorithm aim to mitigate the challenges related to seed phrases, ultimately enhancing the user experience in the cryptocurrency realm.
While Ryder’s innovative approach to crypto wallet security appears promising, it raises important questions about the potential risks and drawbacks of social recovery.
Introducing a new system come with its own set of challenges, including potential issues of trust, security, and the reliability of designated guardians. Can social recovery prove itself in the long run as the ultimate solution for safeguarding digital assets?