That’s why entrepreneurs, infused with venture capital, are racing to make crypto applications more secure. One of them is American-based Sopad, which recently raised $7 million in a pre-Series A funding round.
Sopad’s goal is to make private keys safer. Private keys, critical to decentralized crypto apps, let individuals take control over their digital assets through self-custody wallets rather than leaving control to a centralized institution.
When users make a transfer from their self-custody wallet, they need to sign off on the transaction with those passphrases. Users basically become their own banks.
This arrangement comes with risks though. If hackers get hold of certain secret codes and drain the corresponding wallets, users have no way to recover their funds in the absence of a centralized party that is shouldering responsibilities.
Sopad’s solution to buttress the security of private keys takes cues from the multi-party computation (MPC) concept, which was first introduced by a Turing Award-winning computer scientist. In the context of digital assets, MPC works by distributing the signing process between multiple computers, in contrast to the conventional way of relying on one private key to approve transactions.