Hello Zhen, thank you for taking the time to participate in the interview. I’d like to know a little about you and Web3Auth.
Thank you for having me. My name is Zhen Yu Yong, CEO and co-founder of Web3Auth. Web3Auth’s mission is to revolutionize authentication in the Web3 space by providing the leading unmanaged infrastructure. We enable Web3 wallets and decentralized applications, providing seamless user login for both mainstream and native Web3 users. We support many major brands including Safe, Animoca Brands, Fox.com, McDonalds, and more.
My journey into the world of decentralized finance, blockchain, and Web3 began after working at Visa and Accenture. Seeing the potential for innovation and advancement in these emerging technologies, I decided to enter this field. I am deeply passionate about empowering users through self-managed ownership of their assets, and I strongly believe in making the authentication process as secure, seamless, and convenient as possible.
Before Web3Auth, I had the opportunity to work on projects such as building the Peace Bridge, one of the first cross-chain bridges. I have also participated in various Ethereum Foundation projects focused on researching off-chain scalability solutions. This experience became the cornerstone of the establishment of Web3Auth.
1. We know that user onboarding is significantly broken in Web3. Can you elaborate on what the key challenges are with a simplified user onboarding journey in Web3?
I think the two most important challenges are the complexity of wallet setup and security issues.
Firstly, the process of setting up a cryptocurrency wallet can be quite difficult, especially for users who are not familiar with blockchain. This includes understanding concepts like private keys, seed phrases, and wallet addresses, which can prove overwhelming for newcomers.
Second, users must understand the importance of keeping their assets and data secure. When discussing security, people often refer to the concept of the blockchain trilemma. This concept emphasizes the balance between decentralization, scalability, and security in blockchain networks. Achieving all three simultaneously is difficult because improving one aspect often comes at the expense of another.
That said, there are a variety of solutions on the market. With Web3Auth’s MPC, a user’s private key is split into multiple parts and stored on various devices without the need for a seed phrase. MPC also offers enhanced authentication options such as social login, SMS OTP, and biometrics. This eliminates the need for users to remember or store seed phrases while keeping their assets secure. We are also introducing Passkeys, which enables a more user-friendly and password-less method.
2. What impact has Web3Auth had on the broader cryptocurrency market? Can you share more about your background and journey?
We provide practical solutions for non-custodial wallet management, improving UX and accessibility.
Through partnerships with industry-leading brands like Safe and Trust Wallet and Fortune 500 brands like Fox.com and McDonalds, we strive to provide the simplest and most secure access to digital assets across a variety of platforms and applications.
Last December, we partnered with Safe to launch SafeAuth, an MPC-based solution that lets developers build portable smart accounts using the authentication methods they’re already familiar with: Google and social login. Users can then use the same login to seamlessly log in and interact with over 190 dApps in the Safe ecosystem, including popular dApps like Aave and CowSwap on supported networks like Polygon, Optimism, and Gnosis Chain.
Our partnership with McDonald’s demonstrates how web2 companies can use Web3 technology to power their loyalty programs. 2000 NFTs were claimed within 15 minutes of launch, further demonstrating the demand for this loyalty program. By leveraging Web3Auth’s Wallet-as-a-Service (WaaS) infrastructure, McDonald’s can seamlessly integrate non-custodial wallets into its mobile apps, providing brand ownership throughout the user journey without the typical Web3 friction points such as gas fees and token purchases. Guaranteed. This also eliminates the need for complex seed phrases for users and reduces the barrier to entry into the web3 ecosystem.
3. What are the key differentiators of Web3Auth compared to Fireblocks, Magic, Privy and other industry players?
The main difference lies in their approach to security and decentralization. Magic provides a completely unmanaged MPC solution while leveraging a semi-managed system based on Amazon Web Services’ Hardware Security Modules (HSMs). This means that your keys are distributed across a network of nodes owned by the best companies in the cryptocurrency industry and the users themselves, ensuring there is no single point of failure.
In contrast, Privy uses Shamir Secret Sharing (SSS)-based key reconstruction while providing a built-in wallet for users who log in with email or social accounts, which may not offer the same level of decentralization and user ownership.
Fireblocks has been a traditional managed MPC player in the market for some time and its focus has always been enterprise customers. For the average user, using Fireblock is expensive and not easy to set up in a non-custodial setting. In contrast, Web3Auth offers a variety of SDKs to enable developers of all levels to put together their ideal setup, from basic integration in just minutes to advanced integration with open source architecture.
Besides that, using Web3Auth gives you several times more clarity in your development resources, infrastructure, since almost all the resources we provide are widely available and open source. Just by exploring our documentation and resources, you can see exactly how your keys are being managed end-to-end.
4. What do you think are the key drivers for widespread adoption by Web2 giants and enterprises?
Over the past few years, we’ve seen significant changes in the narrative surrounding Web3.
The key drivers for widespread adoption are varied, but the key lies in improving user experience, fostering community engagement, and unlocking new value creation paradigms. Our experience working with Fortune 500 brands like Nissan and Fox.com has revealed the enormous potential of Web3 to revolutionize loyalty programs and consumer engagement strategies.
Our partnership with Masked Singer allowed fans to vote for their favorite performers, earn rewards, and access exclusive content and merchandise from the immersive Maskverse. This not only amplified audience engagement, but also demonstrated that Web3 was seamlessly integrated into the familiar Web2 platform. By abstracting away the complexity of blockchain, we are not only democratizing access to these technologies, but paving the way for mainstream adoption.
These successful loyalty programs we’ve seen in the past serve as proof of the demand for such technology. For example, Mcdonalds’ Singapore NFT launch was completed entirely within 15 minutes. Additionally, innovations such as non-custodial wallets linked to social accounts and gasless transactions simplify and make interaction with blockchains more accessible than ever before.
5. Web3Auth’s MPC wallet has a variety of features, including account abstraction, identity verification, factor authentication, and more. Considering all these features, where does Web3Auth sit in your security parameters?
I believe in the principle of giving users self-sovereignty over their digital identities. This includes the ability for users to revoke their credentials and access permissions at any time.
For MPC, it helps create fully custodial blockchain accounts in minutes for any full-featured user. Adding additional sharing with the MFA option also makes key recovery very easy, allowing people to onboard to web3 using their existing web2 methods. On the other hand, account abstraction is a great method for on-chain key recovery and management.
However, we need an EOA that MPC can provide in a user-friendly way. Additionally, key recovery from account abstraction is expensive, so it should ideally be used when no other options are available. I believe that the combination of MPC and account abstraction is the most optimal and secure experience for onboarding the next billions of users to web3.
In addition to the previously mentioned features, we will also be launching new products that incorporate advanced encryption technologies to verify users’ identities without compromising their privacy. This allows users to own their own credentials rather than relying on a central authority.
6. What are the key developments in the Web3Auth pipeline in 2024?
In 2024, we are focused on several key developments to further enhance the security and privacy of the Web3 ecosystem. We launched Wallet Services, a comprehensive, modular solution that simplifies wallet development and enables full user flow within dApps.
Now it’s easier than ever to make your on-chain user experience as seamless and intuitive as your Web2 application while maintaining enterprise-grade security, self-management, and customization capabilities. Here are some features:
White labeling that allows any dApp to be easily customized in less than 15 minutes;
Integrated on-entry aggregator that reduces entry transaction fees by up to 60%
A pre-generated wallet API that allows dApps to engage, reward, and retain users by airdropping digital assets directly to their emails or social accounts, bypassing traditional sign-ups. As soon as users log into the dApp, they take immediate ownership of the assets in their non-custodial wallet.
As we navigate the evolving landscape of regulatory requirements, such as the Market for Cryptocurrency Asset Regulations (MiCA), we are committed to launching a tailored suite of new products for both enterprises and startups this year. Our goal is clear. To establish Web3Auth as the leading framework for secure, human-centric, and privacy-preserving identity authentication that operates on a trustless and distributed basis.
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be used as legal, tax, investment, financial or other advice.