Updated on: February 22, 2024
SafetyDetectives spoke with the Head of Communication at Zengo, Ari Gore, about crypto wallets, the impact of DeFI and NFT on the crypto ecosystem, and he gave some good advice for people just getting started in crypto.
Can you introduce yourself and tell me about your role at Zengo?
Hi, I’m Ari Gore, Head of Communications, which is part of the marketing team at the Zengo wallet. Zengo is the most secure self-custodial crypto wallet with no seed phrase vulnerability, and I’ve been with the company for about a year and a half.
Since I joined the company, our marketing department has grown significantly after raising around $20 million in our Series A from some of the most prestigious VCs, including Samsung Next and Insight Partners.
My primary role is managing social media, PR, and workshops where we teach people about the crypto ecosystem, including topics like MPC as a security primitive and, more specifically, how Zengo’s MPC infrastructure works. Because it’s a different kind of self-custodial wallet than most are familiar with, education plays a critical role here.
Can you give me some background on Zengo, and the top features of your wallet?
Zengo was founded in 2018, and launched the first version of the product in 2019. Security is a major part of our DNA, and our co-founders focused on that from the beginning. We spent a full year focusing on building out the deep cryptography and security infrastructure behind the wallet before we launched it to the public.
Zengo didn’t just want to create just another crypto wallet; we wanted to do something exceptional. That’s why we decided to build a self-custodial wallet based on MPC technology, instead of one based on those seed phrases you might have heard of – which are quite vulnerable and one one of the main reasons why so much crypto has been lost or stolen over the last 10 years.
In many ways, Zengo functions like a traditional crypto wallet. You can:
- Store assets from many chains like Bitcoin, Ethereum, Polygon, Dogecoin, Tezos and more
- Buy and sell crypto through our multiple purchasing partners
- Securely store and hold for a long period of time
- Trade directly through the wallet
- Connect to Web3 DApps on the Ethereum and Polygon blockchains.
One of the most distinguishing features of our wallet is we have integrated, live 24/7 support, in multiple languages, with a response time of 2 minutes. It’s really helpful for our customers to literally be able to tap on a button and connect with a real person who can help with whatever questions they might have.
What are some general security vulnerabilities with Crypto wallets?
The statistic that I believe is crucial to share is that in the last 10 years, over $100 billion worth of Bitcoin has been lost or stolen due to seed phrase mismanagement!
The reality is that the current system is broken when it comes to self-custody. If the early adopters: the crypto OGs, the coders, can’t self-custody their own crypto assets, how can we expect the billions of people who are entering this ecosystem, enticed by its long-term promises, to do so as well?
As an industry, it is irresponsible for us to place the burden of security entirely on individuals and disregard their losses if they make a mistake. We are all well aware that there are no second chances on the blockchain.
Self-custody is broken. Why? Because it relies on a single point of failure: the seed phrase. This phrase, consisting of 12 or 24 words, represents your wallet. It’s like your gmail account’s username and password all tied into one. If you lose it, it’s game over. You can’t recover your assets.
However, if someone else discovers your seed phrase, they can easily steal all of your assets. Your seed phrase does not have any inherent connection to you apart from the fact that you possess it. Therefore, everyone says you need to store and secure it meticulously, ensuring no copies exist that could grant unauthorized access.
With innovative companies like Zengo, we’re starting to witness the emergence of more robust and secure solutions in the market, such as Multi-Party Computation (MPC). It’s like the internet era. You started with AOL and Netscape. But the real innovations came after 2000 with companies like Google and Apple.
I genuinely believe in the power of MPC. It has been the foundation for a number of years and has been employed by notable companies like Fireblocks, a prominent B2B company that has facilitated the custody of billions of dollars in crypto assets. Coinbase recently announced its Wallets-as-a-Service, which incorporates MPC technology. However, Zengo was the pioneer in bringing MPC to everyday customers. We were the first consumer wallet to offer MPC as an alternative to seed phrases. In simple terms, this means our system has no single point of failure.
Here’s my favorite statistic: Since the launch of our wallet in 2019, we have amassed over 900,000 users worldwide. How many Zengo wallets have been hacked?
The answer is zero. This MPC-based system is significantly more secure than the conventional methods. By constructing a system that is secure by default and one that minimizes the chances of human error, we can foster sustainable growth within the industry and assist individuals in securing their assets without constant stress and worry.
How do you see the rise of Decentralized Finance (DeFi) and NFT’s impacting the broader crypto ecosystem?
I think that we’re in crypto winter right now. A lot of people are working on developing intriguing and brilliant products that will come to market in the next year or two.
There’s no doubt that decentralized finance (DeFi) holds the key to the future of crypto. When we reflect on the previous market collapse, most of the centralized players had problems – but DeFi remained intact. It was remarkable to witness one centralized company after another betray their customers and the industry due to operations happening inside a black box that no one really understands. Unfortunately, this problem persists because we lack a legitimate regulatory frameworks in any country.
Right now, the only place where legitimate regulations exist is within the code of DeFi. Bitcoin and Ethereum continued to produce and validate blocks, and DeFi systems continued on-chain to do what was expected of them.
This doesn’t mean that DeFi is safe from bad actors. We can anticipate an increased focus on nefarious individuals who attempt to exploit vulnerabilities within code or smart contracts. The big question lies in finding a solution and determining how crypto wallets will respond.
At Zengo, one of our responses was to develop a built-in Web3 firewall. Whenever a Zengo customer interacts with a smart contract, whether it involves purchasing an NFT on OpenSea or trading on Uniswap, our built-in firewall automatically engages to prevent unintended approvals.
Moving forward, we can expect the entire industry to embrace these advanced security systems. Without such measures, people will continue to make mistakes. In 2022 alone, an estimated $4 billion worth of crypto assets were stolen due to users actively engaging in DeFi and unknowingly approving transactions they didn’t fully comprehend. Therefore, it is imperative to incorporate additional security measures as a default component of engagement in DeFi spaces.
What advice do you have for someone getting started in Crypto?
I believe that crypto is currently going through the traditional adoption cycle we have witnessed with every new technology. In fact, it closely mirrors the adoption cycle of the internet. At times, crypto has even surpassed the internet in terms of adoption speed. If this trend continues, we can expect explosive growth and widespread adoption of crypto by folks around the world over the next decade or so.
When considering any new technology related to crypto, the key question to ask is: What problem is it trying to solve? If you don’t understand, then don’t invest. And if you are starting out, your focus should be around educating yourself. Unlike the traditional centralized world, the blockchain offers no second chances. Once you approve a transaction, it is irreversible. If you send funds to the wrong address, there is no way to retrieve them.
For those who are new to crypto, I usually suggest buying a small amount of Bitcoin, Ethereum, or any other cryptocurrency that interests you. Purchase an amount that you don’t see as a financial investment but rather an investment in your education. It could be $50 or $100, for example. Consider it as buying an expensive book. If you happen to lose that amount, it’s an expensive lesson, but it won’t drastically impact your life. By taking this approach, you can learn important concepts such as understanding your wallet address, sending transactions, network fees, and fluctuations in price. These insights are critical for becoming a confident, secure, and knowledgeable user of crypto in the long run.