Securing team funds onchain
Onchain teams learn what it really means to "be your own bank." It's complex and somewhat frightening. The fear can be lessened by trading off for hassle instead. That sounds negative, because it is — luckily a better way is coming with the advent of smart accounts.
Meanwhile, in the current (soon-to-be-previous) paradigm you must sacrifice a fair bit of convenience to protect your funds. But if you construct your wallet matrix correctly, the hassle is manageable.
Here's the setup Splits uses:
- Fiat currency is stored in a conventional TradFi bank.
- That bank is hooked up to a crypto exchange, which we use to buy or sell ETH as needed.
- From the exchange, ETH is sent to our operating account, a 1-of-5 multisig used by the team.
- Funds go wherever we're doing stuff (which may entail bridging or swapping). Common destinations include testing EOAs, deployer EOAs, contractors, etc. Random negligible revenue flows back to the operating account.
- The bulk of onchain income deposits into our treasury, a 2-of-3 multisig. Funds from this account are transferred to the exchange or the operating account as needed.
Now here's the kicker:
"It's actually worse than it looks — each onchain component is replicated for every network. All in we're talking 20-30 wallets in active use (excluding personal EOAs)" — @abram
The hassle is manageable, sure, but once your team is multichain-first, that management process consumes increasing time and brain power, multiplied by however many people are involved. The benefits are still worth it — enhanced security is essential, of course, hence the three account protocol.
Accounting clarity is also helpful. Using separate wallets for different business functions makes it possible to audit what's going on financially, which is important on a daily basis, and then especially when taxes roll around.
That said, smart accounts can't be ready for primetime soon enough. We know it's cliché to call your own company's upcoming product a game-changer, but man, it’s true. Dogfooding has been a pleasure and it makes the friction of doing things the old way feel extra painful.
Look how comparatively simple the system can be with smart accounts:
Each of those accounts is seamlessly multichain. Game. Changer. To see smart accounts in action, watch Abram connect and use Uniswap and demo the most recent updates.
Stay tuned ✌️