Unmatched security and usability

To use Tokenize.it, a wallet is needed — either as an investor to hold the tokens, or as a founder to control the admin rights of the GmbH Token.

We did not find an external wallet provider that perfectly matched our needs.

This was our challenge:

We have users that not only don’t have a wallet, but also don’t want to be burdened with the responsibility of setting one up and securely managing a key. They want to log in with their email or Google account, and at most use two-factor-authentication (2FA) for security-critical transactions — but that’s it. We also have users that are professional crypto experts, and want to have full control and use their own existing non-custodial wallet.

We have users that store ~200€ worth of Tokens in their wallet, and others that store millions.

In addition, I don’t want Tokenize.it to hold any keys. I don’t want to be a custodian as there are others that specialize in this. Furthermore, I don’t want to have to rely on any single external service provider or company and thus risk having a single point of failure.
Furthermore, we can not rely on users to keep any of their authentication methods safe. They will lose login credentials, devices, passwords, keys and need a way to recover their accounts through pure ID verification.

The question was simple: Is there a way to build wallet infrastructure that fulfills all the needs of all those different groups?

Yes, there is, and this is exactly what we have built over the last months with the help of some of the best names in the business: Gnosis SAFE, Tangany and Privy.

The core of the wallet

At its core, the new Tokenize.it wallet is a Gnosis SAFE Multi Signature Wallet (MultiSig). The industry standard for high-security wallets, trusted with $100B+ in assets under management. We deploy one for each user, and we cover the costs! As a default, it will be a 2 out of 2 MutliSig plus a recovery key. This means there are 2 signers, and both are needed to sign transactions.

Signer 1:

Every users gets an embedded wallet from our partner Privy:

This allows non-crypto users to simply log in using their email (they will receive a one-time-password instead of choosing a password — much better) or their Google account. Sophisticated users can log in using their own external wallet.

In the backend, an embedded non-custodial wallet is generated by Privy.

For details I can highly recommend this section of their documentation: https://docs.privy.io/guide/security/#key-management

We call this wallet the Log-in-wallet.

This is an embedded non-custodial wallet controlled by the user. It also works cross-devices and ensures smooth usability on every platform.

Signer 2:

The second signer needed is a key that is held by Tangany, a fully licensed crypto custodian based out of Munich.

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Their BaFin license requires them to adhere to the highest security standards, as well as having clear plans for all eventualities, such as wind-downs or other unlikely scenarios.

We additionally protect the usage of this key by requiring two-factor-authentication (2FA) from the users through an authenticator app generating a one-time password. Without successful 2FA, this key will not be touched.

Recovery Key:

To ensure security in case one of those 2 keys, or access to authentication credentials, gets lost for whatever reason, the Gnosis SAFE MultiSig comes with a very important feature: recovery through a non-signing key. More details can be found here:

In summary, this key can not sign transactions for the SAFE and has no access to the assets or permission held by the SAFE, but it can propose to replace its signing keys with new keys. This proposal can be vetoed by the existing signer keys during a 28-day time period. This means if one of the signing keys is lost, this key can be replaced after 28 days by using the recovery key.
In case the recovery key gets into the wrong hands, a proposal to change keys can be vetoed against by the two existing signing keys. Therefore no access to the funds would be possible.

This key is held by a specialized third party in an extremely secure cold wallet setup, and can only be accessed through proper identification from various parties in a cumbersome but very secure process.

Security against theft

This setup creates an extremely secure wallet for all of our users. In order to get access to it, an attacker would need to have either access to both keys, the non-custodial Privy key which itself is also a 2-out-of-2 multisig, as well as the key held by Tangany. Getting access to only one of the 3 keys (including the recovery key), will not grant the attacker access. The only exception would be, if an attacker got access to the highly secured recovery key AND the legitimate access to one of the signer keys got lost so vetoing would not be possible — an extremely unlikely scenario. Even in this unlikely case there would be a 28-day time period that can be used for several actions, including moving the existing GmbH Tokens to other wallets.

Safety against loss of keys

In case the user is losing access to the Privy wallet, and Privy can not recover it (as long as the user’s chosen authentication method is still working, recovery is always possible), or in the extremely unlikely case that Tangany will lose access to their key, the recovery key can be used to recover access to the wallet.

In case the recovery key gets lost, the 2 signing keys can assign recovery rights to a new key.

There is no single point of failure in this wallet configuration as the loss of any single key can be recovered from — even the loss of both signing keys simultaneously.

Forward compatibility and professional crypto users

Since the Gnosis SAFE is the core of the wallet, sophisticated users can adapt the wallet to their needs and add additional signing keys, recovery keys, or even replace existing keys with their own in order to get full control to their wallet without any third-party involvement.

All those changes do not change the address of the wallet, thus, all assets and admin rights stay where they are.

Usability

A non-crypto user can simply log in using their email or their Google account, and use a standard 2FA application such as Google Authenticator to securely use the platform and store their Token, or to safeguard their token admin rights as founder. This is Web2 usability, and Web3 security at its best!

A sophisticated crypto user can adapt the wallet to their needs, and gets a great base configuration to start with.

Summary

We believe that this wallet configuration, available for all users of the Tokenize.it platform including founders and investors alike, has the security to store millions of Euros worth of tokens, controlling the admin rights of the token as a founder, as well as having the usability that allows for absolutely everyone to easily invest in a company. A great milestone toward our vision of enabling everyone to become a co-owner of a company.

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