Ouriel Ohayon shared his thoughts on crowded wallets space, ZenGo backstory and what it takes for DeFi to grow up.
Hello! What’s your background, and what are you working on?
I am Ouriel Ohayon, CEO, and co-founder of ZenGo, I am a long time internet entrepreneur and VC investor. I was even an early high profile blogger once (TechCrunch in the early days). I am a consumer guy. I love exquisite products that bring delight and reach millions of people.
We build ZenGo, a new generation of crypto wallet for storing, buying, earning, and investing any kind of crypto assets and financial products all from your mobile. It is built for allowing anyone who wants to invest in crypto productively and efficiently but without worrying about the complexities of that world. Those are not just words. We obsess about simplicity and delightful user experience (we even call DeFi, DElightful FInance)
Behind the scenes, we are building an important cryptographic stack based on MPC (multi-party computation) backed by heavy security research and academic work to power this “simple” service.
What’s ZenGo backstory?
When I was discovering crypto, I wanted to try everything. I played with every single wallet - mobile, desktop, hardware - and could not imagine a future where crypto matters, and we would use something even remotely close to what was existing as (that is three years ago). I wanted a solution that did not exist: significantly more straightforward, highly reliable, fast, versatile, and mobile-first. But the bad news is that there was no good tech stack to solve that lack of good user experience properly, because it would always take us back to managing a private key and complex passwords. Key management was not solved.
ZenGo is the only keyless crypto wallet that does not rely on private keys or even passwords. We spent a year before creating the company building the technology based on Multi-Party-computation, which would allow us to create a wallet with no seed, with no private key, and make the modern user experience with 3FA authentication and no password. Once we had a valid proof of concept and tested the approach on a few users and observed a “a-ha” moment, we understood we had a chance to crack this very crowded market. Simplicity and convenience should never be underestimated.
We have created the company over a year ago and got backed by great investors like Benson Oak (AVG security), Samsung Next, and a few more. We also got an innovation grant from the Israel Innovation Agency as well as research grants from Tezos and a few other blockchain projects. We have the necessary resources to deliver on our mission to build the best crypto
We are a small team but with a unique mix of skills: deep cryptography and large scale system security and engineering, consumer product, and marketing. This allows us to build a unique blend of security and elegant product.
ZenGo’s mission is important: we want to enable anyone to have financial (super)-power and independence. This is what drives us to build a product that will service a large number of users anywhere in the world, in particular in regions where access to financial services is non-existent or impossible. When you see the economic turmoil, we are facing you understand this is more than ever critical
What went into building the ZenGo?
We worked a year on building and experimenting with the MPC cryptographic stack, and the very first MVP, which I must confess, was a total disaster of user experience and slow. But it had this unique sparkle to allow a crypto transaction without requiring a private key, and that was magical. It took us another nine months to build our first beta on iOS and bring a decent first basic service that would send, receive BTC and ETH with a simple three steps onboarding process and no tedious phase to set up a seed backup or a complex scheme to ask your friends for a backup
A few months later, ZenGo was available on iOS, Android, with the ability to buy, earn, stake tens of assets, and is dearly loved by its customers.
When we first started, the wallet space was already crowded, but it got even more insane as time went by. However, to this day, very few if none are focused on simplicity and convenience, and this is where we want to shine. We made some very radical choices at the beginning and stick to first principles: human design guidelines, no password, speed, always-on customer center present at 1-tap on any screen. We are aware that our wallet does not have all the bells and whistles found elsewhere, but we focus on shipping crisp features every time and prefer less to do more.
Security is paramount, but it goes hand in hand with user experience. Security is user experience, and user experience is security. There is no distinction at ZenGo. It starts with the absence of a private key. The security is distributed between the phone and our servers, but the server cannot be a liability in a sense it can never spend. We made all our cryptography open source from day 1. It has been audited and peer-reviewed multiple times. We also ran numerous penetration tests on our mobile apps. We also build a world first: the guaranteed access to funds in case ZenGo stops operating for any reason. Since ZenGo co-signs it was critical, we would not become a liability in locking our own customers. Again the code here is open source on Github.
We cannot underestimate how intimidating current solutions on the market are. Most of the world cannot deal with this level of complexity. They need familiarity and have no time for complicated explanations and concepts. Sure current solutions fit well a particular audience and will thrive, but we believe a new color is required for the industry to reach new audiences. It is not just the technical complexity but the design complexity and the language. People will not download 30 wallets for each blockchain. They will want to own very few that can deal with most of what they need, ideally, a remote control for all their needs. We build that remote control with ZenGo.
We are working with a set of great technical advisors on cryptography research like Claudio Orlandi and Ittay Eyal, who are renowned researchers. We work with many researchers around the world. KZen (our company) runs a very active telegram group of 400+ researchers on MPC/Threshold signature.
What’s your business model?
We launched less than a year ago. We are already making revenues and growing fast, but this not our priority. We are focused on engagement, satisfaction, and growth and, more importantly, shipping an outstanding product people love to use.
It is not hard to imagine all the ways we will make money if people trust us with their funds to make investments. We are like a bank but without the custody and compliance burden. We do not reveal all the ways yet. We will make money, but we have a pretty clear idea of how this will happen and when.
Believe it or not, our main competitors are not other wallets but centralized exchanges that still are by far the first destination to custody and invest in crypto and, in a way banks and trading services which offer alternative products to invest and are clearly top of mind when it comes to investment. Our bet is that we can build a significantly better alternative with only digital assets providing control to users.
What’s your position on the regulatory landscape today?
We are not happy with the status quo. Although we are less directly concerned by it because we are not custodial and by design not considered a money transmitter. There should be more precise regulations on KYC and AML in particular for small transactions, there should tax safe harbors for low spends, and we believe crypto to crypto trading should be exempt from taxes as it is the case already in France.
More importantly, crypto cannot grow if banks are hostile to the industry. We need more bridges with traditional finance so that entrepreneurs can build, and investors can invest. Banks need to accept crypto as an industry, and the regulator can help.
What are your goals for the future?
Build up the stack of financial services integrated into ZenGo in particular financial services and Dapps. A year from now, ZenGo will have all the core financial primitives you need to invest in the space, including a world-class fiat bridge (buy, sell) and all sorts of ways to trade. We are also building major security and safety innovations that will position ZenGo as one of the safest options in the market.
We are also deeply integrating with some of the most prominent services to provide a seamless user experience both in and outside of ZenGo.
We enjoy a powerful word of mouth, but marketing is challenging because all the traditional advertising routes (Facebook, Twitter) are closed to crypto, and Apple and Google are not embracing this space yet. For example, it is impossible to be a featured app on the App Store (yet). So you need to be more creative on how to find users, and this is unprecedented in Fintech and mobile.
So we are experimenting with new ways to get big quickly.
What are your future thoughts for the DeFi market?
DeFi is a super exciting space but still feels like a dangerously complicated lab. We are building on top of DeFi protocols, but we think this space could be more “decentralized” and safer. The most popular computing platform is by far mobile, and this is where the future of finance will happen, not in a building in Wall Street (well, at least not just there).
DeFi feels still very fragmented. DeFi happens and will happen on many chains. It will not be just about ETH. It is already the case. A remote control for assets and Defi will be required, simplifying and bringing homogeneity and clarity to the space.
DeFi needs to be safer: we saw it with the recent market manipulation attacks. But there are other systemic risks. To grow and scale, DeFi will need to be more decentralized but also offer more guarantees and protection: call it insurance. They are experiments, but they are not mature enough, and more can be done to give confidence to investors.
Finally, I think the industry should have less animosity between developers. This is not healthy. We see too many aggressions and toxic behaviors that could profoundly and negatively affect the industry in particular to outside observers willing to jump in. The space needs to “grow.”