Seed Phrases vs Key Sharding: Multisig's UX Trade-offs

My argument would be 90% of the world can and will adopt that. 10% of the world or less will ever actually properly use seed phrases and hardware wallets, and what matters to me is the optionality.

Hi, everyone. Welcome back to Stephan Livera Podcast. So today, joining me is Setzeus from Cofund, and we are, you know, obviously, there's been a lot of conversation around Bitcoin self-custody in the industry, and I thought, there was some interesting stuff that the guys are doing over at Cofund, and just kind of research as well, and product design around what self-custody and multisig looks like. So, yeah, Setzeus, first off, welcome to the show.

Hey. Hello, hello. Thank you, thank you for having me. It's, it's, it's definitely very, not, you know, it's a very, humbling feeling to be here. It feels like I've, you know, heard so many, if not episodes, just clips of this podcast. And it's someone who's been around for, you know, a long, long time in this space now. there's a lot of names that, that I recognize that have come through here, right? So, first off, super thank you for having me. It's been a while since, since I've been sort of building quietly in this space. And yeah, we're, we're doing some really, really cool, interesting multisig stuff. To give you some background about myself, my name is, you know, Setzeus, or, or, you know, Jesus Najera by, if you know me, IRL. And I mainly run SetDev, which is a Bitcoin, Bitcoin L2, and metaprotocol engineering and security shop. So, helped build a lot of the L2 protocols. Stacks is by far probably my biggest, my biggest client and, and probably the community that, I would say helped me start out my career more in like the Bitcoin L2 space than anything else. And since then, started working on other L2s, started doing work in Bitcoin as well. BitScript.app is probably the, the Bitcoin work that I'm most known for, and that is a script IDE and, big, and transaction deserializer that was browser-based. Also, I also ended up buying BitcoinYield.com and I own, I own that as a media arm along with Jake Blockchain, who I'm not sure if you guys have, have connected together at any

point, but

yeah, all that. Yeah, I've done that, I'm not sure, yeah.

Yeah, all that to be said is my main focus for the last three or four years has actually been around multisig stuff, mainly because I wanted to solve problems for me and my own team, and we've quietly been working on what I think and hope is the best multisig app on the market at the moment. It's basically a, a multisig super app where it's cross-chain, it's multi-vendor, but it doesn't feel like that, right? And I think that's, that's one of probably one of the most interesting points that I'll come back to in this conversation is at heart, I'm, I'm an applied mathematician and like a designer. I love, love, love product. I love cryptography. I love getting in the weeds, but I've been a founder long enough To know that people don't care about the technology, right? They care about what it solves for them. The people that care about the technology is a niche within a niche within a niche. So, Cofund is kind of trying to, trying to cross that chasm between, hey, multisigs are this tool for very niche select group of people to I can onboard my mom and dad into the family vault and we can take care of our Bitcoin.

Gotcha. Yeah. So, the obvious, you know, we're speaking 8th of October and obviously in the recent months, like, there's been so many hacks in Bitcoin, notably the Coldcard thing, the Liquid thing. I mean, how many other, I mean, Bark, the Second guys, they had a thing. I mean, it's just been hacks everywhere. And the, I guess, if I had to summarize where I think, just kind of Where people, people's mindsets are, is they are probably thinking, oh, ETF or custodian, or maybe they need to learn about multisig. And that's probably where a lot of people are at. And to be honest, probably a lot of them are just thinking ETF and custodian. So why don't you make the case, how are you seeing this moment right now in Bitcoin self-custody and security?

Yeah, I, I, I agree with what you're saying, and I actually fully empathize with the people that think and feel that way. And that's what made the Coldcard hack, I would say, so devastating, right? It was Two, two factors. It was A, it was the people who a lot of people in the industry looked up to and thought were sort of the paragon of, of security and of open source and of transparency and of, you know, and of hardened security. And then the other is the people who got hit, which were the people who, as you're saying, cared enough about self-custody. These people like did the research, went out and got the hardware wallet that they thought was like the most hardened because it was built by maxis that were maxis squared. And they're the ones that, that got hacked and robbed. And so, and so that's, that's really what made it so, so devastating and why we're seeing, like we're seeing a shift to multisig. And To answer the question of like, why, like how do you respond to those people? There, there is no, there is no easy answer. I understand people who go into custodians or ETFs. I will say that there is the philosophical reasons, right? Which is like I, I, I principally came into Bitcoin and I am a maxi at least from a monetary standpoint. Because I fundamentally believe in, you know, financial sovereignty, separation from the state and from money and from being able to self-custody and express my self-custody,

etc. So there's a philosophical argument which like, if you don't buy into that, it's kind of hard for me to convince you otherwise, right? The other arguments are a lot more practical and the practical arguments are just not that great, right? It's like, it's cheaper. Yeah, like maybe buy a couple, buy a couple of fees, but negligible in a lot of other trade-offs. And so I would say, I would say

If, if anything, the biggest use case is if you philosophically believe in, in what Bitcoin is doing underneath the hood, it's still worth exercising and figuring out what are the right tools. For anyone, obviously, who is not in the USA or has much more real use cases to self-custody, the arguments are there for, for them, right? Like there are people who need to self-custody, and the Coldcard hack doesn't really change their situations. There are people who were custodying out of enthusiast needs or, or, you know, because they were evangelists and they got, and they got caught, and it's hard to look them in the eye and say, you should continue, you should continue doing this. I will end it with this. It's not all doom and gloom. As someone who has both, like, looked at the math and, and been on the security side of things, cryptography is not broken, folks. Hashing is still hashing, encrypting is still encrypting, digital signatures, at least for now, are still digital signatures. Nothing in the math has been broken. Everything around the math is a lot more vulnerable. And that's what we're seeing with a lot of this AI attacks and the counterattacks and all the different teams is we're basically seeing that that effect of the amount of research it would have taken someone to do the Coldcard hack would have been months before LLMs, and it would have been months without you knowing whether there's a payoff or not.

That's not very good EV for someone's time or, or even like a team's, a team's time. But with AI, it changed very, very quickly. So I'll end it with that. Like, self-custody isn't broken. The math hasn't been broken. Everything around the math is a lot more vulnerable. And this is a, this is a stepwise transform we're seeing in both security and, and pro.

So as you said, cryptography still works. and I, I guess this brings up the question right now, just cause recently, there's a semi-viral tweet going, at least in crypto circles, of Justin Drake. I, I'm, I presume you must have seen it also where he's talking, he's calling for so-called bunker mode. And he's basically saying that, you know, mathematical superintelligence is upon us. And that he says, okay, I'm quoting here, elliptic curves feel especially vulnerable to superintelligence. And, you know, he's trying to say that, you know, he's trying to imply that somehow, you know, everyone should go to Bunker mode now. What do you make of that?

I, I want to take researchers seriously, and I think when it comes to Bitcoiners, I actually empathize and listen to people from other ecosystems a little bit more.

but it's also clear that he's trolling any trolls kind of hard, and so it's kind of really tough to parse what is real and what's, and what's not with him. Like, if you look at his profile, I think the last time I looked, it, it says like Bitcoin researcher or something. Right, even though he's like at

Ethereum Foundation. Yeah,

exactly. He's at, he's at Ethereum Foundation.

but I will say, I think it's, I hope he knows, I'm not sure. One side of me is like, I hope he knows something that, that we don't, because that is an extremely irresponsible tweet to make without knowing something behind the scenes, right? It's possible that he does.

I hope he doesn't, as yeah, like, I hope he doesn't, because obviously then ECDSA would be broken. But as I was saying somewhere else, like, that's only one type of signature, and we have other signatures available. It's like, like the idea, even if ECDSA curves are broken by superintelligence, which like, again, that tweet tells me nothing about what he actually knows, right?

there's still other curves to, to, to build on top of, or sorry, other signature schemes to build on top of. So, I don't know. Let's see. I hope he eventually shows what he does now.

Yeah, let's see. so,

let's go on to Bitcoin security. So as you were talking about, you know, the different You know, products in Bitcoin and, you know, related, security. Let's talk, let's go to that. So where do you see current Bitcoin security products falling down, right? Like there's, there was a lot of talk about multi-vendor, multisig as being one thing, but a common counter argument is, oh, hey, that's really hard. So,

talk to us a bit about that. What do you think Bitcoin security, you know, self-custody advocates should be doing or builders? What should product and builders and developers be doing?

Yeah,

I, yeah, it's, it's tough for me to say, to comment on a lot of these things because obviously my main business has been working with a lot of teams building the ecosystem, et cetera,

versus now I'm putting something into the field, even though I have put many products into the field before. So it's kind of difficult for me to like decouple and not sound, not sound biased.

but I would say the number one thing that Bitcoiners need to do is focus a lot more on, on product and on solving problems than on the technology underneath the hood. I think Bitcoiners tend to get way, way too nerd sniped.

and, and we end up seeing a lot of Bitcoin companies or Bitcoin L2 companies or Bitcoin metaprotocol companies that get funded and fizzle out because like they really didn't have, they weren't solving a problem or building a business. They had a technology or a cool research toy, and then they tried to find a market for it. and again, I just don't think Bitcoin founders are, are very, very good at that.

I see. So you think it's more, it's like not really finding the product market fit, and that's it, finding product market fit can be hard, right? That's why, you know, it's entrepreneur, like there's a high failure rate on businesses, right, to be fair, like in the general world, not even in Bitcoin world. So, you know, that's another thing. And I, I will also point out, right, you know, even though people online talk about multisig and these things, my kind of finger in the air or my kind of estimate or when I talk to people, my sense of how many people actually use multisig for their savings or even for a business use case, it's pretty small, right? There might have been, you know, maybe something like 10 million hardware wallets sold like lifetime. There might be only maybe four or five million unique hardware wallet users. Out of that, let's say four or five million unique users, it might be like 50,000 or 100,000. It might be that number who, who are using multisig.

So we're talking like 1% of the unique user base actually doing multisig. So it's one thing for us to talk multisig online, but actually what are most people storing their coins? Well, if they're self-custodying at all, it's probably on a hardware wallet, maybe with a passphrase. And that's like if you're lucky, you know? That's kind of where most people are. So where, how do you see the path forward given that? Like if you, well, first of all, do you agree with those numbers? And what's the path forward?

Yeah, and it's, I, I, I wanna, there's so many things in what you just said that I could come back to, so, and I hope we do, because there's a lot of things in there that I do wanna loop, loop, back to. So,

yeah, so the first thing is I, I will agree that I think in general Listen, and I, I, I'm not, I don't want to throw shade at any one building multisig wallets or that has, because I'll, I'll put it this way. Like, crypto has always struggled with UX. That has always been the case, right? Since crypto first started, right? And, and, and Ethereum, then Bitcoin, then Ethereum, like we've always struggled with, with UX.

and it took, I would say a decade for just normal wallets to get good enough that normal everyday people could use them. multisigs are fundamentally much more complicated and architecturally way harder to build a good product around. so I will say this, I will say like, Honestly, building a very, very good multisig product with a very, very good UI/UX is extremely challenging, and it's obvious why not a lot of people have, have really done it, right? Again, UI/UX for wallets is just starting to get really solid now after a decade of development. And multisigs, while like the technology is mature and ready and now robust and composable, and there's a lot of flavors and you can find them on, on most chains, there still hasn't been really good products built around them. So it doesn't surprise me that, that the adoption is, is really that low.

but I do want to point out to one of the things that you said, and one of the things I, I'm going to go back to, to like, to me, the best products aren't going to feel like multisigs, and that doesn't matter if it's a multisig for one person, and I think Bitkey. Is one of the first products that is kind of getting there, where like it's a multisig, but like who cares? The person using a Bitkey doesn't, doesn't know, they don't care. Like they, they just know that like their, their hardware wallet works and it's a lot more secure than, than anywhere else. Cool. Like that's, that's the level of product development that I, I want to strive for and that I'm trying to get to with Cofund. and basically what, what we're building on our, on our end. And yeah, I mean, we can talk about seed phrases and self-custody as well. I've had very interesting reflections and, and evolvements on my thought there, building this out.

but yeah, that's, that's, yeah, I'll, I'll, I'll leave it at that and, and curious to hear your thoughts.

I mean, you, you mentioned seed phrases. Let's go into that. So what do you see as the, you know, the, okay, so I guess quick overview for listeners, maybe if they're not as familiar. In the early days, it was just like a key pool in Bitcoin-Qt back in those days. And then When Trezor came out in 2013 and 14 days, the Trezor guys came out with what was called BIP 39, and that was like this standard by which you could have the 12 or 24 words, and they've since gone on to other ideas like SLIP-39 and some other things, but for better or worse, BIP 39 became a standard in the industry, at least hardware wallet wise, and so then it became this game of, oh, you've got to write down your 12 words, make sure you don't put them online, don't take a picture, don't give them to somebody who's trying to phish you or malware or scam you, like that became the game. What is your kind of response to that, or what is your criticism, or how do you view that?

Yeah, I,

one, I think it's funny that That BIP was actually never accepted, but it still got universal standard, which made people...

Right, like not accepted into Core, and yet got, basically became a de facto across many wallets and hardware wallets.

We could branch off that for a while, but let's stick on this part of it.

I think I have a pretty controversial take here, and that is, especially as like a cypherpunk maxi, I actually think self, I think the lowest common denominator or the easiest form of self-custody has already been solved.

It is actually just these services like Privy or Turnkey that take a key, they shamir it across different trusted environments, and no one actually ever owns the key, except when it's generated and ready to sign client side, or like ready to sign client side. Like those services are to me like, that's, that's the lowest form of, of quote unquote, to me that's the definition, that is a good enough definition of self-custody, that I've kind of just realized, you know what, that's the lowest common denominator. I'm completely okay with that, especially after a few stories I could tell you or like things I've learned building out Cofund already.

And what matters to me is, is two things. Like one, like what is your lowest common denominator on, on your app, right? And so to, to me that's now Privy,

what we use for like my, our logging. And I'll tell you this, I can onboard my parents. I've created a family vault with a multisig, or I can put Bitcoin in there. My mom and dad can sign in whenever they want to send it or anything like that. Like we have to, depending on the amount, we have to approve it. Like that to me is like a very good litmus test. And I've, you know, I'm not going to ask my parents to store 12 or 24 words, but they know how to protect their emails or their phones, right? And so I think,

I don't know a lot about Privy or Turnkey. Are these like,

okay, cool,

MPC things? Are they like, are they kind of like a competitor to like, Fireblocks or BitGo or something like that? Or how does it work?

No, I would say, yeah, I would say it's more and closer to MPC thing. do you know what, do you know what, Shamir secret sharing is? Yes.

Yeah, I'm familiar with that. Yeah.

Yeah, it's basically, it's basically that, except the original key is tied to an identifier from an email or a phone number or something like that.

So you log in with your email. And that, that then like fire, that is one part of the key. The rest of the parts of the key are stored like other, like one in Privy or Turnkey, the other one on another third-party server like IPFS or something that's, that's open source.

And then no one actually holds your key, but you can regenerate it with two of the three parts of that key. And so,

Is it like they hold one key or one shard in this context, or how does it work? So they hold one shard and the user holds two shards in the, in the common example, let's say?

They hold one shard, the user, the user's email or login or identifier or like a client holds the other shard. And then, and then like IPFS or like another, like, like an

independent key holder or shard holder is the idea. Okay, but then I guess now, I mean, maybe that is the path forward, right? I'm not like trying to say that's not, or maybe there'll be, you know, or like, like a Bitkey kind of thing. But I guess my, my, the only thing that, one thing you're kind of losing a bit there is like the verifiability aspect of it. Like this idea that you could take those same 12 words and generate that same, you know, master public key, master private key, and you know, like that fingerprint, right? And you can have different devices, but this idea, I guess you lose a bit of this kind of portability, verifiability component of it that you have with BIP 39, because you've got the same 12 words, same 24 words, and you can put that, let's say one device breaks down, you could even, in some cases, import that same 12 or 24 words, ingest it into another, into like another brand hardware wallet, and it can still sign that same thing. So that allows you to do like real multisig on-chain, whereas MPC is kind of like, it's off-chain. Per se, right?

Yeah, it, it is. And, and again, I, I think what matters is the optionality there, right?

But I guess your point would be, you see it as that trade-off is worth it, right? You have a bit less verifiability, you have a bit less portability, but you see it as like, it's a win on the UX front, or how do you see it?

My, my, exactly. My argument would be 90% of the world can and will adopt that. 10% of the world or less will ever actually properly use seed phrases, et cetera, et cetera, and what matters, and hardware wallets, and what matters to me is the optionality. So that's, and Cofund, the lowest common denominator, is Privy, but if you want to sign up with a hardware wallet or import a seed phrase or anything like that, you still can. And I think that's really like the, like the realization I've, I've come to is what is your lowest common denominator? And is the optionality there for you to have what you, what you are saying? Because again, my mom and my dad don't care to verify that their seed phrase can, can correctly derive using certain schemes or, or, or anything like that, right? Like they just want to be able to self-custody or like at least know that their funds are not going to get, are not going to get swiped, right? They actually, they actually lost money during the BlockFi incident, which was, yeah, a heavy, a heavy learning curve.

Yeah. And so I guess That's maybe different angles of where this goes, right? Like there's kind of the Bitkey approach, where the user just never sees the, the seed, and you could argue that that helps them in certain ways, because they're less likely to get phished or malware kind of scammed in that way. No, there's not going to be like, oh, Trezor support, give me your twelve words, that kind of thing. but yeah, as, as we mentioned, like maybe a little bit less verifiable, a little less portable per se, maybe a little bit of somewhat of a vendor lock-in, but the trade-off of that is maybe it's more accessible. Maybe, and you know what, we want, you know, I want more people to use Bitcoin, so, you know, if it lets more people use Bitcoin, you know, okay. but ultimately, I think part of the challenge also is that like, if you're trying to educate people and trying to bring, you know, we're trying to get more adoption, we also, people feel a bit of a worry, and I'll, and I'm, I'm curious to hear how you handle this, because when I talk to some other, you know, public Bitcoiners, some of them feel a bit

what's the word? Reticent or reluctant to even recommend something now. Because of all the stuff that went on, they're kind of worried that, hey, if I recommend you this hardware wallet or this service and something happens, now it looks bad on them, right? And so then there's kind of this challenge on one hand. But on the other hand, we still want adoption, right? We can't just be like, oh, hey, anyone who asks, hey man, I want to secure my Bitcoin. Oh, hey, you're on your own. You're out there. I, and I hope the wolves don't get you. I mean, how do we respond to that?

Let me, let me, before I answer that, I want to go, I want to respond one thing about, what you mentioned about Bitkey. I want to point out that

mechanically, Privy and Bitkey have basically the, the same, the same cryptography. It's basically behind, it's, it's behind the scenes sharing and splitting of keys, one using Shamir, one using a multisig, that the users do not know.

So I would actually question from this conversation be like, what are the differences between those two? Those are actually pretty, pretty much the same. Yeah,

I guess, well, I guess, actually, funnily enough, I had a recent interview with Clay, the lead of Bitkey, and he mentioned in the future that they might be looking at, you know, and I mentioned this kind of concept of the vendor lock, and he mentioned actually that's something they might try to actually allow other vendors into. So in the future, that might be an example where, you know, it could allow like a multi-vendor setup, but still inside the Bitkey system per se, or using a Bitkey as part of your quorum. So maybe that's a bit harder in an MPC context, or I don't know, maybe it isn't. Maybe, but it's just like a different standard and a different method.

Yeah, and maybe, maybe they're going to end up using that exact same, that exact, exact same technology, but.

Possible. I mean, I don't know. I don't claim to know.

But yeah, go on. So in terms of... What do we tell public speakers, et cetera, et cetera? As if you're a Bitcoiner and you're trying to advocate, but at the same time you're worried that some security thing will happen, just like recently, what do you do?

I think there is no easy answer here. And I think my answer is like, man, I'm a masochist for this stuff. I mean, I love this space. I would be in this space regardless. And as much as, again, I'm a founder and I understand I need to build things that sell and that solve problems for people and create value. Like I am fundamentally like a mathematician, cypherpunk, et cetera. And like

there is, I at least am staying in the space because I feel confident in my understanding of the math behind What I put out to the world that, you know, if, if things happen and I'm, I'm sure they probably will, right? I don't know of any team that has not faced any sort of attacks or hacks or, or exploits. And again, I've assisted and played defense for teams that, that have gone through that.

but I also think that's why it's a very interesting period of finding out like who are the tourists and, and who is actually here for, for like the principles as we were talking about earlier, right? Like who, Who, like I hear because you fundamentally value like the sovereignty part and the self-custody part and, and that, even the educational part, which I want to say, I fully agree with you. I actually think probably the most valuable part of seed phrases is actually just learning how things work and learning how you go from a seed phrase to a private key, from a private key to a public key and a public key to a wallet address. Like that's, that is something that everyone that touches Bitcoin should, should know and seed phrases are certainly a good forcing function for that.

Yeah, but I think that's the conversation between, let's say you and I, who we might be more diehard Bitcoiners and we're willing to try and learn these things and maybe a small, you know, a smaller outer layer, a smaller inner layer of people are willing to go to that level. But if you want this thing to actually be money for the world, we're going to have to find ways to reach You know, people who are not diehards, and I guess, I mean, because that's the other thing. Do we just kind of say, hey, look, go to the ETF, go to the custodian? Is that the answer then, if they're not willing to go and learn?

I think, I mean, do I prefer that? No. Do I think that's a better entry point than nothing? Sure.

Right. Yeah, better than nothing, for sure. I think we all agree, yeah.

I mean, you're at least, it at least, hopefully, you'll at least start digging into the properties of what you bought and why.

And I would say, actually, probably most people came into Bitcoin from a speculative standpoint, right? I would, I would actually probably argue that the majority did.

I, yeah, I would say the majority did, and I think that the educational part is going to be always an uphill battle. But I also want to point out that, like, This attitude of we need to convert everyone to be like true, like truly understand what it means to have to be sovereign and to have key self-custody, etc. Like, talk to any normal person just and ask them, you know, what backs your money? Like, can you, can you tell me a little bit about like your, your country's federal or Fed system and how it works? And, and most people actually just like don't care.

I mean, it would be like 0.01% of the population who could even explain that, right?

So why do you expect them to care just because it's digital? I would expect even a smaller subsector to actually care about it, right?

and I would just say that's kind of just, I would say that's the expected power law. That, that doesn't mean that the education effort isn't something that we should continue pursuing. And again, it's someone who like does believe in those principles. I, I will continue pursuing it, right? I've worked on educational tech products like BitScript. As you saw and you noticed, like we, we talked before this, like some of my research or some of my articles are just straight up still just research on, on topics here because I, I fundamentally like a lot of, a lot of the things we do in this space.

but I dropped the attitude of like, I need to evangelize everyone. I'm happy to help ev- I'm happy to help anyone who does, who is open to listening. And like, I hope, I actually host Bitcoin Mondays at, at PubKey on a monthly basis. and like I, I do that. I do like a Bitcoin trivia, I bring in a speaker, and I do like, like Bitcoin fundamental questions around the trivia and, and give out Bitcoin and like, again, I'm a huge, huge fan of that, but I, I don't think that's necessarily needed to get more and more adoption.

Yeah. And look, so I think part of it is just kind of resigning to, look, there'll be a bunch of people, you can't stop them, they're going to go to the ETF, and, you know, so be it. But for the people who do want to self-custody, obviously there's a range of options for now, and that's a good part. let's talk from a Cofund, co-founder perspective. Who do you see then as the target user? Are we talking individuals? Are we talking businesses? Are we talking, you know, who, who is your target there?

Yeah, so, the, the ICP for Cofund right now is anyone that operates in stablecoins, saves in Bitcoin, and values and or has tried multisigs. That is the reason I started building it out basically three-ish years ago is I love multisigs. I use them all the time and I was using them for my businesses. I was invoicing and billing people in, in different currencies and then I was paying my team or having like some of my, like some of my team members make payments,

in like different stables, Bitcoin, etc. And so obviously like managing multiple multisig wallets became an operational nightmare as you can imagine. I had Gnosis Safe, on, on Ethereum. I had, Electrum multisig at one point on Bitcoin.

and so yeah, I would say that that's the, I, the initial ICP.

But it is targeted for groups. It is targeted for, basically targeted for groups of people. so whether it's, right now there is three main segmentations. There are families,

fiduciaries, and founders.

Yep. Okay. And so, sorry, I've just, I've only got about 15, 10 or 15 minutes left. but let's try to cover a bit about how the product works, the policy elements of it. give us kind of like a quick sort of one minute overview, like how does the, you know, what does it look like to use the product?

So the goal is for it to just feel like a modern joint account. You can, you can barely tell there's anything blockchain or multisig underneath the hood. You just know that you can do Basically anything you can do in a normal wallet, from payments to, you know, invoices to payroll to DeFi and yield farming to swapping, buying tokenized equities, etc.

but you're doing it through a wallet that is actually multisig, but doesn't feel like one.

Gotcha. And then is it like a web interface or is it like a, a smartphone app or what's the interface there?

Pure web app, getcofund.com is the URL.

Gotcha. And then, as you mentioned, do you have the choice to use like hardware wallets, but then you can use other things as well? Like what are the possible choices there?

Exactly. So I'll, I'll get into that and then I'll walk you through the policies or what is like really, really unique about us. so. Yeah, what I mentioned, as I mentioned to you, what matters to me is the lowest common denominator. So can our parents or can like, you know, someone that's very, very young use it? And two, the optionality. So yes, our lowest common denominator, Privy if you just want to log in with a phone number or an email, and that's it, no seed phrases ever. Awesome. If you want to log in with an imported seed phrase or hardware wallet, awesome. And they all work together. So, you know, again, you could, you and I could start one with different, with different key signers, no big deal. The unique thing about it, and what took us so long, is,

we have a proprietary cross-chain multisig protocol that basically fits both smart contracts and UTXOs, and UTXO-based chains.

basically a policy is a signer set, a threshold, and a rule. That rule is either a transfer rule, which means that the limit is like some asset and some limit, or it's a dApp rule, which basically says, we, you can now interact with this dApp and there's this upper limit. So for example, if you and I started a company together, for, we can make a policy that is a per diem for lunch, where if we want to spend just $50, it could be a one of two, right? It doesn't require either of us to sign, like just one or the two of us can sign.

And on smart contract side, those policies actually live fully, fully on-chain. on the Bitcoin side, what's interesting is we made a really, really deep pay-to-Taproot vault that uses a script path extensively, where we basically pre-generate, all the potential multisig, signer sets that you are likely to use, and then the user reveals them by creating policies. Again, we abstract all that out from the user, but all that matters is when you go to create a policy, it looks exactly the same whether you click on Bitcoin or USDC. You select, hey, for this, you know, Bitcoin $50, Jesus, and maybe like our, our third employee, they can spend, you know, 50, again, $50, and they create that, it like, it basically unveils or reveals that spending path in the Bitcoin pay-to-Taproot vault. And so what's really unique is, again, there are multisig wallets that some support all EVM, some support just Bitcoin. outside of Casa at this moment, I'm not sure of any other multisig wallet or platform, et cetera, that supports, that is truly, truly cross-chain. so that is a little bit of our, our, about our architecture. And yeah, it took a long, long time to develop it out, to the point that, that it is now. And

so just help me understand. So are you, as Cofund, the business, are you also a cosigner here? Like, do you hold one of the keys or do you literally hold zero of the keys?

Zero. No, no, no, zero. It's completely self, like completely self-custody. You hold, you hold your own keys for everything.

I see. And then the policy rules, as you're saying, are kind of enforced on-chain, either if it's an EVM chain using like smart contracting inside of EVM or in Bitcoin, you kind of have a Taproot script path, but you've set up a lot of possible

leaves in the Taproot that correspond to that kind of spending, I guess. Is that right?

Yeah, no, I want to clear that up. on the smart contract side, both the signer set and the rule is checked on-chain. So again, the signer set would be you and me, two of two. That's checked on-chain in smart contract lands. We're not sending more than $50 USD. That is checked on-chain in smart contract land. In the UTXO one, that signer set of two of two of you and I,

that is checked on-chain. And again, the cool thing is you could have many members and create multiple different of these combinations, right? So we could have five people on our team, but we have Four or five different policies. One that's a 5 of 5, one that's a 2 of 2 with you and I, one that's a 2 of 2 with them two, one that's a 3 of 3 with these three people, and it's all from one pay-to-Taproot vault. So on the pay-to-Taproot vault side, the signer sets are checked on-chain, the amounts are not. Those are checked on-site.

Oh, gotcha, okay, yeah, that's, that's gotcha, yeah, because without covenants, you can't enforce, like...

Thus my interest, thus my interest in, in covenants and why, exactly, and why that's something that I...

So it's kind of like, for now, you're just checking the, if it's a 2 of 3 or a 3 of 5, that part on-chain, but the amount, obviously, Bitcoin on-chain is not going to stop that. whereas on the EVM side, you can code in more, let's say, restrictions around these things. Is that right?

Exactly. Yeah, exactly, exactly. I mean, like the, the client itself won't broadcast the transaction, but it, it's one of those things where it's like, yes, theoretically, totally, like the, like, like that team could broadcast that transaction on another wallet. But again, they're still broadcasting the transaction of the like that they've signed, et cetera, right?

But yeah, so I guess it's, so I guess one maybe slight, let's say fly in the ointment is like if you're the business owner or manager, your employees might actually run and sign something that you did not intend them to, right?

well, again, the policies would have to be activated. And there are, and there's like, there are different roles. There are admins and members. And so those are two different role types. so if someone's just like a member, they actually can't even initiate transactions. They can just review and approve them.

But again, and, and even if you are an admin, you can only initiate transactions that fit the profile of a policy.

Okay. Yeah, just trying to get an idea of that. And then when you need to like rotate a user out or things like this, like I'm sure you must have thought of that. Like let's say you start with five users, but one staff member leaves and now you've got to rotate the key. Like you've just got to move everything or how does it work?

Yeah, so, so that's been probably one of the most, next to seed phrases, one of the most challenging things to handle behind the scenes. Again, when it comes to smart contract land, this is actually fairly simple. Like you, there is a user's helper contract that basically just rotates the key out for that individual or adds an individual or removes the individual to the vault and like the funds aren't swept, they stay there. In Bitcoin land, like you're saying, yes, each one of those actions, adding, removing, or rotating creates a completely new,

like a new quorum, a new set that you've got to spend out of the old set into the new one, right?

Exactly. again, we're handling that UX wise. What do I mean by that? We're trying to see how, we're trying to see how behind the scenes we can do it and, and as well as front the transfer fee, for the user as well.

Gotcha. And just give a quick idea on, for listeners on, what is the rough price range? Like I presume you have different plans. just quick overview on that.

Yeah, so there's a, there's one, I'm still very much in discovery phase for, for pricing. but right now you can sign up for free. Transaction fees are at 1%. If you stay, there's like a 30-day trial.

transaction fees are 1% after the first 30 days. If you stay in the free tier, then it's 150 for like 0.75, then, 900 for 25 bips. and then there's a few enterprises that like refuse to pay any bips and are negotiating custom pricing, which I am also very open to.

Gotcha. Okay. yeah.

I guess I do want to leave you with, with one thing because I can see, I can see where you're towards the end.

Yeah.

I, I want to give my thesis on where multisigs are, are headed, and I will say this is probably the first time I'm saying this like very publicly or, or in a podcast.

I think multisigs are amazing tool, but I think they're a niche for a niche segmentation. What I am really working towards and what I have a vision to do is actually create modern joint accounts.

I think those are, those are structures that people just entirely forgot about because they are so full of friction, so hard to use, and not really that useful. And I think the roadmap for multisig wallets actually converges to modern accounts. So that's... Interesting.

That's an interesting idea. So you're saying like, basically in the Bitcoin world, we can do joint accounts again, and maybe that's actually also going to help on the security side too. So it's an interesting point, for listeners. Yeah, so sorry, we don't have a lot of time to go on. We're going to have to end it here, but, we'll, we'll have to get you back on another time and kind of go more in depth on some of those other, points in your research. So listeners, check out Setzeus from Cofund. The website is getcofund.com. Thanks for joining me.

Thank you so much. And yeah, we'll, we'll, we'll chop it up next time. Appreciate you.