What is Safe?
Formerly known as Gnosis Safe, which was the successor to the Gnosis Multisig, everyone’s favorite multisignature wallet has rebranded to Safe.
Safe is a configurable smart contract account which aims to solve the issue of private keys being the single point of failure.
A Short History of Safe
Safe was developed in 2017 by the team behind Gnosis, which was at that time a prediction market protocol. It was an attempt to provide a better wallet than what was available in the market back then. At that time, the Ethereum Foundation had developed its own multisig wallet, whose first implementation was written by Gavin Wood. However, the wallet only allowed for multisig transactions for transactions sending ETH from one address to another. There was no multisig functionality for ERC20 token transfers and smart contract execution. And so, Gnosis came up with a new wallet that required multi-signatures for everything, known as the Gnosis Multisig Wallet.
In 2019, Gnosis upgraded the Multisig Wallet. New features were added such as address book, transaction comments, improved transaction list, in-app support chat, and mobile app. Most importantly, different kinds of software/ web wallets can now be used as signing keys. The upgraded wallet was rebranded the Gnosis Safe Multisig.
With the recent $100 million raise, led by 1KX and joined by many others, including LongHash Ventures, Gnosis Safe has rebranded to Safe.
As of today, Safe holds ~$40 billion worth of ETH and ERC20 tokens across ~80K Safes, and it has processed >670,000 transactions. Safe has demonstrated tremendous traction and product market fit.
Externally Owned Account vs. Contract Account
To understand what kind of wallet a Safe multisig wallet is, one must understand the difference between an externally owned account (EOA) and contract account.
An EOA is a type of account controlled by the user with private keys. Examples of EOA are software wallets such as Metamask. The disadvantage of EOA is that it is controlled by a single private key, often in the form of a seed phrase. Once the private key is compromised, the user loses his funds. Another disadvantage is that EOA does not allow for multisig authentications, making it unsuitable for more complex use cases like business.
A contract account, on the other hand, is a type of smart contract that can be used to interact with other smart contracts on behalf of the owner. Safe is an example of a contract account with multisig authentication. So what else can a Safe do that an EOA cannot?
Safe’s Features
Multisig authentication and custody is just the tip of the iceberg for Safe.
Users can also use Safe to:
The list is non-exhaustive. Users can configure their Safes for whatever needs they require.
A recent favorite feature is transaction simulation. By integrating Tenderly, users can simulate their transactions on Safe before executing them, potentially saving users from paying unnecessary gas fees.
Safe as the Layer 0 for Web3 Asset Management and the Safe Ecosystem
Safe is not just a standalone product. There is a vibrant ecosystem of Safe Apps, which refer to apps building upon Safe’s tech stack. In our podcast with Coinshift cofounder Tarun Gupta, he conceives of Safe as the “Layer 0”, whose smart contract accounts “Layer 1” applications/protocols like Orca, Parcel, and Multis leverage on.
Here is a select list of protocols and applications that leverage Safe.
Orca — DAO tooling
Parcel — Treasury Management
Coinshift — Treasury Management
Multis — Treasury Management
Radicle — DAO tooling
Utopia Labs — DAO tooling
Rabby — Wallet
Dework — DAO tooling
Minerva Wallet — Wallet
Prysm — NFTs
Castle — NFTs
Zodiac — DAO tooling
How LongHash Ventures has been contributing to Safe
To further empower the community, in May 2022, Safe launched the Safe Guardians Program as it seeks to decentralize and become an independent public good and community-owned protocol. LongHash Ventures is honored to have been selected as a Safe Guardian in the Guardians Volume 1 Assemble.
We have always been an avid user and contributor to the SAFE ecosystem. Please listen to our podcast with Stefan George (Gnosis co-founder) to talk about Gnosis Safe and Kei Kreutler (Gnosis Guild) to talk about Zodiac. We also wrote a snapshot of the DAO landscape, highlighting Safe’s fundamental role in the DAO ecosystem.
We look forward to continuing to contribute to the governance and stewardship of Safe.
What the Future Holds for Safe: The Operating System for Web3
Despite its tremendous product market fit and dominant market position, this is only the beginning for Safe. One next step is going as multichain as possible. Safe is already on the major EVM networks like Polygon, BNB Chain, and Avalanche and on Ethereum’s Layer 2s like Optimism and Arbitrum. Partnerships will also be key in Safe’s future growth, especially with traditional companies looking to move into the digital assets space.
Safe is well positioned to be the OS for Web3. Safe already allows individual users to directly access dapps such as Aave and Uniswap through the Safe App interface. With a token for value coordination, and the Guardian program to welcome stewardship and permissionless innovation, Safe will accelerate its trajectory of improvement.
Safe does not and will not charge users a fee for the core protocol, remaining as a public good to avoid forks. Meanwhile, SAFE tokens have yet to capture value. Looking forward, there are several opportunities to do so sustainably.
Conclusion
Undoubtedly, Safe is one of, if not the, most critical non-custodial infrastructure for DAOs and companies. As Safe continues to establish itself as the choice du jour for DAOs, crypto companies, and in fact any entity looking to securely store their digital assets, it also becomes a focal point for builders of infrastructure for all forms of digital organizations. We at LongHash Ventures will continue to support this lighthouse which is Safe.
With Safe, the future of Web3 is safu.