Tagged

On a roll: Making Ethereum accessible to all

Solving gas with Layer 2; doubling down on security for Layer 1

Itamar Lesuisse
Mar 11, 2021

We're working on one of our most ambitious and exciting undertakings since we started Argent three years ago. We're bringing Layer 2 to Argent. And making our Layer 1 wallet even more secure and powerful.

Our aim for Layer 2 (L2) is to make the magic of crypto accessible to all. Without compromising on the core principles that make Ethereum so special.

Our upgraded Layer 1 (L1) wallet will be the default choice for advanced users with the most rigorous security requirements. For those needing to protect $50K-$1m plus while enjoying easy access to DeFi.

This post provides a high level outline of our L1 and L2 plans. It explains that we'll first release our upgraded L1 wallet. Then, this summer, we'll launch an L2 wallet that harnesses zk rollups. For each launch we'll share lots more information closer to the time.

The result of both will be a big step towards a world where your wallet is "the future digital you". Assets and identity. Cash App and Robinhood meet Google login. But owned by you. And accessible to all.


Before starting, a quick note on terminology. L1 means the Ethereum blockchain as it is today. L2 refers to scalability solutions where activity occurring off-chain is verified (i.e. settled) on-chain).


The role of Layer 1

Demand for Ethereum-based projects has come at a cost. Gas has priced a mainstream audience out of Layer 1.

This is an issue we care deeply about. Our mission is to empower everyone to control and benefit from their digital assets and identity – regardless of budget.

We're therefore designing our L2 wallet so that people can join it without ever touching L1.

We still see a critical role for L1 though. It will be:

  • The settlement layer for DeFi and L2 rollups.
  • The self custody guarantee for L2. In our case, we'll provide all L2 users with a counterfactual L1 wallet (i.e. a wallet that they control but which isn't deployed until they need it). Should L2 go down, or we get abducted by aliens, users can always deploy their L1 wallet to exit the L2 and recover their funds.
  • The place where most liquidity remains.
  • Where some major protocols live.
  • The foundation for censorship-resistance.

These factors mean that the most advanced users will still interact with L1 directly. For this group, we're doubling down on the security and usability of our L1 wallet.

The most secure wallet

We firmly believe that smart wallets offer superior security to any other wallet, including hardware wallets.

A hardware wallet alone is a single point of failure. It requires a seed phrase that's prone to loss or theft. Even experts find it hard to check what data they're signing (as this $8m hack proved). You can't automatically block transfers to untrusted addresses. Dapp integrations aren't protected by a hardware wallet's security model. The device could be tampered with along the supply chain. The list goes on.

Vitalik recently echoed this, saying that smart contract wallets with social recovery were his "preferred method for securing" crypto. The growing number of people with $1m plus in their Argent wallet shows this view is quickly gaining traction.

I'll soon share more on our upcoming release of this ultra-secure wallet. All existing Argent users will be able to upgrade to it. In addition to the security benefits we'll continue to natively integrate the best DeFi projects while constantly refining the WalletConnect experience.

The advanced security features of the L1 wallet won't be needed by everyone though. For a wider audience, our L2 offering will be the better fit.

Our approach to L2

After several years of development, L2 is nearly ready for prime time.

We're leveraging it to build a new type of account in Argent. One that lets people enjoy Ethereum at super fast speeds and very low cost. All the while with strong security and no seed phrase.

To build this - and build it now - we've extensively assessed which L2 would best fit our needs. We've chosen a particular path to start our journey, but believe in a future where many L2s will co-exist, with some being better suited for certain use cases. There are also teams building protocols to enable seamless transfers between L2s.

In short, we'll likely support several L2s over time (either through native integrations or WalletConnect).

For now though, we've started with zk rollups. The reasons for this stem from why we founded Argent.

Criteria 1: Maintain Ethereum L1's finality and security

We believe in Ethereum's potential to become the foundation of a global, decentralized financial system. One that enables new types of ownership. This means that finality and security are of the utmost importance. They're two points we won't compromise on.

Finality gives people certainty, which in turn enables real ownership (you can have confidence that the assets you just acquired are yours; the transaction won't be undone at a later date). The need for security goes without saying.

This led us to focus on rollups, which "move computation (and state storage) off-chain, but keep some transaction data on-chain".

Why rollups?

Other L1 chains, such as Solana, or sidechains, such as Polygon (Matic) and xDai, introduce new assumptions on security and decentralization. These assumptions haven't been battle-tested yet. So while they might make sense for certain use cases, they don't for those where finality and security are the priority.

We enthusiastically support Vitalik's view that rollups "are poised to be the key scalability solution for Ethereum for the foreseeable future".

Criteria 2: Open and permissionless

The legacy financial system won't be able to compete with an open, permissionless platform for the same reason that closed networks couldn't compete with the web. The need for openness also narrowed down the options.

We excluded Loopring as only Loopring can create new circuits on their rollups. There were also no indications that they'll launch a general purpose language to build on top of Loopring.

We looked into Starkware closely. They're working on their very promising Cairo language. When we started working on L2, Starkware didn't yet have a clear path to becoming an open, permissionless L2. They've since introduced their plans for Starknet and we're excited to keep tracking its further development.

This left Optimism, Arbitrum and zkSync as the clear remaining options. They're not fully open yet but when we started they had the clearest path to make their rollups open and permissionless.

Starting with zkSync

Without diving too deeply into the pros and cons of each technology, we decided to focus first on zkSync for this phase.

We're fans of the Optimism team and will monitor their progress with great interest. Our choice came down to the fact that zkSync has been live on mainnet for months, has lower transaction costs and fast finality. ZkSync also does not have a one week delay on withdrawals, although we know the Optimism team is working on this. The withdrawal period is also found with Arbitrum, so we'll keep an eye on their progress too.

The main downside of zk rollups at the moment is the lack of a full, general purpose language. This hasn't however prevented us from being able to build the key features we need for a first version of our L2 wallet. And we're confident that Zinc, their general purpose language, will evolve fast enough to enable new protocols on zkSync.

This leads us to what exactly we're building for our launch.

The scope for our L2 launch

Our L2 wallet will start with the most important use cases for a mass audience. These use cases will expand as L2 becomes more interoperable in the months ahead.

Our L2 wallet will start with:

  1. Onboarding directly to L2. We can massively reduce the cost of onboarding by not needing a single L1 transaction. This breaks down barriers to crypto.
  2. Trading key tokens. This can start with as little as 5 pairs and grow over time. We'll start with a few market makers and then integrate an AMM once available on zkSync.
  3. Earning yield on Eth and Stablecoins. Last year we suggested to Starkware the idea of pooling DeFi liquidity from L1 into L2. This will enable us to bring L1 DeFi protocols straight to L2. We'll start with a limited number and add more over time. Starkware wrote a post on this DeFi pooling idea.
  4. Buying crypto with fiat currency directly in L2. We'll work with Ramp to make this possible from launch. We're also confident a wider range of onramps and exchanges will soon add onramps to L2.
  5. Transferring crypto from any exchange or L1 wallet directly to your L2 wallet. Until exchanges support zkSync and other L2, we'll be making this transition seamless with a bridge to get your funds straight to L2 with a simple transfer (but with a gas cost involved). It will work with ETH and ERC20 from any exchange or wallet.
  6. Self-custody and censorship resistance - without a seed phrase: We'll give everyone a counterfactual L1 wallet.

Final thoughts

What does all this mean? Whether you've got $100 or $1m, Argent will have something for you. We can combine usability and security to ensure that self-custody is the standard.

The thread below captures the almost limitless potential of a self-custody wallet.

Fred Ehrsam tweets:

This matters because the last few years have shown that software really will eat the world - but that monopolies are hungrier than most. Crypto gives us a unique opportunity to change course. To put people first. To embrace a world of equal economic opportunity. To align value capture and value creation on platforms. And to catalyse innovation with communities, not corporates.

Own it.

And stay tuned for our upcoming announcements. In the meantime you can download Argent here.


If you have any questions you can find us at:

Own It

We use 🍪 cookies to personalise your experience on Argent. Learn more

Accept

HQ London, made with ❤️ across Europe