Cryptocurrency Custody Company Qredo Raises $11 Million in Funding, Celsius and Others

Cryptocurrency custodian Qredo has just raised an $11 million seed round from Celsius, Wintermute, Deribit and numerous blockchain capital fund backers

Cryptocurrency Custody Company Qredo Raises  Million in Funding, Celsius and Others

The gist.

A company looking to decentralize cryptocurrency escrow rights has just raised $11 million.

Its backers include blockchain funds as well as companies that could use the technology, such as Celsius

The company still has a long way to go before it is fully decentralized.

If someone steals your private key or cracks your cryptocurrency exchange password, then your property is someone else’s property. Anthony Foy, CEO of London-based Qredo, said this ever-present threat prevents institutional investors from making large investments in cryptocurrencies.

“The existing custody model is fundamentally broken. Institutions must choose from retail wallet solutions, vulnerable centralized databases or cold storage devices, often managed by multiple employees. These solutions don’t fit.” Foy told Decrypt.

He said his company has created a technology that can provide large investors with confidence that they can move deeper into the cryptocurrency space.

To that end, the company just secured an $11 million seed round from Celsius, Wintermute, Deribit and a host of blockchain capital fund backers. More than half of the investment came from companies that will use the technology, he said.

Qredo offers a decentralized version of MPC, and companies like Fidelity-backed Fireblocks make the technology available to institutional investors to help them conduct large-scale crypto transactions.

MPC stands for Multiparty Computation. The basic premise is that people who use MPC to protect their money don’t have to worry about private keys or exchange passwords, because MPC handles all of this on their behalf. Think of it as the LastPass of cryptocurrencies.

By decentralizing custody and using MPC for protection, it allows investors to trade crypto between different exchanges without having to constantly log in or go through a complicated back-end system. They can quickly make more complex trades so they can respond to market changes.

Foy said.

“Pioneers who invest in digital assets are constantly bogged down by the need to protect their private keys, thus preventing them from acting as nimbly as individuals and finding lucrative revenue opportunities in DeFi.”
With this technology, Fireblock has exceeded $30 billion in trading volume. But in some ways, Foy says, Qredo has a competitive advantage.

First, Qredo wants to decentralize the whole thing. Fireblock’s MPC technology is currently centralized, according to industry standards. In contrast, Qredo’s MPC nodes are distributed across a decentralized network, and the protocol will eventually be controlled by a DAO or decentralized autonomous organization. The verifier community oversees the operation.

Next, Qredo lets people transact across the blockchain without having to go through encapsulated assets (such as encapsulated bitcoin (WBTC), a synthetic, ethereum-based version of bitcoin that is tied to bitcoin). This reduces complexity and avoids the risk that encapsulating bitcoin could one day descend into chaos, Foy said.

He said.

“So without creating any other vulnerabilities or operational complexity on the asset, you and I can swap out bitcoin for ethereum without putting it into a smart contract.”
Qredo also does all of this on Layer 2, which effectively means processing transactions on 32 nodes in four data centers spread across the globe. This reduces some of the huge transaction fees that currently plague cryptocurrencies, but at the expense of some decentralization (at least for now).

Foy told Decrypt.

“Getting into a fully decentralized network can be a very unthinkable interference exercise, so we took all precautions because we thought there would be a lot of money running through that network.”

Posted by:CoinYuppie,Reprinted with attribution to:
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