The crypto industry appears to agree that the widespread adoption of the technology hinges on its user-friendliness. Decentralized credit protocol Goldfinch has joined the crop of projects seeking to solve the problem with its interactive demo for straightforward self-custodial transactions.
The firm, which has extended credit to a few African companies, partnered with crypto projects — Turnkey, ZeroDev and Coinbase layer-2 solution Base — to create the demo of what it believes is the “future of DeFi UX.”
- DeFi lending is rapidly growing and becoming particularly attractive in developing economies, such as Africa, where centralized credit options are often limited.
- African companies have benefited from loans in the Goldfinch protocol. Some beneficiaries include Cauris Fund, Almavest, Tugende, Quickcheck and Payjoy.
- In a blog post, Goldfinch highlights some challenges that ruin the experience of owning a self-custody wallet.
- Authentication: Before passkeys were introduced, there were limited ways to ensure the person using a wallet was the rightful owner, usually relying on usernames, passwords, or special hardware.
- Signature issues: To perform a transaction on the Ethereum network, you need a private key that matches Ethereum’s rules. Passkeys don’t store private keys, making it impossible to sign Ethereum transactions directly.
- Transaction costs: Even after a transaction is signed, you still need to pay a fee, known as gas, to process it on the Ethereum network. This fee can be substantial during times of high network activity.
The demo as a solution
Goldfinch’s demo addresses these challenges:
- Authentication: Goldfinch uses passkeys, which allow users to easily and securely sign messages, improving user authentication.
- Signature solution: Goldfinch partnered with Turnkey, a company using a secure cloud-based approach to enable passkeys to sign Ethereum transactions, resolving the signature issue.
- Transaction efficiency: Goldfinch collaborated with ZeroDev and Base to make transactions faster and more cost-effective by utilizing account abstraction and layer-two networks.
This demo enhances the user experience by eliminating the need for users to possess a hardware wallet or remember complex security phrases, making cryptocurrency storage simpler and safer.
- Passkey is a new authentication method that replaces traditional passwords, creating a secure connection between a user’s device and a website or app using advanced mathematics.
- A cloud-based secure enclave can store private keys and other sensitive data. This helps to protect the data from being accessed by unauthorized users, even if the cloud provider is compromised.
- Account abstraction simplifies using smart contracts by letting the contract manage cryptocurrency transfers, removing the need for users to handle private keys and transaction details.
Why it matters
- The Crypto@scale podcast recently interviewed Yele Bademosi, founder of Nestcoin, and Will White, COO of WalletCoin, about adopting non-custodial wallets and crypto in Africa.
- They both agreed that a simple and seamless user experience is the key to increasing wallet adoption.