By Anandamoy Roychowdhary, Sidhant Goyal, and Augustus Ilag
Today is an important milestone in the journey of our portfolio company, Web3Auth.
Four years ago, Zhen Yu Yong, Leonard Tan, and their team set out to create novel technology to solve one of the most pressing challenges in the web3 ecosystem. The current standard of using seed phrases to manage crypto wallet keys is infamous for being a terrible user experience and has contributed to the loss of more than 20% of all bitcoin in circulation. Web3Auth has developed an elegant solution to this problem by marrying non-custodial key management with passwordless authentication, creating a secure authentication protocol that is seamless for the user, for whom the experience is akin to a web2 social login. Web3Auth is, in a nutshell, the simplest and most secure authentication suite for web3 wallets and applications. To date, it has secured more than 9 million users globally, gained over 500 active clients, and forged deep partnerships with leading chains such as Solana and Ethereum.
At the heart of Web3Auth is the Torus network, an open-source, multi-party computation (MPC) key management network that splits and secures user keys. The Torus network is composed of validator nodes that operate key protocols that power Web3Auth’s SDKs. These validator nodes generate cryptographic keys for each new user via a protocol called Distributed Key Generation (DKG) and collectively validate each social login attempt by reconstructing the user’s private key from a series of shards. More on this in a previous post.
Until today, the Torus network was a permissioned network consisting of nine nodes run by some of the most trusted companies and projects in crypto, including Binance, Polygon, and Ethereum Name Service. Today marks its natural evolution to a permissionless network, now known as the Auth Network, where individuals and institutions across the world can participate as a Network Guardian (validator node) to generate keys and authenticate user logins. The Auth Network also announced the introduction of the AUTH token to incentivize the activity of its Network Guardians, which will be available for trading after the upcoming initial coin offering.
The Auth Network is a first-of-its-kind decentralized authentication infrastructure that empowers any entity across the globe with spare computing power at its disposal to participate in onboarding and authenticating the next wave of web3 users and be fairly rewarded for their contribution. In a web2 paradigm, the authenticating entity and the single source of truth is typically a centralized institution: consolidating power, profit, and control in the hands of a few large companies dominant in the market. The Auth Network is designed to distribute said power, profit, control, and governance into the hands of thousands of global actors who preserve the state of the network and ensure the integrity of the key base and is much more in keeping with the ethos of the initial internet design principles. It allows for all actors who have a staked interest in the authentication framework to contribute towards it, in the process creating a trusted global authentication network advocated by millions of developers and users. More tactically, decentralization also boosts the network’s performance and scalability: reducing login load times from seconds to milliseconds by optimizing for geo-latency and local data availability, and enabling it to scale to serve billions of users instead of a few hundred million.
We at Sequoia India are firm believers in the potential of decentralized infrastructure. Web3 opens up the possibility of an internet that is transparent, accessible, efficient, and resistant to arbitrary censorship and surveillance. Decentralized web3 infrastructure levels the playing field by enabling a vast new swathe of the global population to participate in key facets of the network’s economy and be justly rewarded for shared resources. It is a great equalizer, with the potential to break the hegemony of centralized infrastructure giants where security, trust, and data rights are secondary considerations.
We are proud to be long-term partners to Web3Auth, and the Auth Network, which has taken a definitive step towards true decentralization. We look forward to the initial coin offering for the AUTH token and welcome the community’s participation to help create web3’s default authentication protocol – and an enduring technology.