Private-key management startup Torus recently ended a $2 million seed round headed by Multicoin Capital. It was joined by notable investors such as Sixth Horizon, Coinbase Ventures, Accomplice, and Terminal. Binance Labs has also invested $500,000.
Per Multcoin’s Kyle Samani, Torus is addressing “one of the most critical problems slowing the adoption of web3,” which is private- and public-key management.
Blockchains are created at the backbone of public-key cryptography. A set of “keys” displayed as a randomized series of alphanumeric characters enables identifying and authenticating users on a blockchain.
For Bitcoin, the private key allows users to spend any amount of value across the network. It is all-important that users keep secret and protect their private keys or else risk having their money used by someone else.
For simplicity and convenience, some users give up private key management to a larger entity like a crypto exchange. Several of these exchanges, however, have experienced hacks leading to the loss of several million dollars of clients’ funds.
“When we tried to introduce the crypto ecosystem to other friends … we found they were really amazed by the concept of decentralization,” Torus CEO Zhen Yu Yong stated. “But when it came to actually starting to use [decentralized applications] and interacting with the blockchain itself, it was quite a struggle to get them to start.”
“They had to understand a lot of difficult concepts such as public/private keypads. … We just wanted to abstract that all away for new users so they could be left with a simple, secure, as well as, seamless solution,” Yong continued.
Torus delivers key management solutions for individuals where all sensitive data held by the firm are divided across several computer servers, a process called “sharding.” In that way, even in cases of a security breach, no attacker can immediately reconstruct the private keys of users.
Torus also provides users on-ramp integrations “indistinguishable from the login flow for web2 apps,” like Facebook and Google.
Last September, Torus’ developer team received an initial investment from Binance Labs. The startup recently released a beta testnet for Ethereum users and is currently developing tools for other major blockchain platforms such as EOS and Tron.