Upstream’s new vault could help NFT holders sleep at night – TechCrunch

Imagine paying millions of dollars for a JPEG of a monkey just to have it stolen from your digital wallet. That’s exactly what happened to actor Seth Green, who ended up begging the hacker (and probably paid them over $100,000) to return the NFT to him.

Green’s predicament is more common than you might think, and it raises the question of how NFT platforms should manage to help their customers get recourse when it happens, if at all. Clamping down on thieves and enforcing property rights is especially difficult in an industry that values ​​decentralization and self-sovereignty as core principles. Still, NFT holders need to feel secure holding the digital assets they buy, Upstream founder and CEO Alex Taub told TechCrunch in an interview.

“Security is really difficult with cryptography. People lose their seed phrase, their export keys, they click on the wrong thing, they sign – that person could pull a lot of stuff… Sometimes you doomscroll when you’re half asleep, and you click on a wrong link, and you’re done,” Taub said.

Upstream, which recently raised a $12.5 million Series A round in March, refers to itself as a complete no-code platform for creating DAOs (Decentralized Autonomous Organizations). Now, the startup has leveraged its CAD tooling know-how to launch a new product Taub says it will improve security for NFT holders, called the “Vault DAO.

A screenshot of the DAO Upstream Vault home page interface. Picture credits: Upstream

Before we get into how a Vault DAO works, it’s worth considering why Taub may have felt the need to create a new solution. Security is by no means a new problem in cryptography, but existing solutions, especially for individuals, are limited.

Hardware wallets, for example, offer a secure option for users to store their wallet’s private keys on what is essentially a hard drive, but these “cold” wallets aren’t exactly known for being user-friendly. Additionally, Taub noted, one might as well misplace a hardware wallet as they might lose the seed phrase that allows them to access their crypto. “Hot” wallets, which are connected to the internet, are another solution, but Taub said he won’t deposit any assets of value there, as most solutions for NFTs are custodians or operated by a centralized entity. Additionally, Taub said he was concerned that assets in a hot wallet could get lost in the mix of connectivity issues.

The Vault DAO, Upstream’s solution, functions as a multi-signature wallet that can be configured to require the signature of multiple discrete accounts to authorize a transaction on behalf of a user. A user can set up multiple accounts directly through Upstream and can choose a threshold for the number of signers needed to run a given type of proposal, Taub explained.

A screenshot of Alex Taub's Vault DAO

A screenshot of the multiple signers associated with Taub’s own Vault DAO. Picture credits: Upstream

For example, a user could require three signers to approve any transfer of assets from a specific wallet, and those three signers could either be all accounts managed by the user or include accounts delegated by the user to a trusted friend. Mechanically, the product functions like a user’s personal DAO, as each transaction takes place as a proposal made by the user, voted on by a pre-determined critical mass of DAO members and then executed as such.

It’s basically similar to Gnosis Safe, a popular multisig wallet suitable for organizations, but Taub says the Vault DAO is much more design-friendly. Unlike the most popular multisig wallet products on the market today, Taub added, Vault DAO is specifically designed for individual users to secure their own assets rather than groups that require multiple parties to sign a transaction.

In terms of where assets are actually held, the Vault DAO product connects to major existing wallets, including MetaMask and Rainbow, as well as the WalletConnect protocol, allowing users to link assets held in “cold” storage. to their Vault DAO, Taub said.

Upstream website currently allows users to sign up to request early access to the product, though Taub didn’t share any details on the timeline for its public launch.

Taub described Upstream’s platform as two-sided – one side is a “Shopify for DAOs” that helps people set up groups and the other side helps people manage their DAOs through an experience. easily navigable frontal.

“At the end of the day, we don’t own your NFTs, we don’t own your crypto. It is in this multi-signature wallet that you have full access,” Taub said. “That’s how I sort of see it – not only do I feel comfortable protecting myself from clicking on a link and losing all my stuff, but I also feel comfortable because I still own my stuff.”