My guest today is Henri Stern, CEO of Privy. Privy is an authentication and embedded wallet SDK. With Privy, dapp developers can allow their users to sign in with their existing wallet, or generate an embedded wallet associated with an email, SMS, or SSO provider such as AppleID or Gmail.
Privy's embedded wallet powers friend.tech, the breakout social dapp launched in August 2023. With Privy, friend.tech generates a new embedded wallet for each user that signs in, allowing the PWA dapp to sign transactions at the click of an HTML button element — no WalletConnect back-and-forth required.
Privy's 2/3 Shamir wallet option allows dapp developers to create self-custody wallets for their users, while Privy provides a password-protected recovery services in case users should lose access to their account or device.
On this episode we discuss Henri's experience studying under Dan Boneh, working on Filecoin at Protocol Labs with Juan Benet, and building Privy. We explore the ins-and-outs of Privy's embedded wallet architecture and discuss what's next in wallets.
It was a pleasure diving into the emerging embedded wallet and account abstraction smart wallet stack with Henri, who is a clear thinker and humble decentralization minded builder. I hope you enjoy the show.
As always, this show is provided as entertainment and does not constitute legal, financial, or tax advice or any form of endorsement or suggestion. Crypto has risks and you alone are responsible for doing your research and making your own decisions.
Links
Timestamps:
(00:00:00) Introduction
(00:05:01) Protocol labs, and how Privy started
(00:09:38) Heterogeneous wallets cater to diverse user expectations.
(00:12:13) Product decision made, focus on embedded wallets - Building stable wall connectors and library is difficult.
(00:21:11) Wallet authentication process: SMS verification and key sharing.
(00:25:14) Web tokens authenticate user and holder. Off share only accessible by user. Single device operations with iframe and key. Typical 90% usage scenario.
(00:29:48) Privy uses hardware security module. It encrypts recovery shares and tracks devices for added security.
(00:43:43) Fear of EOA, comparing Shamir and multi sig.
(00:47:21) Account abstraction allows for smart wallets.
(00:54:43) Main NetEase locked in app, no control.
(01:00:48) Exciting fintech innovations cater to diverse users.
(01:04:19) Balancing user control while empowering developers and users.
(01:08:25) Enabling interoperable wallets in the Web3 space.
(01:13:35) Few relevant DeFi apps; WalletConnect is problematic.
(01:23:46) Apple offers secure self-custody wallets with social recovery.
(01:26:01) Privy is a secure cross-platform custodian.
