Blockchain startup Torus has an impressive cap table.
The private-key management firm recently closed a $2 million seed round led by Multicoin Capital. The fundraise also saw participation from notable investors like Coinbase Ventures, Sixth Horizon, Accomplice and Terminal. Binance Labs invested $500,000 in the round.
Torus, says Multcoin’s Kyle Samani, is solving “one of the most critical problems slowing the adoption of web3.” That is, public- and private-key management.
Blockchains are built on the backbone of public-key cryptography. Users are identified and authenticated on a blockchain through a set of “keys” represented as a randomized string of alphanumeric characters.
For bitcoin, the key that allows a user to actually spend any amount of value on the network is called the private key. It is imperative that users protect and keep secret their private keys or else risk having their funds spent by another user.
For ease and simplicity, many users simply cede management of their private keys to a larger entity such as a cryptocurrency exchange. However, many of these exchanges have faced hacks resulting in the loss of millions of dollars of users’ 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 told CoinDesk. “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.”
Torus presents key management solutions for users in which any sensitive information held by the startup is split across multiple computer servers, a process known as sharding. In this way, even in the event of security breach, no attacker can easily reconstruct users’ private keys.
In addition, Torus currently offers users on-ramp integrations “indistinguishable from the login flow for web2 apps,” such as Google and Facebook, according to the company.
The developer team behind Torus received the initial investment from Binance Labs last September. Torus launched a beta testnet earlier this year for ethereum users and is presently working towards building tools for other major blockchain platforms, including Tron and EOS.