Safe: Unlocking the Era of Programmable Ownership

Our thesis on Safe, and why we are more excited than ever to stand alongside the community as it approaches a vote on token transferability.

Since the fund’s inception in 2018, we at 1kx have invested in over 100 projects under the thesis that token networks, powered by software and governed by communities, have enormous potential to impact the world economy and society at large. We believe the technologies that enable this will be built under three main principles:

  • Self-custody. Users should have full ownership and control of their digital assets and be able to use them in a secure and convenient way.

    This unlocks digital property rights for the first time ever.

  • Open Innovation. Technological primitives should be permissionless and composable to foster a resilient ecosystem of independent products and services built on top.

  • Community Ownership. Builders, contributors, and users should own and control the protocols and infrastructure that empower our everyday lives. This aligns the incentive of network participants in the long term, tokens being a mechanism for protocols to capture and distribute the value it creates to the stakeholders and activities that contribute to its success.

Over the past five years, Safe has laid a robust foundation for the Web3 ecosystem across all three pillars. First, it offered a self-custodial smart account, which enabled onchain organizations to store and govern their treasuries securely. Then it opened its core infrastructure to allow independent teams to build in a modular, permissionless way. Thirdly, it launched SafeDAO and SAFE token, designed to help the project achieve technical, economical, and governance decentralization for critical components in the Safe ecosystem.

Why we Invested in Safe

Safe was born under the classic startup adage “build something you yourself want” when the Gnosis team developed an in-house multisig smart contract wallet, “Gnosis Safe,” to store its funds. The multisig product was quickly adopted by other DAOs and communities looking for simple ways to manage their onchain assets. Out of the proliferating suite of DAO tools at the time, Safe was among the first to find product market fit.

By the time we led Safe’s round in 2022, it was already the de facto asset management solution for DAOs, enterprises, and power users alike. Safe stored over 40B worth of value at the time, with a budding ecosystem of wallets (Metamask Institutional), treasury management (Coinshift, Parcel), DAO tools (Onchainden), NFT portfolio management (Castle), and other products building on its core smart account.

As long-time users, we already saw Safe as critical infrastructure for the space, but we were even more excited about what was to come. Safe’s value proposition is much more than a standalone multisig wallet. It was designed to be a fully secure, programmable platform for ownership. Over the past two years, we have worked with the team to build out this vision and continue to hit its strides through Safe{Wallet} and Safe{Core}.

Empowering Programmable Ownership

Safe{Wallet}, the flagship self-custody wallet built on Safe{Core} Smart Account contracts, is now among the most Lindy products in web3 thanks to its unbeaten security track record, the team’s technical rigor, and its community stewardship.

Safe’s adoption goes from strength to strength across market cycles, further catalyzed by the unraveling of centralized service providers found to be reckless with users’ funds. In the week following FTX's revelation, Safe saw a $800m+ net inflow as users fled to self-custodial solutions, further signaling the market’s confidence in the product and expanding the user base for Safe’s ecosystem of products and services.

Today, Safe has:

  • $100b+ total value secured across 15+ networks

  • $1b+ in monthly transfer volume for ETH alone

  • 8m Safe accounts created (+290% YoY)

  • 42m Safe transactions (+350% YoY)

  • 200+ projects building on Safe accounts and tooling

TVL benchmarking prepared by Areta, a crypto-native investment banking firm, showcases Safe’s significance to the overall ecosystem next to prominent L1s and other category leaders.
TVL benchmarking prepared by Areta, a crypto-native investment banking firm, showcases Safe’s significance to the overall ecosystem next to prominent L1s and other category leaders.

Safe is now being used to facilitate payments via traditional payment rails through debit card products like Gnosis Pay and BasedApp. For the first time, consumers can use assets in their Safe to make purchases from any merchants that accept Visa. Safe{Core} Smart Accounts also power the self-custodial ownership stack of Worldcoin, with millions of unique users worldwide.

With battle-tested smart contracts at its core, Safe{Wallet} is composable with other protocols and applications. Its App Store currently features over 100 applications across DeFi, NFTs, bridging, and governance that users can interact with right from the wallet interface. More importantly, Safe’s architecture facilitates feature extensions through third-party modules. This gives users optionality in the service providers they want to work with and turns Safe itself into a platform for downstream products and services.

One example is the Recovery module, where upon installation the user can designate a Recoverer and customize recovery conditions. Safe’s recently launched Recovery Hub makes use of this module to provide a curated marketplace of crypto recovery options, starting with Sygnum and Coincover, which caters to individuals, DAOs, and institutions of varying preferences for recovery solutions and providers.

Other examples of modules include session keys, account automation, and spending limits. The Zodiac team has thus far been responsible for the most prolific set of Safe modules. But in the past year we have seen dedicated module infrastructure projects such as Rhinestone* and ZenGuard emerge to accelerate the development of modules via developer tools and module registries to make smart accounts more powerful than ever before.

Making Web3 Accessible to All

As the first and leading smart account provider, Safe has been at the forefront of the account abstraction movement, which aims to establish smart accounts as the default means for interacting with web3. The wallet ecosystem had a pivotal year in 2023 with the mainnet deployment of the ERC-4337 EntryPoint contract and the proliferation of embedded wallets that enabled users to onboard onto dapps using familiar login flows.

For developers and builders, Safe{Core} is an essential tool to integrate Safe smart accounts into any platform. This includes an Account Abstraction SDK designed to be agnostic to paymaster service for gas abstraction, authentication providers, and transaction relaying infrastructure making Safe accounts compatible with almost any developer toolstack. The Safe{Core} SDK continues to lead market share as builders look to enhance their dapp usability with AA features.

Safe's commitment to the highest security standards and unparalleled track record enables developers to launch production-ready apps, and users can interact with Safe accounts knowing they have stood the test of time. Account abstraction is merely the first step in unlocking the full potential of web3. Safe’s plug-and-play and use-case agnostic primitives, battle-tested infrastructure, and vibrant community of builders uniquely position it to tackle even more ambitious goals in the coming years.

As long term users and members of the Safe ecosystem, we look forward to seeing Safe’s primitives proliferate across new user bases, networks, and markets as smart accounts become the primary means to interact with web3.

If you are building on Safe, please reach out!

This article is for general information purposes only and should not be construed as or relied upon in any manner as investment, financial, legal, regulatory, tax, accounting, or similar advice. Under no circumstances should any material at the site be used or be construed as an offer soliciting the purchase or sale of any security, future, or other financial product or instrument. Views expressed in posts are those of the individual 1kx personnel quoted therein and are not the views of 1kx and are subject to change. The posts are not directed to any investors or potential investors, and do not constitute an offer to sell or a solicitation of an offer to buy any securities, and may not be used or relied upon in evaluating the merits of any investment. All information contained herein should be independently verified and confirmed. 1kx does not accept any liability for any loss or damage whatsoever caused in reliance upon such information. Certain information has been obtained from third-party sources. While taken from sources believed to be reliable, 1kx has not independently verified such information and makes no representations about the enduring accuracy or completeness of any information provided or its appropriateness for a given situation. 1kx may hold positions in certain projects or assets discussed in this article.

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