By: Raye Hadi

Table of Contents

1. Introduction

2. Background

3. Guardians

4. Smart Contract and Modular Architecture

5. Conclusion

6. Sources

7. Footnotes

Introduction

     When it comes to crypto wallets, getting started can be stressful and complex. Argent is a wallet that aims to remove this complexity and provide its users with a stress minimized experience for navigating the defi ecosystem. Argent is a non-custodial smart contract wallet developed by Itamar Lesuisse, Julien Niset, and Gerald Goldstein that aims to abstract (1*) the complexity of crypto and defi for people wanting to explore this space. To quote Itamar “if you want to onboard a billion users, you have to abstract the friction points”. When it comes to the growth and adoption required to onboard mainstream society, this could not be more accurate. The internet, the phone in your pocket, SWIFT bank transfers, all are a few examples of the multitude of complex technology paramount to our daily lives. None of these require us to have any understanding of what’s going on behind the scenes to access their full potential. In becoming everyday essentials, the complexity of these technologies had to be removed from the average user’s experience. This is a well-known obstacle in crypto/defi ecosystems and one of the driving incentives behind Argent’s creation.

     Currently the market for crypto wallets is dominated by EOA (Externally Owned Account) models. EOA wallets, commonly known as seed-phrase wallets, do not provide the necessary frictionless onboarding experience to users that mainstream adoption requires. Due to the structure of an EOA, wallet holders are required to write down or memorize their private key in the form of a 24- or 12-word seed phrase. This seed phrase provides ultimate access to all funds stored at this address. In EOA systems, wallets act as the interface allowing the user to access the blockchain where the address representing their funds resides, then manipulate those funds between addresses using their private key (seed phrase).  Assuming wallet access isn’t lost or compromised, this method works well, and a lot of the complexity is abstracted from the user. However, the issue arises when this assumption is broken. The seed-phrase of an EOA wallet constitutes unilateral control, meaning the balance of an address can be lost, stolen, or destroyed if a user’s seed phrase is impaired. This places utmost importance on seed-phrase preservation when using an EOA wallet. So while much of the complexity is removed, EOA wallets fail to remove arguably the most vital complexity in the entire process and instead place the onus on the user. Thus, forcing the unwanted responsibility of understanding the importance of seed-phrases and seed-phrase workings onto users. Realistically, no crypto-removed person from a G7 country would ever consider this over traditional finance alternatives.  For necessary migration to happen, defi wallets need to be comparable to or easier than their traditional finance alternatives. This was the goal behind Argent’s creation and describes the vision of Argent’s founders.

Background

     Argent’s three founders hold impressive resumes with a diverse range of expertise ranging from high level management to quantum cryptography. In terms of starting a company, this is a familiar venture as two out of the three have co-founded multiple companies prior. Argent was launched in 2017 on the Ethereum blockchain. Their goal was to bring a simple non-custodial wallet to defi with a straightforward but robust safety net. The project was backed by funds such as Paradigm, Index ventures, and Creandum, Argent also maintains close ties with prominent defi protocols such as Maker, Compound, Uniswap, and AAVE. Argent implements its system in a manner that gives its users full autonomy over their assets through a combination of app sovereignty and smart contract utilization.

     Like EOA wallets, Argent follows the process of using the wallet application as an interface to allow users to access the Ethereum blockchain. However, unlike an EOA wallet where the address represents assets, in Argent the address representing the digital assets points to a smart contract where the assets are stored. Then, like an EOA wallet, funds can then be manipulated between addresses using the private key.  The main differences Argent implements is the location of digital assets on the blockchain, and how user’s private keys are secured.

Guardians

     Argent uses a concept called guardians to secure user funds and private key ownership. Guardians are separate EOA or smart contract wallets given permission by the wallet owner to execute specific operations on their wallet. These operations include security measures meant to protect wallet funds and activity. Guardians can be wallets of friends or family, third party services, or other wallets owned by the original wallet owner. Guardians transition wallet security away from the single point of failure seed-phrase model to a more distributed social verification system. This system facilitates multiple layers of security on wallets, as there are a variety of safety measures in place in the event a wallet is lost, compromised, or stolen. Unlike EOA wallets, there is no need for seed phrase conversion of the private key as the private key is encrypted and automatically stored on the device hosting the Argent app. Now while it is possible that the private key is compromised or the device is stolen, guardian centered security measures prevent the attacker from draining the wallet or moving the funds without guardian approval. These security measures consist of guardians having the ability to lock, unlock, approve wallet recovery, and approve/deny transactions of the wallets they protect. This gives the attacker multiple layers of wallets they must control before any assets can be stolen. All while assuming the wallet owner doesn’t recover his wallet on a new device with an alternate private key before they finish. Guardians put private key ownership and security in a much more robust model that removes single point of failure risk and is much more intuitive to newcomers than seed-phrase storage.

Smart Contract and Modular Architecture

     Another important feature of Argent is the location of digital assets. This is because having assets perpetually existing on a smart contract makes the accounts programmable. This not only enables the guardians’ safety measures but also makes possible in-app dapp integration. Argent is built using a combination of modular architecture and smart contracts that support ERC20 (fungible tokens), ERC721 (non-fungible tokens), and ERC1155 (combination of ERC20 & ERC721) tokens. The Argent app contains many distinct modules, authorized to handle specific pieces of wallet logic. All of these modules contain smart contracts that can be called to perform particular roles. Using this architecture, Argent smart contracts can interact with dapps(2*) behind the scenes allowing users to lend on AAVE, join liquidity pools on Uniswap, or obtain yield on Compound without leaving the Argent app. This affords Argent users with a frictionless defi experience not seen in other wallets. Additionally, in their efforts to simplify defi, Argent attempted to subsidize gas fees, shielding that complexity from their users. Although this feature had to be dropped, measures to minimize gas costs have been incorporated in the modular architecture as well as implementation of L2 solutions such as ZK Sync (3*). All this technology is what allows Argent to seamlessly move user funds between dapps on the Ethereum blockchain and provide the most user-friendly experience when it comes to defi.

Conclusion

     As a defi wallet, Argent excels in simplifying the process and gives users an unrivaled experience in traversing the Ethereum blockchain. However, Argent’s scope does not transcend the Ethereum chain as its smart contract nature is not cross-chain compatible. Without interoperability, the Argent ecosystem is incapable of interacting with assets native to other chains such as Bitcoin and Solana. This severely limits the market Argent reaches considering competing wallets give users much more variety in terms of supported chains. Due to this, Argent is not one of the most popular defi wallets and the highest number of wallet downloads is advertised as only over a hundred thousand. While this is a significant amount, it is insufficient if your goal is to onboard a billion users. Due to this limitation, smart contract wallets such as Argent are treated like second class citizens when it comes to dapp integration. Outside Argent’s select few partners, many dapps do not prioritize the necessary software to seamlessly onboard smart contract wallets like Argent. This requires Argent to incorporate features such as Wallet Connect which only reintroduces some of the complexity Argent intended to remove.

     Even with these problems, Argent is still a truly innovative application and debatably the superior wallet for Ethereum defi. The programmable smart contract nature combined with the guardian security measures allow the wallet to host some of the best features and most straight forward experiences when it comes to defi. With the ethos of crypto being decentralization, Argent is the closest wallet aligning with this philosophy. Argent open sources all code and updates, cannot police user activity, and cannot force any users to updates or changes of their wallet they don’t consent to. Additionally, through guardians, Argent has decentralized the security of their wallets by creating a system of distributed trusted verification. As crypto adoption increases and interoperability solutions become more available, I believe Argent is one of the most likely wallets to succeed in onboarding the next 1 billion users.

Sources

Footnotes

• 1* Abstract: Hiding unnecessary complexities from the user. The removal of unnecessary detail from UX.

• 2* Dapp: A decentralized application. Typically a smart contract based application built on top of an L1 smart contract blockchain such as Ethereum. These applications make up the defi (decentralized finance) ecosystem.

• 3* ZK Sync: A layer 2 scaling solution for the Ethereum blockchain using Zero-Knowledge rollups.