The DeFi user experience today is less than ideal. While crypto has enabled an exciting new set of financial primitives to take hold, safety and usability are often the last thing on developers’ minds, leaving users unfamiliar with crypto feeling uncertain and wary of participating in the onchain economy.

As a result, teams are now working towards a safer vision of DeFi that everyone can use. When Kinto approached Turnkey, safety and usability were an integral part of their vision to build a DeFi-focused L2 rollup. But their goal of creating a safe and KYC-ready L2 that bridges TradFi and DeFi wouldn’t be possible without their relentless focus on improving the crypto user experience.

Here’s how they did it with Turnkey:

The problem: Bootstrapping a safe & user-friendly DeFi network

In order to onboard and reward valuable participants to the network as early as possible, Kinto launched Engen, a sybil-resistant program to maximize value creation and distribution for their protocol. Users are able to participate in the program to earn future rewards such as priority access to products on Kinto, reduced fees, and gas rebates.

But sybil behavior is often a core challenge in implementing incentive programs like Engen. Kinto saw the need to build a KYC flow that stayed true to permissionless and decentralized principles while keeping sybils at bay, so that users could have a safe and seamless experience once onboarded to Kinto.

The solution: Building a custom KYC authentication flow with Turnkey

This is where Turnkey comes in. In order for users to sign transactions and create contracts onchain, Kinto users must go through a custom third-party KYC flow, with KYC providers selected via governance. Kinto approached Turnkey to make this onboarding flow as smooth as possible.

After the initial KYC process, users receive a soulbound NFT minted by Kinto verifying their KYC status, which then enables them to create a non-custodial smart account wallet using a Turnkey-managed externally-owned account (EOA) as the core signer. Users are able to create these Kinto-embedded wallets with a few clicks. Each Kinto smart account wallet has signers managed by Turnkey, allowing users to use passkey-enabled signatures and set up user-friendly recovery methods, should they ever lose their private keys. Sending transactions can be done with a single finger tap.

Because of this user-owned KYC and authentication system, Kinto is sybil-resistant by design, and users can experience the full range of Dapps on Kinto via a seamless, web2-like user experience.

Kinto’s results

• Leveraging Turnkey’s web2 authentication methods make wallet UI/UX invisible to the point that multiple new users asked, “Is that it?” at the end of the onboarding process.

• With this easy onboarding, Kinto was able to onboard 25K new users so far during its Engen launch program

• Turnkey’s flexibility enabled Kinto to build fully automated user recovery flows, backed by a decentralized KYC process

• Kinto’s Engen Phase 4 is now open, and has raised $4.61M in TVL - making them the #34th top L2 (source)

About Kinto

Kinto is the safety-first L2 designed to accelerate the transition to an on-chain financial system. It features user-owned KYC and native account abstraction to solve the biggest blockers to mainstream adoption: security and user experience. Kinto offers safety assurances and compliance tooling to facilitate the interactions between institutional capital and Ethereum on-chain opportunities. If you believe in this on-chain financial system, join Kinto's launch program (Engen) and become a founding member at https://engen.kinto.xyz

About Turnkey

Turnkey is secure, flexible, and scalable wallet infrastructure offering low-level primitives for teams building onchain applications and infrastructure. Founded by the team that built Coinbase Custody, Turnkey is powering serious applications across a wide range of use cases, from  wallets-as-a-service to programmatic backend crypto automation. By leveraging a novel security framework, Turnkey achieves 50-100ms signing latency for millions of wallets, all with affordable transaction-based pricing that’s designed for scale.