Imagine purchasing a monkey JPEG for millions of dollars just to have it stolen from your digital wallet. That’s exactly what happened to actor Seth Green, who eventually had to beg the hacker to give him back the NFT (and probably paid them over $100,000 to do so).
Green’s situation is more typical than one might imagine, which begs the question of whether or not NFT platforms should assist their clients in seeking remedy when this occurs. In a sector where decentralisation and self-sovereignty are essential values, it is extremely challenging to combat theft and enforce ownership rights. Alex Taub, the founder and CEO of Upstream, told TechCrunch in an interview that NFT investors still need to feel secure retaining the digital assets they buy.
“Security using crypto is incredibly difficult. People can remove a lot of information if they lose their export keys, their seed phrase, or click on something harmful. Sometimes, when you’re half asleep and doomscrolling, you click on a horrible link, and it’s all over,” Taub said.
Upstream describes itself as a full-stack, no-code platform for developing DAOs and raised its most recent round of funding in March for $12.5 million (decentralized autonomous organizations). The business has recently released a new product called the “Vault DAO,” which Taub claims would increase security for NFT holders by utilising its expertise in DAO tools.
It’s important to consider why Taub might have felt the need to develop an entirely new solution before we look at how a Vault DAO functions. By no means is security a new problem in crypto, but the available solutions, particularly for individuals, are insufficient.
Hardware wallets, for instance, offer a safe way for users to save their wallet’s private keys on what is effectively a hard drive, but these “cold” wallets aren’t very well-liked by users. Taub also pointed out that losing the seed phrase needed to access one’s cryptocurrency is just as easy as losing a hardware wallet. Another option is “hot” wallets, which are online, but Taub said he wouldn’t store any precious assets in one because the majority of NFT solutions are custodial or run by a centralised organisation. Taub also expressed concern that assets in a hot wallet would be overlooked in the confusion of connectivity problems.
Upstream’s solution, The Vault DAO, functions as a multisignature wallet that can be set up to demand approval from numerous separate accounts in order to authorise a transaction on behalf of a user. According to Taub, a user can create several accounts directly through Upstream and set a threshold for the number of signatories required to carry out a certain type of request.
For instance, a user might demand the approval of three signatories before allowing any movement of assets from a particular wallet, and those signatories could either entirely be the user’s own accounts or include accounts that the user has delegated to a reliable friend. The product functions mechanically as a user’s own DAO because each transaction entails a user proposal that is made, voted on by a predetermined critical mass of DAO members, and then carried out as such.
It shares many similarities with Gnosis Safe, a well-known multisig wallet geared toward businesses, but according to Taub, the Vault DAO is considerably more user-friendly in terms of design. Taub said that Vault DAO is primarily made for individual users to secure their personal funds as opposed to groups that need many parties to sign off on a transaction, in contrast to the majority of popular multisig wallet alternatives now available on the market.
The Vault DAO solution interfaces with popular wallets like MetaMask and Rainbow as well as the WalletConnect protocol, enabling users to link assets housed in “cold” storage to their Vault DAO, Taub said. As for where the assets are actually held, Taub added.
Although Taub did not provide any information on the anticipated date for the product’s public launch, consumers can presently sign up on Upstream’s website to obtain early access to the service.
Taub referred to Upstream’s platform as having two sides, one of which acts as a “Shopify for DAOs” and assists users in creating groups, and the other of which offers a user-friendly front-end interface for managing DAOs.
“At the end of the day, we don’t hold your NFTs or your cryptocurrency. You have full access to it in this multisignature wallet, according to Taub. So that’s how I kind of view it: “I feel comfortable knowing that I’m safeguarding myself against clicking on a link and losing all of my stuff, as well as confident knowing that I still possess my stuff.”