Crypto Money Startup Wants To End Gas Fees With Layer 2 Wallet – TechCrunch
Money officially launches its Layer 2 solution. The company chooses zkSync like its Layer 2 scaling implementation. It is supposed to offer cheaper and faster transactions without any compromise on security.
If you’re unfamiliar with Argent, it’s an Ethereum smart wallet for iOS and Android that’s been around for a few years. It is a non-custodial wallet, which means that you are responsible for your funds and everything you do is recorded on the blockchain.
Over the past two years, the biggest problem with Ethereum transactions has been gas fees. This can be quite daunting if you are new to cryptos and your wallet says you have to pay $30, $45, or even $60 in gas fees to complete a transaction.
This is why several teams have been working on ways to solve this problem. In order to reduce transaction fees, transactions could be processed from the main Ethereum blockchain (Layer 1). These projects are called Layer 2 solutions.
Some people think that there will be several blockchains (or sidechains) offering different advantages and disadvantages. Blockchains like Polygon (formerly Matic) or Avalanche are compatible with the Ethereum Virtual Machine (EVM), which means it doesn’t take a ton of work to switch from one blockchain to another.
Others believe that some transactions will be processed outside of the main Ethereum blockchain. Essentially, transactions are sent to Layer 2 nodes so they can be processed and aggregated.
When there are enough transactions, a group of transactions is submitted to the main Ethereum blockchain. Once on the main Ethereum blockchain, these transactions cannot be changed.
Zero-knowledge rollup implementations like zkSync are particularly cost-effective because proof of validity is generated based on hundreds of transactions. This proof of validity is then posted to the main Ethereum blockchain, and Layer 2 transactions cannot be modified as they will not conform to the proof of validity.
And that’s what Argent chose as their scaling solution. “We waited a lot. We skipped a lot of short-term options to make no compromises,” Itamar Lesuisse, co-founder and CEO of Argent, told me. “That’s why our approach has been a bit more opinionated.”
The company promises gas fees for Layer 2 transactions that should be as low as $1 per transaction. Since Argent started working on Tier 2 accounts, 500,000 people have signed up for the waitlist.
“From Monday you will start your life on L2, you will buy cryptos on L2,” Lesuisse said. Argent’s existing Layer 1 wallets aren’t going away, but they won’t be the default wallet. They will be called “Vaults” to reflect the fact that they are for wealthy individuals with millions of dollars in crypto assets.
With this move, Argent hopes to attract a new audience of mainstream crypto enthusiasts. Eventually, Argent wants to create a kind of financial super app for web3 and DeFi. “Revolut is truly the inventor of the super financial app and we believe we can go beyond that,” Lesuisse said.
After that, users can also trade cryptocurrencies on a decentralized exchange within the app. money uses ParaSwap as a decentralized exchange aggregator to find the best trading pair based on what you are selling and what you are buying.
Argent also allows you to earn interest on your crypto assets through DeFi protocols from various partners, such as Yearn, Lido, Aave, and Gro. “We limited it because the experience on Layer 2 is much simpler. The more concentrated the demand, the lower the costs,” Lesuisse said.
Layer 2 represents a fresh start for Argent. In addition to the low transaction fees, the company believes that the current experience with the non-custodial wallet is not so good, especially due to the concept of seed phrases.
“That old model with a key and a Post-it in your drawer will never be our way of handling money,” Lesuisse said. With Argent, there is no seed phrase. You can secure your wallet with your iCloud account or with guardians. Your friends can act as guardians and help you get your wallet back.
But Lesuisse is also well aware that most people just go to Coinbase and buy crypto. With today’s update, that’s what the company wants to change. “The largest non-custodial wallet is Metamask but our main competitor is centralized exchanges,” he said.