StarkWare Sessions #2 | Braavos & Smart Contract Wallets with Motty Lavie

Sometimes, the frontier is at a crypto conference. We’re returning from our adventures in Tel Aviv with nine exclusive interviews with some of the key players in the StarkNet space. Wish you could make it to all the crypto conferences, but don't have the time? Don't worry, Bankless brings the frontier to you. In this episode, we’re talking to Motty Lavie, the founder and CEO of Braavos, the team behind the self-custodial Braavos wallet on top of StarkNet. As the fastest growing wallet on StarkNet, Braavos is paving new ground with smart contract wallets. If you can’t tell yet, David was heavily smart contract wallet-pilled after the Starkware Sessions. ------ 📣 MetaMask Learn https://bankless.cc/metamaskshow ------ 🚀 JOIN THE NATION: https://newsletter.banklesshq.com/subscribe ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken 🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🚁 EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi 👻 PHANTOM | CROSS-CHAIN WALLET https://bankless.cc/phantom ------ Timestamps: 0:00 Intro 3:30 What’s Braavos? 5:30 Smart Contract Wallets 11:30 Signers 14:30 A Use Case Revolution 18:45 An Example 20:50 Synergy with Layer 2 22:50 The Braavos Approach 24:40 Get Involved ----- Resources: Motty Lavie https://twitter.com/mottylen Braavos https://braavos.app/ StarkNet https://starkware.co/starknet/ ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02David Hoffman?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. And sometimes, that frontier is at a conference. Like last weekend, where over 1,000 developers, founders, builders, and investors attended the Starkware Sessions in Tel Aviv in order to participate in growing the Starknet ecosystem. This is Bankless' Starkware Sessions series, which are nine bite-sized episodes interviewing the founders, builders, and ecosystem developers of Starknet. Every once in a while, in the crypto world, a conference happens, but not everyone is available to attend. Don't worry, Bankless has your back, because I go to basically every conference that's out on the frontier, and I bring an entire podcast studio in tow with me, in order to make sure that the Bankless Nation stays on the frontier of what's happening in crypto. In this episode

• 0:46David Hoffman?

  from Bankless' Starkware Sessions series, I'm interviewing Madi, the CEO and co-founder of Braavos, which is one of the two main smart contract wallets in the Starknet ecosystem, the other one being Argent. Now, if you understand smart contract wallets, you'll know that eventually, this paradigm of externally-owned accounts, which is probably the wallet that you use, if you use Ledger or a MetaMask, is not long for this world. Whereas 99% of wallets these days are probably externally-owned accounts, eventually, once we crack the smart contract wallet nut, 99.9% of all wallets out there will be smart contract wallets. The potential that these wallets have will break your brain in terms of what they can do for the world. And so I'll let your imagination run with this interview from Madi. But first,

• 1:28David Hoffman?

  a moment to talk about some of these fantastic sponsors that make these episodes possible. Kraken has been around for almost as long as crypto itself. As crazy as crypto is, Kraken has remained a rock for its clients, building out a platform designed to stand the test of time. Kraken is all about proof, not promises, which is why they've pioneered a proof-of-reserves, a system that lets Kraken's customers verify for themselves the solvency and responsibility of the Kraken exchange. And for this reason, and many more, we've chosen Kraken as Bankless' strategic sponsor for 2023. And once you're done using Kraken to get your dirty fiat money into pristine crypto assets, perhaps you should check out Arbitrum, where so much of the frontier of crypto innovation is taking place. Arbitrum just announced their Stylist Initiative, which is their Brand-new programming environment that lets developers deploy apps using their favorite

• 2:13David Hoffman?

  programming languages like Rust, C, C++ alongside regular old solidity EVM apps. That's can use any coding language they like and it simultaneously drops Layer 2 fees by an order of magnitude. It's a big deal. So many of your favorite DeFi apps have already deployed to Arbitrum, like Uniswap. But did you know that Uniswap isn't just for ERC20 tokens anymore? Uniswap is also an NFT aggregator too, to make sure that you are getting the best price on your NFT purchases. Uniswap gives NFT collectors and traders powerful tools, all from the cozy, comfy Uniswap interface. By the way, it's also got a native fiat on-ramp, it's also deployed on like every Layer 2, and it's got this nifty, cool thing called a universal router that ensures that you always get the best price on your trades. Crypto protocols like Arbitrum and Uniswap are becoming super powerful, so make sure

• 2:57David Hoffman?

  that you're also using a wallet that's equally as powerful, or else you'll be missing out. If you're looking to upgrade your wallet experience, check out Phantom, the number-one wallet of Solana, which has recently come to both Ethereum and Polygon. Phantom has native NFT support, giving you your own NFT gallery from inside the wallet. Phantom is both a browser extension and a mobile wallet, and is also the only wallet to span both the Solana and Ethereum ecosystems. Check it out at phantom.app. And now, let's get into the interview. All right, Bankless Nation, we are here at the Starkware Sessions once again, and I'm talking to Mahdi of Bravos. What's Bravos?

• 3:30Speaker 01

  Bravos is the richest and most powerful city in all Seven Kingdoms.

• 3:37David Hoffman?

  Well, what are you working on?

• 3:39Speaker 01

  So, in Bravos, we are working on a smart contract-based wallet on top of Starknet, taking full utilization on account abstraction, and really want to drive UX forward to bring the next cohort of users into crypto.

• 3:53David Hoffman?

  Okay, so smart contract wallet, account abstraction. For people that don't really know these terms, where should we start?

• 4:01Speaker 01

  So you can think about account abstraction and smart contract-based wallet as synonyms. It's not technically accurate, but I think that in a high level, it's accurate. And think about account abstraction as something that divides your wallet, your account, into two parts. You have the application parts, like in all normal wallets that you know, and you have the account contract on-chain that can run arbitrary logic on your transaction. Now, every transaction that is signed on your application is going through the account smart contract, and that is very powerful, because we can add custom signature verification

• 4:41Speaker 01

  logic, and we can add custom execution logic, and we can really enable functionality that you couldn't do before on blockchains.

• 4:52David Hoffman?

  The metaphor that I've used to explain this to people is that the wallet that they're typically used for if they're signing with a MetaMask or a Ledger is called an externally-owned account, which is another just like not helpful term to describe what's going on here, but that's what it is. And this is like, an externally-owned account is like Bitcoin, whereas a smart contract wallet is like Ethereum, but these are for wallets. And so your externally-owned account is kind of like a dumb input-output wallet, and then your smart contract wallet is like a programmable bank account, it's a programmable wallet. And like, why is that hard to explain? Well, because the limitations are endless, and so like, where do you even start? But the other way I would describe this is like, a smart contract wallet or account

• 5:36David Hoffman?

  abstraction is like a virtual wallet, as in we have different ways of accessing this virtual wallet, but the wallet itself exists inside of Ethereum, rather than an externally-owned account comes from a private key that is external to the actual blockchain, because like, a private key actually does not exist on the blockchain, only the public address does. Do all these metaphors line up? What would you add to this?

• 5:59Speaker 01

  Yes, definitely, definitely. And maybe an interesting fact that on Starknet, your public key is actually not your address. So since you can only access- This is the Starknet blockchain through account abstraction to smart contract accounts. Then you have the account smart contract address, which is your account address. And the public key is just a storage inside of that. So the public key, unlike Ethereum, is not your address. And that gives you a lot of flexibility because you can use different public keys. You can add more signatures, more signers into your account. And that's actually what we do in in Braavos.

• 6:39David Hoffman?

  Okay, so let's I want to unpack that a little bit. You I don't have with a smart contracts wallet, I don't have one public address, I have many?

• 6:47Speaker 01

  No, so you have one public address.

• 6:49David Hoffman?

  Okay.

• 6:49Speaker 01

  But you can have multiple signers.

• 6:51David Hoffman?

  Multiple signers, okay. How does a signer come to be?

• 6:54Speaker 01

  So if I would present what we call Braavos account abstraction security pyramid. Then we can see a hierarchy of security measures that the the user, like in a buffet, can decide to activate. So at the very bottom, we have the notorious seed phrase that we all know and don't don't love so much.

• 7:18David Hoffman?

  And that that is the externally owned aspect of this thing?

• 7:21Speaker 01

  That's the seed phrase that we derive the keepers, the private key and the public key.

• 7:27David Hoffman?

  Right.

• 7:27Speaker 01

  And that's that's the corresponding of an externally owned account that we know from from Ethereum.

• 7:33David Hoffman?

  Okay.

• 7:34Speaker 01

  But but again, the the public key here is not your address. Your account smart contract is your address.

• 7:40David Hoffman?

  Okay.

• 7:40Speaker 01

  And on top of that, the user can add a more advanced signers that will give better UX and much much better security. So one of the things that we've released about two, three months ago is something that we call the hardware signer. And the hardware signer uses the security chip that we have in our mobile devices in order to generate keys and sign transactions. And that's that's really cool because that makes hardware wallet redundant. You get the security of a hardware wallet by the device that you already have. So for for people who don't know, in modern phone, let's say all iPhones and most advanced. Latest Android phones. We have a dedicated security chip inside the phone,

• 8:25Speaker 01

  which is completely isolated from the regular application processor. And it's very hard to break. Even if your phone get hacked, your phone get routed, an attacker won't have access to the keys that resides in this security chip. And we utilize that, together with the power of account abstraction, in order to generate keys and to sign your transactions. Now, I think the cool thing is, you can ask, why no blockchain has done that before? Like, it's, you know, if it's all secure and it's very easy in terms of UX, because you sign transactions like you use Apple Pay or Google Pay.

• 9:07Speaker 01

  So, the reason that no blockchain has done that before, at least no popular blockchain, and it can be done not on Ethereum, not on Bitcoin, not even on Starknet itself, is because the security scheme that we have in this mobile chip is not compatible with the signature scheme that we have on blockchain.

• 9:23David Hoffman?

  And this is just like the E D E C S A signature scheme? It just doesn't work in the chip? It's just like incompatible?

• 9:30Speaker 01

  Exactly, it's incompatible. But since we have a counter abstraction and we have arbitrary verification logic, then we can code the signature verification logic that we want, and this is exactly what we did. We coded the verification logic that is corresponding with the security chip that we have in our phones. And that gives you a very high level of security. Actually, it gives you two-factor authentication. If you think about it, since the keys are generated within this secure enclave, within this secure chip, they are unknown, the private key is unknown to anyone. It is unknown to the application, it is unknown to the operating system, it is unknown to the user. So the user doesn't have the private key. So it's binded to the device.

• 10:13Speaker 01

  And the other thing is that it's, your authentication transactions only using your biometric.

• 10:21Speaker 01

  So either your face ID or your touch ID, and also your biometric authentication works directly with this security chip. So again, even if your device get hacked and an attacker get roots on your device, they cannot steal your keys and they cannot sign transaction for you. So I call it, that's a great combination of UX and security. Because from user point of view, it is seamless, it is frictionless. You sign transaction the same way that you use Apple Pay and Google Pay. But under the hood, you get the strongest level of security.

• 10:55David Hoffman?

  And you also just give users assurances because they're signing as transaction, going through the same process that they're already familiar with on their phone. And so like, I pay with Apple Pay all the time. I go through the New York subway, I use Apple Pay, I pay for my coffee with Apple Pay. And like, making transaction signing also with that same like, "Oh, like, there's a smiley face and it just gave me the thumbs up." That feels good to me as a normal consumer. It's like, this is a process that I'm familiar with.

• 11:23Speaker 01

  Exactly. It's completely frictionless. If you try it, when you try it, you will see that it's exactly like you pay for a ticket on the subway.

• 11:32David Hoffman?

  And it's the UX that, of course, we need to actually have, you know, adoption at grand scales. And so I remember, longtime bankless listeners might remember the burner wallet, where you just like login to like xtai.org or something, and then boom, you have a wallet. Like, that automatic process is kind of that UX that we really need in order to be able to put private keys in people's hands. But I want to ask you about like signers. So we have this virtual wallet. It's got a contract address, and that is our wallet. But there can be multiple signers who can access that wallet. Can you unpack that a little bit? How does that work?

• 12:08Speaker 01

  Yeah, sure. For example, we've added the hardware signer, which is an additional signer on top of the seed signer, on top of the key that is derived from the seed. And once we added the hardware signer, the seed signer doesn't do anything. Meaning, even if an attacker stole your seed... Phishing attack, or malicious software, or whatever, they cannot issue a transaction on behalf of your account. The only thing that they can do is they can issue a transaction with a time delay to remove the hardware signer. And the reason that we support that is if your device gets stolen, or if your device gets bricked, we still want you to be able to gain control back of your account. But for an attacker,

• 12:52Speaker 01

  they will need to wait this time delay period. And in this time, you will understand that someone stole your seed and you can move your funds to a secure place.

• 13:01David Hoffman?

  So is the seed signer, is that like the master account? As in the place where the smart contract wallet is incepted from?

• 13:08Speaker 01

  Yes, I call it a-

• 13:10David Hoffman?

  And that's why it's at the base of the pyramid, right?

• 13:12Speaker 01

  Yes, I call it a soft master.

• 13:13David Hoffman?

  A soft master, right.

• 13:14Speaker 01

  Yes, a soft master. Because once the hardware signer is enabled, the hardware signer is like the master. The hardware signer can- Because we consider it to be fully secure, the hardware signer can run over anything that the seed phrases is trying to do. But that's not all. So hardware signer is, as we said, extremely secure and a great combination of UX and security. But let's say that you have a lot of money in your account and you want to be extra secure. And you, normally you don't use this account on a daily basis, but this is like your holding account. So we allow you to add a second signer, which means that you will have the hardware signer as well as an additional signer.

• 13:58Speaker 01

  And you will need two signatures-

• 14:00David Hoffman?

  Right.

• 14:00Speaker 01

  -in order to execute a transaction on-chain. And we call it the, this is on the top of the pyramid, this is the multi hardware signer. So for example, you will sign a transaction on your browser extension, Braavos browser extension. And then it will automatically redirect you to your Braavos mobile wallet and you sign there. And only once both transactions are signed, then the transaction will actually executed, will be executed on-chain.

• 14:26David Hoffman?

  And so this is an example of the expressivity of smart contract wallets or virtual wallets. And so we have this seed phrase signer, which is where the smart contract wallet originates from. It is the private key that creates the whole thing in the first place. But then, once that, and that's like what you call the soft master. But you can actually create a smart contract wallet using that soft master. But then that smart contract wallet can revoke permissions from the originating seed phrase, which is why we call it soft, as in like we've taken away the power of the thing that created it. And then you can add on a second signer and say, well, this new account has these permissions. And actually, those new permissions can be greater than the power of the account that made it in the first place, the soft master.

• 15:11David Hoffman?

  And then you can start to add in a third device or a fourth device. And each one of these signers can have rules, arbitrary rules applied to them. And this is what you're talking about, again, at the top of the pyramid. We have a hardware multi-signer, which in parentheses, 3FA, as in three factor authentication.

• 15:30Speaker 01

  Exactly.

• 15:31David Hoffman?

  As in certain rules that need multiple signers in order to sign off on, in order to execute something.

• 15:36Speaker 01

  Yeah.

• 15:37David Hoffman?

  And so these are all examples of like this virtual wallet, the smart contract wallet, that can have arbitrary rules about external signers, and that can be anything.

• 15:46Speaker 01

  Yes. And more than that, I want to emphasize two things. One, an account can be born, can be deployed on chain already with a hardware signer built in. So none of that transaction will be signed by the seed phrase key in no time. So that's one thing that I think is very interesting. And more than that, the second thing that we can do is not having these functionalities on a separate account. We can have them according to your transaction value or to your daily limit that you want to set. So for example, let's say that you have a threshold of $100.

• 16:30Speaker 01

  You say, $100, I don't care which signer signs. Up to $1,000, I want the hardware signer. Above $1,000 a day, I want to have two signers. So I want to have three factor authentication. I want to be authenticated with something I know, something I am, and something I have.

• 16:48David Hoffman?

  And this is why this is like a programmable bank account. Like, what do you want? Because any input can become a rule into this virtual wallet, this virtual bank account that we've created. How far can this really go? Can this go to the point of like, um, something of rule of like, anyone that has a particular NFT in their wallet can execute some particular rule inside of my smart contract wallet? And so like, maybe I have a smart contract wallet, and if you have a crypto Dicba NFT, I'll allow you to do something in my wallet, whatever that may be. Is that possible?

• 17:23Speaker 01

  Exactly. The cool thing about smart contract-based wallet and account abstraction is that you can have an arbitrary logic on any transaction. So whatever you can imagine, we can code and can be implemented. And that's really like taking, I think, the crypto user experience to the next level, both in terms of functionality, but I think more important in terms of simplicity. We want to reduce the burden from users' shoulders about taking care of their keys and taking care of not making even a single error, and all their funds are gone, etc. And a smart contract-based wallet, it's like Braavos really enabled us to do that.

• 18:04David Hoffman?

  Yeah, and I really want to impress this upon listeners that like, this is a Bitcoin to Ethereum moment for the wallet world. Where like, imagine if crypto was just Bitcoin, it would be much less expressive and with much less applications that are possible. And that same thing is true with the smart contract wallet world. This goes from just having dumb input-output wallets to having very expressive wallets that can literally do anything. And so the use cases that come out of this world are literally infinite.

• 18:33Speaker 01

  Exactly. That's a great analogy. And my belief is all wallets going forward will be smart contract-based. The incumbents today will transform to be smart contract-based, and certainly new wallets will be smart contract-based because the level of functionality and UX that it enables, it's an order of magnitude better.

• 18:54David Hoffman?

  Yeah, and just to really drive this point home, let's imagine that you, the user of a smart contract wallet, you're at home and you need to send a very large transaction, like almost all of your money. And perhaps you have three signers. And so you're on your desktop computer, because that's where we mostly do our stuff. And you process the transaction, and then a message shows up on your phone saying like, "Oh, this is a large transfer." You need your phone to also sign off on this. So then you press approve on your phone. And then your mom calls you and says, oh, son, like, I just got this message to send all of this money from your wallet to another wallet. Is this you? And you're like, yeah, that's me. And then your mom also says yes, because it was so large that you needed an external, like, reference point.

• 19:37David Hoffman?

  And like, you could go off into the details about how far this goes. But the cool thing is, is that these are all devices. And so it's really the device that is the unique signer, no longer just like a unique private key. And I think that's pretty cool.

• 19:50Speaker 01

  Exactly. And that's a very good point, because when we add a second signer, we don't add a second seed.

• 19:55David Hoffman?

  Right.

• 19:55Speaker 01

  We want to get rid of the seed. For the long run, we don't want any seed. So when we add a second signer, there's still only one seed for the account. So the users still need to handle only one seed. And in the future, even that would be redundant.

• 20:08David Hoffman?

  Right. And so like, when users write down their seed phrase, they might notice that in their ledger or MetaMask, you can keep on making new accounts over and over and over again. And so one seed phrase generates an infinite number of accounts. And these new accounts are like signers, right? That's what they are?

• 20:22Speaker 01

  Yeah. And also in Braavos. So in Braavos, you can also create multiple accounts. So you can have like an account for your daily transactions. And you can have your holding account. And you can have, I don't know, your NFT account. And you can set different level of security to each and every account. You can put on one account, the Hubba signer. On the other account, the multi-signer. And on the third account, you can just stay with the seed.

• 20:49David Hoffman?

  So there's a conversation pivoting here a little bit about ZK rollups and smart contract wallets. There's a particular synergy behind the world of ZK layer twos and smart contract wallets. Can you unpack that synergy? Why does that synergy exist? What's so special about the relationship between smart contract wallets and ZK rollups?

• 21:06Speaker 01

  So if we take Starknet as an example, Starknet has two very important features. The first feature is that it has, or at least will have, very low gas fees. And this is important, because all this logic that we are talking about is very heavy in terms of compute. For example, to implement this elliptic curve of The mobile chipset. Our initial naive implementation was 400,000 steps, 400,000 Kyra steps. Kyra is the programming language that we use on Starknet like Solidity on Ethereum. And that's a lot. Today, we released an improvement of that that reduces 40% the number of steps.

• 21:49Speaker 01

  250, 240,000 steps, but still a lot. So we need very low compute and gas price in order for that to be economically viable. Because we want people to use that not only for transferring millions of dollars, but also, you know, when you use a subway.

• 22:09Speaker 01

  And to do this, together with improvement that Starknet will issue in their next version, rolling out in two weeks, we will have a sense of difference between using the hardware signer and using like a regular signer. So that's one thing, the gas fees. And the second thing is that on Starknet, we have account abstraction built into the protocol. Meaning every transaction must go through an account before it interacts with other contracts on chain, before it goes to an AMM, to an NFT marketplace, to whatever.

• 22:43Speaker 01

  And that's extremely powerful, because then we can enforce all these signer and all this logic that we talked about.

• 22:50David Hoffman?

  So getting into Braavos more specifically, other Bankless listeners might be familiar with Argent. Braavos also built on the Starknet, Starkware ecosystems. What are you really leaning into at Braavos? Like, what are your first applications that you're trying to get integrated into your guys' wallet?

• 23:05Speaker 01

  So first of all, all the security aspects that we've just discussed in the past 20 minutes, the idea is to make user onboarding as friction as is possible and as secure as possible. As I said, to remove the burden from the user's shoulders, to take care of security, etc., to be in a position that they need to order a hardware wallet, pay for that, learn how to use that, store another seed phrase, right?

• 23:35Speaker 01

  It's like very difficult. Even for technical people, certainly for mass market. So that's one thing. The entire aspect around making your wallet, making your account like a traditional bank, but a decentralized self-custodial bank that is completely controlled by you with a great UX. So that's one. And the second thing is the entire aspect of DeFi. So today in Braavos, we already have exchange integrated into the wallet. So users don't need to go to outside apps in order to exchange funds. The next step will be to have, I call it one-click earn yield. So we will be able to earn yield on your assets in the wallet, whether it's on Starknet or under the hood, automatically bridge to the Ethereum brace layer.

• 24:19Speaker 01

  And for example, stake your EBITDA in Rocket Pool or on Lido and earn yield. And going even forward, enabling borrowing and lending also from within the wallet. So the goal is that everyday users, users that are not crypto savvy, will get the full experience of crypto right at their fingertips with like two taps.

• 24:48David Hoffman?

  So if anyone in the bankless nation listening to this, be it, maybe they're a developer or maybe they're just a user trying to get their hands on their wallet. Who are you guys really looking for to engage with? Like what relationships are you guys looking for at Braavos? And how might people get started learning more?

• 25:04Speaker 01

  So first of all, you are welcome to our website and to our Twitter account. We share a lot of information there. There is a lot of detailed technical kind of blog posts about the hardware signer and why is it secure and how the keys are actually being generated in manufacturing process of the silicon, et cetera, et cetera. So that's one thing. We have a very vibrant Discord community that people are welcome to join. I think for us, there is a lot of things in terms of the user journey and the overall UX that we can solve. One thing that is really bothers me is the on-ramp of free.

• 25:46Speaker 01

  Money to crypto. I think we as an industry need to find ways to make it much more, much easier, much more simple. It shouldn't take like half an hour with all sorts of IDs and pictures and proof of address, etc., etc. So today on on Braavos, we support several on-ramp mechanism from credit card, from direct bank transfer, from centralized exchange. You can transfer directly to your to your wallet and of course, bridge from from other chains. But I think that this point is still with very high friction and anyone that walks on interesting stuff in that area will be will be great to cooperate.

• 26:32David Hoffman?

  Amazing. Well, thank you so much for helping me walk through the the world of account extraction in hardware wallets. Cheers.

• 26:37Speaker 01

  Thank you.

• 26:37David Hoffman?

  Cheers.