Torus Labs Private Limited, a Singapore-based private key management startup, has raised $2 million in a seed-funding round led by Multicoin Capital, the company announced in a blog post on July 9, 2019. The round included participation from Binance Labs, Accomplice, Coinbase Ventures, Sixth Horizon and Terminal.
Torus Labs said it will use the new capital injection to “grow our team, accelerate development, and polish the on-ramp for users onto decentralized systems,” per the post.
Founded in 2018, Torus has developed a distributed key management solution that allows users to log in to applications with their open authentication (OAuth) accounts, such as Google or Facebook.
The solution seeks to make the authentication procedure simple and straightforward for both users and developers, and is especially targeted at decentralized applications (DApps).
“Key management is an extremely acute problem for all DApps today,” Kyle Samani, co-founder and managing partner at Multicoin Capital, told Bitcoin Magazine. “The poor user experience (UX) of remembering public/private key pairs, a seed phrase and using these keys without compromising their security is one of the main problems holding back mainstream adoption … We examined all of the key management solutions in the market and Torus by far presents the best solution we’ve seen.”
Torus has created an innovative solution that uses distributed key generation (DKG), an encryption process in which multiple parties contribute to the calculation of a shared public and private key set.
The Torus system splits up a user’s key into multiple key shards and distributes them to a network of nine nodes run by ecosystem stakeholders, including Binance, Coinbase, ETC Cooperative, Terminal and Kyber. In order to reassemble the key, five out of nine nodes need to share their respective key shards.
While this model may not strictly adhere to the space’s popular “not your keys, not your assets” ethos, having private key shards distributed among these nodes does make maintaining them much easier.
What makes Torus’s solution distinctive, according to Samani, is that the nodes collectively generate a private key without ever actually putting the key together in a single location.
“This approach minimizes trust assumptions, works across all devices and browsers and has built-in account recovery,” Samani said. “No other solution in the market leverages this approach with these features.”
From an end-user perspective, users simply need to log in with Torus using Google or Facebook Connect. Torus then automatically retrieves the key shards and reconstructs the private key instantaneously. The process takes just a few seconds, enabling DApps to onboard new users in a fast, secure and familiar way.
“Consumers shouldn’t have to spend upward of 10 minutes setting up complicated key pairs just to try an application,” Samani said. “They should just push one button and magically be logged in. Torus makes that possible for both consumers and developers alike.”
According to Samani, Torus’s addressable market starts with every mainstream cryptocurrency user and all the developers building DApps for those users.
“Torus is for every Web 3 DApp — games, decentralized finance (DeFi), wallets, exchanges and more,” he said. “We expect that once the market knows what Torus is and how it works, that it will quickly become the market standard because of the elegance of its implementation.”
He also expects Web 2 applications to adopt Torus for general authentication.
“Everything from connected sensors and devices, to smart locks, to your favorite mobile apps and more,” he said. “Anything that leverages public/private keys — which is a lot — is fair game.”
Torus Labs launched its testnet earlier this year and recently opened up its public beta for Ethereum-based DApps. The company said it will be supporting more smart contract platforms in the future, starting with EOS and Tron.Bitcoin Magazine reached out to Torus for comments but did not receive a response in time for publication.
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