.png)
In our thesis article on smart accounts last year, we wrote that smart accounts will be modular, specialised and multichain.
Safe represents the realisation of our thesis on account abstraction. In this article, we share why we invested in Safe, and why we believe Safe represents the future of asset ownership.
In the ICO era, Safe (then, Gnosis Safe) satisfied a key pain-point in the market: companies could not entrust their millions raised from ICOs to a seed phrase. Instead, funds can be stored on a multisig smart account, allowing for transactions to only be executed once a customisable threshold of signatures is reached.
The solution was initially built for Gnosis’s own ICO, and quickly became adopted by many other projects in the space. DAOs, funds, and other institutions stored millions’ worth of their assets in Safe contracts, kicking off the Lindy effect that remains strongly prevalent today.
Since then, Safe TVL has grown past $100b.
To put that number into perspective, $100b in TVL surpasses all other smart contract platforms including Ethereum and major TradFi players such as Robinhood.
With initiatives such as Recovery Hub introducing new ways for account recovery and modules such as *Roles Modifier* allowing for granular access control, we believe that Safe will not only maintain, but strengthen its status as the #1 self-custody solution for the ever-growing number of organisations on-chain.
As the dominant player amongst on-chain organisations already, Safe making its mark to onboard individual users through Safe smart accounts.
According to BundleBear, 4.6m non-Safe smart accounts have been deployed, with ZeroDev’s Kernel leading with 2.8m accounts.
Safe, in comparison, has created 8.3m accounts to date - the majority of which are 1/1 signers. While Worldcoin represents a large proportion of these accounts (at most 50% if we assume all Optimism-based Safe accounts are Worldcoin accounts), Safe would still have deployed at least 4.1m accounts after discounting all accounts deployed on Optimism.
The use cases of Safe accounts are widespread, including:
Safe accounts are also more active and sticky compared to the average ERC-4337 account.
The modular nature of Safe smart accounts makes them infinitely extensible, limited only by developer imagination. While bundled and sponsored transactions improve UX, we believe that smart accounts can only surpass EOA adoption if they are augmented by modules that truly 10x user experience.
Safe hosts the most robust module ecosystem for smart accounts in Web3. When we recruited for the Safe {AAccelerator} cohort last year, we received over 100 applications from developers building in the Safe ecosystem, the majority of whom were building modules, such as:
We expect more modules to be built & adapted for the Safe ecosystem not only by specialised module developers, but module registries such as Rhinestone.
With the most robust module ecosystem, Safe is well-positioned to create the most extensible smart account in Web3.
Modules are also capable of incorporating AI into smart accounts. Polywrap, for instance, is building the AutoTX module for Safe accounts to leverage AI agents for on-chain transactions.
Autonolas is building autonomous Safes, so that Safes can host AI agents capable of managing funds, relaying transactions, and reporting off-chain data (oracles) without human input. As quoted by the Autonolas team, the first autonomous Safes have already been built:
El Collectooorr 4 – here a Safe autonomously watches for new generative art drops on Art Blocks and intelligently collects works, before dropping them into a fractionalized vault, owned by depositors.
Autonolas Contribute 3 – here a Safe is used to coordinate off-chain agents as they automatically track off-chain actions and log leaderboard points. Leaderboard points will soon be logged on Ceramic. Individuals’ contributions are visualized via dynamic NFT, also coordinated via the Safe.
Autonomous Fund 7 – here a Safe autonomously manages a new Balancer Managed Pool to execute a trading strategy based on the Crypto Fear and Greed Index.
We anticipate that the exponential growth of AI agents, coupled with ecosystem projects at the intersection of crypto & AI, could change the way we interact with Web3 through Safes.
The fragmentation of liquidity across alt-EVM chains and roll-ups is arguably the biggest UX problem in Web3 today. In Vitalik’s Three Transitions article, he proposes a keystore contract hosted on a certain chain to store smart account rules and enable smart account interoperability.
As the most trusted suite of smart contracts in crypto, Safe is poised to launch a keystore rollup to realise Vitalik’s vision. Network abstraction is Safe’s #1 priority this year, and they have already acquired Multis to build cross-chain smart accounts while initiating plans to launch a keystore rollup.
We believe that executing this strategy can reprice Safe as an asset and address the largest problem space in Web3 today.
Smart accounts will be modular, specialised, and multichain.
As users transition to smart accounts, Safe will be the ownership layer of Web3.