Safe: Revolutionizing Digital Asset Ownership with Smart Accounts on Ethereum

Modified on Thu, 2 Oct at 6:59 PM

Get to know Safe

Safe, a digital asset management platform developed by Gnosis Limited, enables consumers and institutions to store cryptocurrencies and assets using multisig contracts.

Safe has evolved into a smart account infrastructure, the largest in the industry. With over 8 million accounts, Safe has developed the Lindy smart contract on Ethereum, which supports over $100 billion worth of digital assets. The Safe ecosystem boasts over 8 million user accounts and more than 200 platforms.

What is Safe? — The History of Safe

Safe originated as an internal project of Gnosis focused on developing an independent ecosystem through a spin-off. Launched in 2016, the Gnosis project aimed to utilize prediction markets on the Ethereum network. However, due to a lack of suitable products at the time, Gnosis began building its own infrastructure, including projects like Cow Swap, Gnosis Chain, and Gnosis Pay.

Safe’s development stemmed from Gnosis’s ICO in early 2017. Following the token sale, Gnosis required a secure solution to safeguard its assets. With no suitable options available, Stefan George developed a user-friendly multi-signature wallet. This wallet was later released as open-source software under the name Gnosis Multi-signature Wallet.

Due to the popularity of ICOs, the Gnosis Multi-Signature Wallet saw widespread and rapid adoption. Within a few years, it became the industry standard for multisig wallets, securing over $1 billion in assets.

In late 2018, Gnosis Safe emerged as a versatile Smart Account. This development proved to be ahead of its time, introducing a mobile wallet with a significantly improved user experience and lower costs. Gnosis Safe continued to gain traction until 2022, when it transitioned into a Decentralized Autonomous Organization (DAO) called SafeDAO. SafeDAO’s focus is on ecosystem development. In 2023, they launched developer tools under the name Safe{Core} and surpassed the milestone of 1 million Safe Smart Accounts created.

Today, in 2024, Safe has evolved into a smart contract securing over $100 billion in assets. This evolution has facilitated the creation of more than 7 million Safe Smart Accounts, which now support global applications like Worldcoin and Gnosis Pay. Additionally, over 200 projects are working collaboratively with Safe Smart Accounts.

How does Safe work?

To understand how Safe works, it’s crucial to have a fundamental grasp of Ethereum’s wallet system. There are two primary types of accounts on Ethereum: Externally Owned Accounts (EOAs) and contract accounts. EOAs are essentially standard Web3 wallets, like MetaMask, that utilize public and private key pairings. These wallets empower users to access and manage their digital assets on the blockchain network. For example, you can leverage MetaMask to transfer BTC to another address or create a smart contract to facilitate NFT creation.

However, while EOAs are fundamental for managing digital assets, they have limitations and may not be ideal for all users. Limited security or inflexibility could hinder wider adoption.

Safe addresses these challenges by leveraging smart contracts to create multi-signature wallets with multiple access keys. A standard multi-sig typically has three owners, each with their own key. Any transaction requires approval from at least two-thirds of the owners. This approach empowers users to authorize transactions through hardware wallets, EOAs, or even the Safe app itself.

What is a Smart Account?

Smart accounts represent a new paradigm for Ethereum security, aiming to transform its legacy account system. While currently, users interact with Ethereum through Externally Owned Accounts (EOAs) for transaction verification, smart accounts leverage smart contracts for enhanced security and functionality. This approach tackles long-standing user experience (UX) and security challenges, including enabling cross-chain interoperability. In 2023, Ethereum adopted ERC-4337, a standard that empowers user accounts to function as smart contracts, significantly expanding their capabilities.

Benefits of Smart Accounts

The shift from EOAs to Smart Accounts represents a significant leap forward, akin to the evolution from mobile phones to smartphones. This advancement unlocks development in several areas.

Smart Accounts empower users with greater flexibility, allowing them to tailor usage to their individual needs. This innovative technology enhances Ethereum’s security and User Experience (UX) by offering features such as:

Multisigs: A wallet controlled by multiple private keys that may be controlled by different people or companies.
Batched transactions: creating smoother DApp interactions. Multiple onchain operations can be performed in a single transaction.
Sponsored transactions: allowing applications or the entire network to provide gas support, improving user experience on web3.
Key rotation: removing keys on the account. This makes it possible to exchange keyholder settings without migrating to a new account.
Automation replicates: a well-known form of automation on Web2 or traditional financial systems such as subscriptions.
Security mechanisms: enabling onchain security features, such as allowing or denying malicious smart contracts.
Hybrid custody: allowing accounts to be jointly managed by third parties It is activated in a recovery manner or prevents fraud.

Highlights of Safe

Safe’s core focus is on making digital account ownership available to everyone by creating open and universal for holding assets. These standards are universal for holding assets, data, and digital identities. The goal is to create Smart Accounts as the default Safe accounts, focusing on the main functions as follows.

Safe {Core}

At the heart of the Safe Ownership layer lies the Safe Smart Account, which combines a secure ecosystem with robust blockchain interoperability. The Safe Smart Account prioritizes both security and flexibility, raising the security bar for both general users and institutional-level accounts. This allows Smart Accounts to be leveraged with peace of mind for long-term investments with minimal risk.

Safe {Wallet}

Safe {Wallet} acts as a user interface for Safe Smart Accounts, providing an advanced security system. Utilizing multi-signature technology, it offers a user-friendly interface catering to a wide range of users. This ensures a smooth and secure experience for managing digital assets.
Safe {Wallet} is constantly evolving, offering features like multiple private key access rights for key owners and enhanced security without compromising asset access. Users maintain complete control and protection of their assets, with the added benefit of multi-signature functionality allowing for joint account management.

Supply and Token Distribution

The SAFE token has a unique approach to distributing coins and allocating them to the community. The details of its token management (Tokenomics) are as follows:
SAFE tokens have a maximum total supply of 1 billion (1,000,000,000) SAFE.

As of June 23, 2024, approximately 50.22% are currently in circulation. Core contributors currently hold 15.88% of the circulating supply, while the Safe Foundation holds 7.47%

Token management can be divided into 5 types:

Community (60%): This allocation is divided among three groups; SafeDAO (40%) GnosisDAO (15%) Joint treasury between SafeDAO and GnosisDAO (5%)
Core Contributors (15%): Rewards for current and future core contributing teams.
Safe Foundation (15%): Divided into Strategic Raise (8% for strategic partners and industry experts) and Grants/Reserve (7% to support the ecosystem).
Ecosystem (5%): Incentivizes participation and use within the Safe ecosystem.
Users (5%): Rewards for active users in SafeDAO for their participation in various activities.

SAFE Token Overview

SAFE is a governance token for SafeDAO, serving the interests of the community and stakeholders within the Safe ecosystem. This ensures the ecosystem’s continued functionality and sustainability.

SAFE token holders can participate in SafeDAO governance by voting with unvested and uncommitted tokens. In other words, tokens used in previous votes or currently locked in staking contracts are not eligible for voting.

For future enhancements, Safe aims to empower all tokens in the future, particularly for projects in early stages. For instance, locked SAFE tokens could offer increased rewards for participants who contribute to activities aligned with Safe’s goals. This could include ecological initiatives and a wider range of activities.

Interesting Information about SAFE

According to Coinmarketcap on 23 June 2024, SAFE coin ranks 105th among all cryptocurrencies. Its market capitalization is $626,663,700, which is approximately 22,911,209,533 baht.

At the time of writing this article, SAFE is currently trading at approximately $1.47, or 53.68 baht per 1 SAFE. It previously reached its all-time high of $4.01 (Approximately 147.18 baht) on 23 April 2024.

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