Ethereum Startups Team to Offer 'Banking-Grade' Wallet Security

Two ethereum startups have teamed up to help bring bank account-like protection to users of the second-largest blockchain.

Insurance cooperative Nexus Mutual and wallet provider Argent plan to offer a combination of smart contracts and insurance to keep Argent users' funds safe from hackers.

First, the smart contract is designed to prevent thieves from draining a wallet by temporarily freezing transfers above a daily spending limit to addresses that aren't on the user's white list.

"We are thinking about not just crypto users but also new users - and so the end goal is to repeat what they get from their bank," said Argent co-founder Itamar Lesuisse.

In case the smart contract fails to do its job, Nexus and Argent are forming a fund that would insure its members against losses.

To participate, users would have to stake Nexus' NXM tokens, for which they would receive rewards.

To be sure, this isn't quite the same level of protection as FDIC insurance, which is backed by the full faith and credit of the U.S. government.

Proud to be promoting belt-and-braces protection for users of the wallet, Lesuisse said Argent would also be first in line to eat his own dog food and stake NXM against the wallet's own smart contracts.

Looking ahead, Karp said another key area to cover is the assets locked up in DeFi smart contracts.

"Obviously, these are fairly hardened contracts but more and more are coming and there is still a non-zero risk that they could have a bug."