For this month's project review, we are featuring NGRAVE, one of our portfolio companies with a mission to empower crypto investors and blockchain advocates to safeguard their wealth through next-generation hardware wallets and key backups.
This review will share more background information on the project, an analysis of the role of security and hardware wallets in light of the current crypto era, and finally, our thesis behind why we like this project and where we see room for improvement.
What is NGRAVE?
NGRAVE offers the first complete solution for self-custody, consisting of three essential parts:
- ZERO, the connectionless touch-screen hardware wallet.
- LIQUID, the mobile app that connects users in real time to the blockchain.
- And GRAPHENE, the stainless steel encrypted and recoverable backup ensures users never lose their keys.
Combined, all three solutions allow crypto investors to experience an end-to-end, easy-to-use self-custody solution from key generation to backup recovery. Furthermore, set to empower people to master their wealth most securely and efficiently, the NGRAVE team complements its wallet products - ZERO, GRAPHENE, and LIQUID - with educational content teaching people about cybersecurity risks, hacker malpractices, and the web3 ecosystem.
Find out more about cybersecurity and protection in NGRAVEs academy ➡️ here
With security at the project’s core, ZERO is the first crypto hardware wallet to achieve the world's highest security Operating System (OS) (EAL7). This high level of security is recognized across strong markets such as; the U.S.A, France, Canada, Germany, and more. In comparison, Apple Pay achieved an EAL5 security level, and ID and credit cards an EAL5 chip. Ledger Nano, another hardware wallet maker, also achieved an EAL5 chip security level, making NGRAVE the “coldest” wallet on the market.
Back in 2018, co-founders Ruben Merre (CEO), Xavier Hendrickx (CTO), and Edouard Vanham (COO) brought NGRAVE to fruition after a series of personal and professional encounters with crypto hackers. Notably, Hendrickx, an early investor and believer in blockchain technology, became a victim of several high-profile hacks, including the Mt.Gox hack in 2014. He also worked for Swarm City (previously Arkade City), a company impacted by the Multi-Sig Parity Hack. Swarm City lost 44,000ETH (around $32M back then) but was able to render around $208M due to Hendrickx's quick realization of a security breach, allowing them to return funds to various projects impacted by the hack.
In light of all these events, coupled with the fact that over 50% of crypto investors still leave their assets vulnerable due to unsafe security practices, the co-founders of NGRAVE made it their passion and mission to empower crypto users to safeguard their wealth.
Since the start of the project, the team has raised $6M in seed capital from investors such as DFG Group, Spark Digital Capital, Morningstar Ventures, and more. Recently, Binance announced a strategic investment in the hardware wallet maker and that they will be leading the project’s upcoming Series A round. The wallet was also awarded the “Crypto Wallet Solution of the Year” in 2021 at the AIBC Summit in Malta.
Role of security and hardware wallets in light of the current crypto-era
Since the beginning of November 2022, the crypto industry has experienced turmoil due to the bankruptcy of FTX. Investors, builders, and even non-crypto natives have put crypto security under a lens leading to many rethinking how they engage with the ecosystem. Furthermore, since 2012, at least 47 cryptocurrency exchanges have been hacked, and this year alone, around $3 billion have been lost due to hackers, making it a record year for hacking. As a result of all this, hardware wallets have seen an uproar in interest from many.
The topic of custody has come hand-in-hand with security as investors rethink where and how they want to store their assets. For a brief background, hardware and digital wallets allow you to own your coins through your private keys and recovery seed phrases, both classifying as non-custodial. Exchanges are different as they often use a proxy, such as a password or SMS code, to let you log into their platform, classifying them as custodial.
How does NGRAVE work?
In the case of NGRAVE, the team developed ZERO, the genesis hardware wallet communicating fully offline through one-way QR codes. No wifi, USB, NFC, or Bluetooth is needed to use the device. Alongside ZERO, the team developed GRAPHENE - two stainless steel backup plates for users to punch their “Perfect Key” - NGRAVE’s version and evolution of the 24-word key - into physically. And LIQUID - a mobile app storing all public information synced to ZERO via QR code.
Let's say one were to purchase an NGRAVE hardware wallet; here are the steps as to how you would set it up:
- Based on True Random Number Generation (TRNG), ZERO generates your Secret Key Phrase, biometrics (fingerprint), and photon measurements of the ambient light. This is done to remove backdoors in the chip, which essentially reduces the risk of giving third parties knowledge of the value of your key.
NGRAVE calls the secret key the “NGRAVE Perfect Key” it’s a 64-character hexadecimal equivalent of the 256-bit master seed and the 24-word seed phrase, allowing for a more secure backup and a recovery method in case of losing both the hardware device and the backup. The user can choose to convert between the two formats; hence the user can import 12 or 24 words and create a 24-word seed phrase.
The team has also created an onboarding video and manual for ZERO
Watch the video ➡️ here
Learn about how to get started ➡️ here
- If you buy the optional GRAPHENE plates, you must punch your secret key into the encrypted layers. The top layer acts as the decipher plate, whereas the bottom layer has punched holes. NGRAVE suggests hiding these plates in two places. NGRAVE is the first wallet to provide a stainless steel plate; other wallets use paper solutions.
Watch the video and learn more about how to get started with GRAPHENE ➡️ here
- With your smartphone, you sync ZERO to the mobile app LIQUID via a QR code. All public information, such as wallet addresses, and transactions, are on the app, but your private key and assets remain offline on ZERO.
Watch the video and learn more about how to receive transactions ➡️ here
- Once set up, you can send funds to your wallet via QR code or copying wallet addresses, check your portfolio, and securely sign transactions.
NGRAVE supports over 1,500 ERC20 tokens, USDT, HEX, MANA, WBTC, SAND, and 13 blockchains, including BTC, ETH, EGLD, XRP, SOL, and more. In the upcoming months, the team will add support for AVAX, ESDT tokens (MultiversX chain), BSC tokens (Binance chain), and MATIC.
Backing up the back-up
Around 20% of Bitcoin that has been mined is lost due to investors losing private keys, forgetting their passwords, or misplacing their hardware wallets. NGRAVE is well aware that human error and other outside factors can cause issues with either damage, loss, or theft of hardware wallets. Therefore, the team thinks in “what if” scenarios and has back-ups for back-ups to ensure that even if a “human error” occurs with one's wallet, people can still access their digital assets.
For example, when the team was creating GRAPHENE, they thought of all possible issues they could face and solved the following “what if’s”:
- What if I spill water on my backup, or my house burns down? GRAPHENE replaces paper wallets, as GRAPHENE is made of stainless steel. Thus, it doesn’t burn nor get destroyed by water.
- What if someone finds my backup? GRAPHENE is encrypted with a backup that will make it difficult for thieves to decipher.
- What if I lose my backup? GRAPHENE is recoverable by the team without third-party risk
To further dive deep into the team's “what if” mindset, read their article on What if NGRAVE goes out of business➡️ here
Our analysis
With almost four years of growth, NGRAVE has brought to market a product for the greater good of the crypto community. ZERO, GRAPHENE, and LIQUID all cater to ensuring that crypto asset investors can manage their wealth securely. Diving deeper into the project, here are our thoughts on what we think makes NGRAVE a substantial project:
- Security, trust, interoperability, and transparency are all core values of blockchain and the whole web3 ecosystem. Investors, builders, and others in crypto are looking for solutions to match those values. Since recent news, hardware wallets have been trending (according to google search), proving that asset holders are looking for a safer way to store their wealth. The global hardware wallet market reached $442M in value in 2021, with 2022 marking one of the strongest for unit sales, growing closer to the $1B mark in 2022. NGRAVE stands in front of a growing industry, which could present more opportunities in the coming years. The recent partnership announcement by Binance is a validation of the team’s products at a time when it is needed the most.
- NGRAVE sets an industry standard by being the first hardware wallet in the Metaverse at last year’s Metaverse Fashion Week. In 2021, the Metaverse had an estimated global market size of $38.85 billion and is estimated to grow approx. 40% (CAGR) between 2022-2030. More projects are expanding and building Metaverse products and are looking to grow in the space. NGRAVEs compatibility makes them a pioneer and front-runner compared to other hardware wallets.
- A strong and experienced team with multiple accreditations and long-time experience in crypto. The CEO was part of Belgium's 40u40 and tech entrepreneur lists. NGRAVE CTO is a crypto veteran since early 2012 and part of the rescue mission of 208M dollars in the parity Multi-Sig hack. Finally, the COO is a strong operational expert. The team is backed by industry pioneer Jean-Jacques Quisquater, a world-renowned cryptographer who has been writing about blockchain since the 80s. He is also a hardware security expert.
Despite the growing market, there are a couple of factors where we see potential room for growth for NGRAVE.
- The adoption of hardware wallets is still significantly lower than digital wallets. For example, Ledger currently has 4 million users, were as the self-custodial wallet MetaMask has 30 million. Nevertheless, the crypto space has shown remarkable adoption; in 2021 alone, the global crypto population grew by 178%, rising to 295 million. With this being said, there is room for growth for the whole hardware wallet market, as if the percentage of sales increases compared to the unit of growth in the full crypto market (i.e., 178%), that could mean millions of more sales for hardware wallets.
- At the moment, there is a consensus that hardware wallets are the most secure place to store your assets. Nevertheless, despite its security, there is still a “debate” if hardware wallets are needed compared to digital wallers. Therefore, adoption is still low because of the tendency to turn to digital wallets. Furthermore, digital wallets are usually free, whereas hardware wallets come with a higher price and are not immediately available, for example, downloading an app or web extension within minutes. On the other hand, NGRAVE offers next-day shipping to everywhere in the world and is already very established in its supply chain. As the hardware wallet market is rising, given recent news around FTX, a strong opportunity is on the rise for NGRAVE.
What’s next for NGRAVE
As security, ownership, and convenience become ever so important in the web3 space, NGRAVE is set for a market ready to be educated on more topics around cybersecurity and digital asset management. Whether or not more people head for hardware wallet adoption is yet to be defined; nevertheless, the team has exciting initiatives ahead. Starting with the announcement from Binance on leading NGRAVE’s Series A round to their currently in-progress MetaMask integration.
Learn more about NGRAVEs upcoming roadmap ➡️ here
Learn more about NGRAVE ⬇️
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