Hey HN, this is Colton and Jason Dillion, the co-founders of [Hedgehog](https://hedgehog.app), sharing the latest upgrade we've been coding: on-chain, self-custody wallets using secure multi-party computation ("MPC") to trade automatically in the background! Watch the [short demo](https://youtube.com/shorts/B4feHLdcZyM). We know HN isn’t always aligned on web3 projects, but we think this release showcases the best parts of web3, utilized with purpose, instead of being a buzzword justifying dumping our bags on retail. Plus, we registered with the SEC* for accountability, unlike many other projects out there, so you know our hearts are in the right place. Before we talk about some of the challenges we’ve faced to get here, we want to share some key benefits: - The wallets are self-custodial, so if our business ends for some reason, your wallet continues to live on, no migrations required. Pick up your private key shards and reconstitute the key or Snap into MetaMask! - Being close to the key entropy means we can generate signatures and addresses for any ECDSA-compatible chain. Unlike EVM-based account abstraction solutions that are limited to one virtual machine and need to be redeployed on each network, our MPC wallets are easily expandable to support Cosmos IBC, Bitcoin L2s, Doge, and many more. - Our dear friends at [Capsule](https://usecapsule.com) are powering the MPC, so between us you have adjustable capabilities regarding what permissions to provide and which types of transactions third-parties can co-sign, and you can withdraw third-party access at any time. Pretty cool, right? And this is only the beginning, our goal is to slowly decentralize out to networks of key hosts and registered solvers that plug into the relevant jurisdictions to ensure that everything is above board from a compliance perspective, and to make interacting with web3 simpler by abstracting away the inventory and network management that plagues web3 applications today. If you’re interested in building this future, please do reach out! # Zero to one The last three years haven’t been easy. Since our summer 2021 YC batch, we raised a round of capital and immediately jumped into a very scary time for web3 companies. 3AC imploded, FTX defrauded its customers, Terra Luna network collapsed under TUSD—if your product or your capital was tied to any of these firms or their customers then your business probably fell to the resulting contagion. To make matters worse, suddenly the fundraising environment became adverse with the slow fade of COVID-era interest rates and their coincident ZIRP. While we lucked out with our choices of partners, as we didn’t hold capital at any of the institutions that folded, we did not escape unscathed. In January of 2023, our banking partner, with whom we had signed an ODFI agreement under the full approval of the CFO, withdrew from our program unexpectedly. Apparently the Fed and the OCC had released a letter asking chartered institutions to stop doing business with digital asset companies. Shortly thereafter, Silvergate, Signature, and SVB were all declared insolvent and the FDIC had to increase its insurance limits. Sentiment was at an all time low for web3, and being an investment adviser exclusively focused on digital assets was a tough position to be in. Nonetheless, we persisted, believing that eventually the industry would mature, sensible regulation would be implemented, and the true use-cases for web3 primitives would emerge. Which is exactly when the SEC sent us a notice of examination. Fortunately, we were able to quickly address the short list of deficiencies from the SEC, and they chose not to give us any Wells Notices in the last twelve months since we submitted our final response. But then another tragedy struck: our co-founder requested leave to take care of his health and ultimately chose not to rejoin us. |