After 6 years, 1 million hardware users, and 15 million wallet users, what is SafePal, once labeled as "Binance," preparing to do next?

Written by: Tyler

What is your first impression when talking about "hardware wallets" today?

Is it the overseas veteran manufacturers like Ledger and Trezor, or the more familiar latecomers in the Chinese-speaking region like OneKey and imKey?

Over the years, while Ledger and Trezor are well-known, they have long been criticized for their user experience. On-chain Degens should be familiar with the fact that SafePal launched a new hardware wallet product as early as 2019, leveraging its background in software and hardware and mature supply chain resources to solve the "difficult to use" and "too expensive" problems of Ledger and Trezor.

Although SafePal may seem to have low visibility among ordinary users in the Chinese-speaking region, it has already built a reputation and brand overseas and is well recognized among hardcore crypto players in China. Notably, in 2021, SafePal launched SFP through the Binance IEO Launchpad, further familiarizing many Chinese-speaking users with the brand.

It is worth mentioning that SafePal, as the first hardware wallet project incubated by Binance, is also the only wallet project that has received investment from Binance and appeared on Binance Launchpad. In its early development, it benefited from a close relationship with Binance and still holds a unique advantage in deeply integrating Binance services (such as spot contract trading, fiat deposits and withdrawals, etc.).

As of the time of writing, SafePal's business has covered hardware wallets (S1, S1 Pro, and X1), software wallets, browser extension wallets, and compliant banking services, meeting different user needs and providing comprehensive crypto asset management solutions. The newly launched cryptocurrency-friendly banking channels and Visa cards are planned to further expand the boundaries of Web3 wallet financial services.

How did SafePal enter the wallet track in 2018, why did it initially choose the relatively less popular hardware wallet, and how has it gradually expanded to a full product line? What considerations and layouts are behind the upcoming launch of compliant bank account services?

This article organizes the transcript of a recent interview with SafePal co-founder and CEO Veronica Wong for readers.

Entering at the End of a Bull Market: "Wallets are the Key Link in Web3"

Q: What were you doing before you got involved in Web3? What led you to the crypto industry, and what prompted you to dive into the Web3 wallet track and create the SafePal project?

Veronica Wong: Before getting involved in Web3, most core members of the SafePal founding team had worked for many years in Web2 tech companies, and we generally belong to a more "tech-savvy" group.

I came across the Bitcoin white paper in 2017 and was technically intrigued by the decentralized model it described, especially the part about users having complete asset and data ownership, which actually subverts the traditional internet business model of "monetizing user big data." At that time, friends also discussed not to overlook Bitcoin. As we all know, 2017 was a big bull market, and Bitcoin prices were on a "rise, rise, rise" trajectory, with stories of getting rich flooding the market.

When we discussed Web3 entrepreneurial directions at the end of 2017, the ICO bull market was actually nearing its end, but we observed an interesting phenomenon: despite the secondary market's sharp decline and widespread despair, the number of independent addresses on Bitcoin and Ethereum was still growing exponentially. This confirmed our judgment that "group consensus cannot regress." Combined with the immutable and intermediary-removing properties brought by blockchain technology, we believed its adoption could become mainstream in the future. Once decentralization and on-chain asset circulation become mainstream, wallets will play the most important role as a portal and channel, being the key link to user engagement.

Q: How was the core team of SafePal formed? What is the current member structure?

Veronica Wong: As mentioned earlier, most members of the SafePal team have years of Web2 backgrounds. In addition to experience in major internet companies, they also have hardware development and supply chain experience, which is an advantage in our team structure.

Currently, the team has about 100 members from different countries, as an international background helps meet the needs of users in different regions. The overall atmosphere is primarily product and research-driven, with a strong technical environment, where 70% are product and R&D personnel and 30% are marketing personnel. The collaboration among team members is very harmonious, and even with remote work, we maintain an iteration speed of releasing a new version every two weeks.

Why Choose to Enter from "Hardware Wallets"?

Q: SafePal initially launched hardware wallet products and was one of the earliest players in the hardware wallet track. What considerations led you to prioritize the hardware wallet field?

Veronica Wong: This was the first question we considered after deciding to enter the wallet track. Objectively speaking, developing a software wallet with basic functions poses almost no significant technical barriers, so starting with a software wallet is indeed a relatively easy entry point, which most wallet players have followed.

However, SafePal chose to enter from the hardware wallet side for several special considerations:

First, we felt that the hardware wallet track at that time was an under-competitive market. Looking back at early 2018, we found that the software wallet track already had many players, such as Trust Wallet acquired by Binance, MetaMask, and the well-known imToken in the Chinese-speaking region; however, the hardware wallet track only had Ledger and Trezor.

We also purchased and experienced products from these two hardware wallet manufacturers, and our first impression was that they were too expensive—Ledger and Trezor products were priced at $99, and with shipping and customs duties, the costs would be even higher. Additionally, the user experience of these two companies was also unsatisfactory, especially their button input method, which was a disaster for many users who were not accustomed to it when entering passwords.

Secondly, our team possesses both software and hardware development capabilities and has years of supply chain resources and advantages, giving us confidence that we could create differentiated and competitive products in the hardware wallet field. This was also our initial motivation for choosing to enter the hardware wallet area.

Moreover, before the DeFi Summer began, the business model for software wallets was not clear, while the profit model for hardware wallets was very clear, similar to e-commerce selling goods, which presented us with a huge opportunity.

Thus, we decided to start with hardware wallets, and once we established a foothold in the hardware market, we would gradually expand into software wallets.

Q: Can you introduce the dimensions covered by SafePal's current product line? What has been the development rhythm of these businesses?

Veronica Wong: I can briefly outline the timeline.

• In 2018, we entered the hardware wallet space and began designing and auditing our first hardware wallet;
• In May 2019, SafePal S1 was launched for sale, and it became profitable on the first day, allowing the team to feel secure;
• In May 2020, our software wallet went live, allowing users to use it without purchasing a hardware wallet;
• Before the DeFi Summer bull market started in 2020, we gradually laid out on-chain Swap and cross-chain bridge functions, leading to exponential user growth after the DeFi Summer began, quickly surpassing the 2 million user threshold;
• In 2022, the SafePal extension wallet was launched, completing the full product package layout, allowing users to have a consistent experience on both the app and extension sides;

In 2023, we also launched the Bluetooth hardware wallet SafePal X1, which has an open-source and audited Bluetooth protocol, aiming to provide users with diverse choices. By 2023, the entire product line of SafePal wallets was gradually completed.

This year, we made some bold attempts, such as opening banking services for the European region in March, providing users with compliant Swiss bank accounts that can be used for daily consumption payments, addressing the pain points of compliant deposits and withdrawals, and connecting fiat and cryptocurrency channels, which is strategically significant.

Additionally, we recently launched a small wallet on Telegram, which is the fourth type of wallet following hardware wallets, software wallets, and extension wallets, aimed at solving users' pain points in asset trading across multiple chains and scenarios, making the product closer to users.

Overall, the core of our product design philosophy revolves around user needs and solving user pain points. For example, in terms of fiat deposits and withdrawals, we have connected the flow and transfer channels across multiple chains, including Swap and cross-chain bridges. We have also launched some small features, such as the "Gas Station" function for converting different currencies and a Gas payment feature in Swap to help novice users who struggle without Gas.

We continuously improve our products, not by planning every year's development from the start, but by adjusting based on user needs and the problems encountered during the process, forming today's landscape after 6 years.

Binance: The "Accelerator" of SafePal's Early Development

Q: SafePal became a hardware wallet project supported and invested by Binance as early as 2018, and subsequently deeply integrated into the Binance ecosystem in wallet trading and other functional services. What specific changes and advantages has Binance's investment brought to SafePal?

Veronica Wong: Wallets, especially hardware wallets, are a long-term business that requires continuous accumulation of brand reputation and trust. Leading hardware wallets in overseas markets began brand building early, thus gaining a certain market penetration in North America and Europe based on their first-mover advantage.

In September 2018, SafePal was the only wallet brand selected for the first batch of the Binance Labs incubator program, undergoing a 10-week incubation in San Francisco. Subsequently, we received investment from Binance at the end of 2018, and in the first half of 2019, we officially launched our first hardware wallet product.

Binance's early investment provided us with strong brand credibility, significantly lowering the trust threshold for users towards SafePal as a "newcomer," increasing conversion rates, and allowing us to gain a large number of seed users and fans in overseas markets, especially in North America. This is also why many domestic users still consider us an overseas brand.

After that, we were able to access the industry's highest quality ecological resources, including extensive cooperation with Binance, where we conducted deep integration at the product level. Those who have used or are familiar with SafePal may know that our wallet deeply integrates Binance's spot and contract functions, while also lightly integrating Binance's fiat deposit and withdrawal channels. This means that users can share Binance's trading liquidity and deposit/withdrawal channels in a one-stop manner within the SafePal wallet, essentially meeting daily trading needs.

Additionally, many users in the Chinese-speaking region may have first heard of us because we were one of the earliest wallets to respond to Binance's on-chain construction and support the BSC ecosystem. This brought us a significant wave of on-chain traffic and attention. At that time, PancakeSwap users preferred SafePal to transfer assets from Ethereum to BSC, helping users transfer nearly $1 billion in assets from Ethereum cumulatively.

Q: Regarding the current state of SafePal's business development, is there any information you can share in terms of data dimensions (user scale, partners, etc.)?

Veronica Wong: Currently, our total user count has exceeded 15 million, with hardware wallet users accounting for a relatively small proportion, around just over 1 million, while software wallet users make up the vast majority.

In terms of regional distribution, users from Europe and North America together account for more than half, with North American users being the majority. This is understandable, as the United States and other developed countries like France, Germany, Italy, and Spain are our main markets.

The Asia-Pacific region accounts for about 25% of our user base, while South America is one of the fastest-growing regions for our users. This distribution may be related to our early hardware wallet strategy and the team's focus on expanding into overseas markets, which is also benefited by our team's international background.

6 Years, Full-Stack Wallet Products, Zero Security Incidents

Q: Security is undoubtedly the lifeline of a wallet. SafePal has never experienced any security issues through multiple bull and bear markets. What key technologies and measures do you think have played a crucial role in ensuring security?

Veronica Wong: In fact, after we initiated the project to create our first hardware wallet in 2018, we completed the production of the first prototype and passed functional testing in less than six months. However, our first hardware wallet, the S1, officially debuted in May 2019. During this period, we spent a significant amount of time conducting security attack and defense testing and security audits.

At the Chaos Communication Congress held in Germany in early 2018, a European white hat team publicly hacked the hardware wallet products of Ledger and Trezor. Before our hardware went into mass production, we invited this white hat team (later renamed KeyLabs, which also joined the Binance incubator) to conduct multiple rounds of security audits covering both hardware and software aspects. After the audits, we identified issues and made optimizations, adding more security measures. Therefore, from the project initiation, prototype production, to the actual mass production and final sale in May 2019, we spent a year and a half continuously refining the product and solidifying its security.

With the product launch, our hardware products gradually gained attention in Europe and the United States. In 2020, Kraken's security lab conducted black box testing on our hardware wallet. Interestingly, they purchased several hardware wallets from our official website as ordinary users without prior notice and conducted comprehensive testing over about five months. They then contacted us to inform us of the situation and indicated that they would disclose a report, which found no high-risk issues related to private keys and authorizations. This report is still available online, and SafePal provided an official response and further explanation regarding this report on our blog.

These events demonstrate that our hardware wallet products possess high security in both hardware and software aspects.

Q: In the context of the ongoing evolution of the "dark forest" on-chain, what measures can be taken or what areas can be invested in to effectively ensure user security on-chain?

Veronica Wong: Security attack and defense is a continuous process. With product iterations, the security system also needs to evolve and strengthen continuously. In our view, security is a multi-dimensional project that cannot be simply generalized by the security of a specific function. It includes at least three dimensions: product security, internal security, and user usage security. Product security has already been mentioned and is the aspect that people are most instinctively concerned about. However, the latter two dimensions are often overlooked and are the main sources of most hacking and fraud incidents in the industry.

For example, in terms of internal security, we have drawn on the internal security and risk control mechanisms of the financial industry, designing different aspects such as permission management, system isolation, risk control alerts, anomaly tracking, operation records, and data disaster recovery to eliminate potential internal security vulnerabilities. At the same time, in the face of external threats such as hackers, phishing, and malicious contracts, we actively engage in external cooperation to jointly combat malicious attacks. For instance, we have collaborated with GoPlus to build a database to provide users with timely security information alerts.

Regarding user experience security, we feel that merely ensuring product security is not enough. Due to the immutable nature of blockchain transactions and the non-custodial nature of assets, user behavioral security and good asset management habits are equally crucial, and may even require more attention than product security. For example, we have found that most user-reported loss issues are actually due to human factors, such as sending funds to the wrong address or losing private keys. Therefore, we have continuously embedded various security reminders and user education mechanisms into our products. For scenarios where users might make mistakes, such as sending funds to the wrong address, first-time contract authorizations, accessing suspicious DApps, copying suspicious addresses, or receiving unknown airdrops, we provide additional security guidance and reminders in the app to eliminate security risks at the source of user on-chain interactions.

At the same time, SafePal actively combats counterfeit accounts, regularly reporting and taking down phishing links, malicious DApps, and fake accounts. Since January of this year, we have reported and banned over 800 phishing links, malicious DApps, and counterfeit accounts. Additionally, we have actively conducted user education campaigns related to security in collaboration with ecosystem partners, investing significant effort to raise user security awareness. We also take cautious measures in providing information about phishing emails and social media to protect user privacy and security to the greatest extent possible.

If I were to summarize why SafePal has not experienced any security incidents in the six years since its establishment, it mainly comes down to maintaining a sense of reverence, continuously updating knowledge, and viewing security as a multi-dimensional protective project, comprehensively considering the potential security issues users may encounter in their usage scenarios.

Q: Compared to well-known hardware wallet products like OneKey, what are the differences or unique features of SafePal's hardware wallet?

Veronica Wong: Unlike many new players in the Chinese-speaking region, such as OneKey, which commonly use USB connections to interact with PCs for signing, SafePal primarily uses a mobile app + QR code offline signing technology to achieve secure transactions. This method avoids the security risks that may arise from wired connections, ensuring that users' private keys remain offline, thereby enhancing security.

At the same time, SafePal's hardware wallet also supports connection to the extension side, but in a more "mobile-friendly" manner. After binding the SafePal hardware wallet to the app, the app can connect to our extension side through a QR code authorization method, similar to how WeChat's desktop version authorizes login. However, throughout the process, the private key does not leave the hardware wallet. When a signature is needed, the extension side pushes the request to the phone for Face ID or fingerprint recognition signing, and the result is synchronized to the desktop. If it is a Bluetooth hardware wallet, the phone can automatically match and sign after being powered on, with the signing result transmitted to the on-chain interaction in milliseconds.

With the popularization of mobile wallet experiences and the integration of various terminals, the future experience of users managing Web3 wallets across platforms and devices will be smoother. For example, on-chain interaction centers will focus on mobile devices, while PCs will conveniently provide information assistance, and transaction signing will center around mobile phones.

Wallet services should be a public safety product for Web3 that benefits everyone

Q: With a complete wallet product line, what strategic considerations are behind SafePal's upcoming banking deposit and withdrawal services?

Veronica Wong: SafePal's brand positioning has never changed; we are committed to providing secure, reliable, and convenient non-custodial wallets for Web3 users, helping token holders protect and grow their crypto wealth. With this philosophy, we have created a full-stack wallet solution that includes hardware, software, extensions, and mini-programs, offering functions and services covering scenarios such as instant exchange, trading, deposits and withdrawals, and DeFi. In the future, under the backdrop of industry compliance, we believe that the next scenario that can bring new millions of users to the industry lies in the smooth interconnection between fiat and crypto assets. Therefore, we are actively seeking reliable solutions in this direction and invested in Fiat24, a Swiss bank with a full banking license, last year. We have directly integrated banking functions into the SafePal app, allowing users to open accounts online and have personal Swiss bank accounts in their names, facilitating fiat deposit and withdrawal operations in full compliance. Currently, we have opened application channels for over 70 countries and regions, and holders of Chinese passports can also apply. Users will soon receive Master virtual cards that can be linked to WeChat and Alipay for payments and consumption, which we believe is of great significance for connecting crypto assets with real life.

For example, one of our French colleagues receives his salary in stablecoins every month and, after paying taxes, often needs to convert stablecoins into euros for use. However, he previously encountered issues when converting fiat through third-party service providers, such as bank accounts being restricted or closed.

After using SafePal's wallet banking account service, all these problems were resolved—he only needs a few minutes to open an account, and the bank account has no annual fee. He can also recharge the cryptocurrency in his wallet to the bank account, convert it into fiat for direct consumption, and can also convert it into dollars, Swiss francs, and other fiat currencies without incurring additional transfer fees.

Additionally, for users in mainland China, there used to be certain barriers to converting cryptocurrency into fiat for daily consumption or purchasing overseas services that do not support Chinese bank cards. However, based on our banking services, users can have a compliant Swiss bank account without leaving their homes, and at a very low cost (no account opening fee, no annual fee).

Currently, users in mainland China can open accounts using their passports or ID cards, allowing them to receive payments, save, and link the account to WeChat Pay and Alipay for daily consumption, eliminating the hassle of deposits and withdrawals. As we are also in the promotion period, we have just launched an "account opening with no deposit and withdrawal commission" campaign. Users who complete account opening before December 31 of this year will automatically enjoy a 90-day commission-free period (free deposits and withdrawals), and for every successful invitation of a friend to open an account (KYC approved), the commission-free period will be extended by 30 days, allowing them to enjoy more rights corresponding to their points level. We welcome everyone to experience this.

Q: What is SafePal's vision for 2024 and future plans, as well as the (founders/team) views and predictions on the Web3 wallet track?

Veronica Wong: As mentioned earlier, SafePal's positioning is centered on providing users with a secure, reliable, and convenient non-custodial wallet to help them protect and grow their crypto wealth. Therefore, all our planning revolves around this positioning, including:

In terms of asset security, we hope to provide users with a variety of secure, open-source, and code-audited non-custodial wallet solutions, making it easy for users to choose the method that suits them best for managing their assets. For example, regarding hardware wallets, our goal is to create top-tier secure hardware wallets that are also affordable and accessible to everyone. In my view, security is a basic right for token holders, not a privilege for the wealthy. Currently, SafePal's entry-level hardware wallet is priced at just $49.99, making it the most user-friendly entry-level hardware wallet on the market. Based on the idea of "creating hardware wallets that everyone can afford," we continuously collaborate with top partners, including Binance and Circle, to conduct activities like "free hardware wallet giveaways," allowing everyone to easily obtain a SafePal hardware wallet to protect their asset security.

In terms of user experience, we believe that the future direction of the wallet sector is gasless transactions and seamless private key management.

"Gasless transactions" refer to users no longer needing to consider gas fees when transferring or authorizing, allowing for smooth operations similar to bank transfers. The prerequisite for achieving this technology is the continuous iterative development of smart wallets, enabling functionalities like gas tokens and batch transfers. The Ethereum ecosystem's EIP7702 standard aims to seamlessly transform EOA wallets into smart wallets and realize the aforementioned functionalities, which greatly enhances user experience. We are closely monitoring the application and development of such technologies.

"Seamless private key management" means that users no longer have to worry about personally managing their private keys, with the backup process becoming less noticeable or even non-existent, and supporting social recovery or retrieval of private keys. We are deeply researching the cutting-edge trends of account abstraction wallets (AA wallets) and MPC wallets. Although related products have not yet been launched for front-end experience, internal testing has been conducted, and we will launch products in a timely manner after relevant security audits.

Additionally, in terms of product functionality, I believe that the competition in the wallet sector will enter a deeper phase. Wallet teams cannot rely solely on temporary new features or trendy promotions to retain users continuously; instead, they must iterate and innovate across multiple aspects, including security, experience, and functionality. In addition to launching compliant banking services this year, we will also explore and introduce more compliance-related features and products in the future. At the same time, we will bring our products to more public chain ecosystems, such as the wallet mini-program that will soon launch on Telegram, allowing users to enjoy the SafePal product experience anytime.

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