Drop #1: Soul Wallet, Pouch.ph and EigenTrust
Release of Web3Scout - Product hunt for Crypto - to discover the latest Web3 products first
Welcome to the first edition of Web3Scout Newsletter by Cryptechie — where we will help you discover the latest Web3 products first with a curated list of the latest products and new companies before they publicly launch. As usual, promise to keep it high quality.
Hi crypto friends,
After speaking to 50+ Web3 founders, I realized it is hard for Web3 founders to get discovered, find early adopters, beta test their product and spread the word. On the other hand, venture capitalists and crypto natives can’t wait to learn about and get their hands dirty trying out these innovative products but don’t know where to look.
To solve this challenge, we launched Web3Scout: Product Hunt for Crypto to help curate the top Web3 products. Every 2 weeks, we will also feature deep-dives into the top 3 most upvoted & innovative products for our 23K readers 👇
We are actively sourcing these products from (in decreasing order) our founder network, Web3 accelerators (Orange DAO, DeFI Alliance, Outlier Ventures, Beacon Accelerator), new Twitter/discord accounts, launchpads (Product hunt, Launchcaster.xyz) and various meet-ups & community groups.
Editor’s Note: If you’re building and launching a Web3 product or fundraising, we can help. Please add your product to Web3Scout website so our community can discover you.
We will also include you as a featured startup (23K+ readers) if our community upvotes you in the leaderboard or you have an impressive demo :)
Drop #1: Top products covered today 👇
Soul Wallet
Pouch.ph
EigenTrust
1. Soul wallet
ERC-4337 wallet. Supported by the Ethereum community.
💰 DeFi
Problem - EOA sucks
There are two kinds of accounts on Ethereum currently:
EOA (Externally-owned account), most people use this kind of account on MetaMask
Smart contract
Key Management
Tightly coupled between key and account (lost key, lost account)
Hard to recover (lost recovery phrase lost key)
Access Control
No access control (same for everyone)
No multi-sig
No roles
No spending policy (daily limit)
Gas Payment
Gas must be paid in Ether
Gas must be paid directly from EOA
UX
No batch transaction ( approve + send + cancel approvement)
Wasteful on-chain revert
Solution
Current Solution
Hardware wallet
Only solve the key stolen problem
Multi-sig wallet
Safe but inconvenient
Rely on EOA
MPC wallet
Only solve the key recovery problem
Soul Wallet Solution: Account Abstraction via ERC-4337
Smart Contract Wallet controlled by the user directly (without needing an EOA). Support both desktop and mobile.
Key management
Decouple key and account
Social recovery
Access Control
Native multi-sig
BLS aggregation - reduce gas by at least 30%
Per device key
Spending limit
Multi-Role
Session Keys
Gas payment
Pay gas via the sponsor
Pay gas via ERC-20
Privacy
UX
Batch transaction
Automation transaction
faceID / touchID signature
Product progress
Launched both POC plugin and mobile (supported by @AstroX network) apps.
Reading material
Stage
Seed
Amount raised
$2M
Investors
Vitalik, Strategic Angels
Social media
https://twitter.com/soulwallet_eth
Launch timing
2022
2. Pouch.ph
BTC Lightning ewallet for the Philippines
💰 DeFi
🦺 Payments
Pouch.ph is using bitcoin’s Lightning Network to transform digital payments & remittances for the Philippines, one of the world’s largest remittance corridors, which saw $32B in remittance volume last year. The Pouch.ph eWallet is akin to a digital bank plus global remittance connectivity via bitcoin/lightning, payment processing for merchants, and in-app shopping conveniences for individuals. You can think of Pouch as “Stripe meets Venmo” on Bitcoin’s Lightning Network rails for SE Asia.
They’ve partnered with CoinCorner in Europe and are having even bigger partnerships in the works
Opportunity Size
The Bitcoin Lightning Network is a decentralized, global payment network capable of near-instant settlement for a fraction of the cost of legacy payment processors. Pouch is using bitcoin’s Lightning Network to transform digital payments & remittances for the Philippines, one of the world’s largest remittance corridors, which saw $32B in remittance volume last year
The Lightning Network is still in its infancy now but growing very rapidly. The lightning network has already begun to disrupt the remittance payment industry and we expect that trend to continue. What is most important here is NOT how large a market size for Pouch TODAY, but rather how large it WILL BE for it in 7-10 years from now, when we believe the Lightning network will disrupt Visa, Mastercard, Western Union, and alike, and become the global market leader in global payments. At that time the market size for Pouch would be a HUGE one. It is like comparing the Lightning network growth with Facebook’s growth. When Facebook was in its infancy and was live only in Harvard and several other colleges in the US, then it was a big mistake focusing on Facebook’s market size at that specific time only, without having a large picture and vision of Facebook becoming a dominant social network in the US and in the world. We believe that the lightning network today is as Facebook was in 2005. Even just the current Philippines market is a very large one by itself. Pouch’s direct competitors are the two eWallet giants who exclusively serve Philippines. GCash was recently valued at $2B. PayMaya was recently valued at $1.4B. Pouch is targeting this same consumer eWallet/banking & digital payment processing market, with a twist that they can also serve the $32B PH remittance market (with lower prices and a better experience) as a side effect of being lightning-native.
From the Founder, Ethan Rose:
As an American who has sent money home to my wife’s family for the past 7 years, and spending months at a time living in the Philippines, it was clear to me that the century-old “Western Union” remittance paradigm (A $32B industry in the Philippines alone) is overdue to be disrupted. Fees are high (7% on average). Transaction times are slow (3 days on average). And remittance companies block transactions frequently. My deep passion to build Pouch was born out of a tragedy when I tried to send a medical remittance to a friend to save her 7-year-old son, but he passed away; He was unable to receive life-saving medical care on time because my remittance was too slow. The Lightning Network is the obvious disruptor, enabling instant payments over a highly scalable & permissionless global network. I’m a solo founder. Previously I spent my career in Seattle as a software engineer at T-Mobile, Mighty Ai, Uber, and Aurora. I love coding and I could build anything that I set my mind to. So why the heck would I choose payments in the Philippines? My past experiences have prepared me mentally to dedicate the rest of my life to making the monetary system more fair & free, and the payments system more borderless for Filipinos. I believe in the lifecycle of a startup where a founder must start as a hacker and pivot to higher leadership. I love the hacking that I get to do today, but I am equally excited to be orchestrating the most talented team in the Philippines who together are far more effective than I could ever be on my own.
Stage
Seed+
Amount raised
$2M+
Investors
Hivemind VC
Social media
https://pouch.ph/
Launch timing
2022
3. EigenTrust
Reputation protocol for Web3
🆔 DIDs
EigenTrust is a Web3 Identity and Reputation protocol and has signed up pilot POC partners - Zerion, Cyberconnect, MintKudos, Lens, Farcaster. They are also in discussions with Metamask, gm.xyz, layer3. On data infra integrations - they’re working with Dune Analytics and Ceramic teams for the data ingestion and storage layer for EigenTrust. Check out their demo video for the web3 social use case.
EigenTrust - what is it?
The core idea behind EigenTrust is that a person's reputation is defined recursively by the people who trust that person, weighted by those people's reputations. The Intuition At baseline, you can trust your friends. This gives you a good starting point, but because each person only has so many friends, it's too limited to make a workable system. As a next step, you can expand that by asking your friends who they trust, and weighing their opinions by how much you trust your friends. This increases your trust coverage, but it has two problems. The first problem is that it still does not give you enough coverage. And the second problem is that it adds a fair amount of computation for large systems, because you have to do this for every user in the network. You can address both of these: You can ask your friends whom they trust, and in turn, ask their friends whom they trust, and in turn, ask their friends whom they trust, and do this for a very long time, at each stage weighting their opinions-as of that same stage-by how much you trust them. In other words, you can initialize a trust vector with a set of seed peers that you trust. And then you can keep multiplying that vector by a matrix that represents the pairwise trust judgments of all the peers in the network. This is a power method algorithm, and it converges to the principal eigenvector of the matrix. This solves both of the problems introduced by the friends of friends method. Because you ask so many times, you get complete coverage over everyone connected to you, directly or indirectly - in just a single eigenvector calculation.
What is the market opportunity for reputation systems?
The market for web3 reputation is proportional to the growth of web3 users and their on-chain activity. Just like how web page indexing and ranking became the backbone of internet search and ads, web3 reputation will power key features (search, discovery, recommendations, trust, and safety) for any web3 marketplace or consumer app in the next 5 years. A peer-to-peer community or marketplace in web3 will rely on an open reputation infrastructure, versus trying to manage an in-house data infrastructure and proprietary algorithms thereby restricting themselves to centralized liability (no community ownership or incentive alignment). In the first 5 years of internet marketplaces (paypal, ebay, et.al), the top 3 expense line-items included trust & safety, fraud, and reputation. The cost to create and manage an in-house reputation infrastructure can range from a few hundred thousand to millions depending on size and scale. Reputation will become an important public utility infrastructure - just like oracles, data indexers, and decentralized storage infrastructures. The value accrual for such a service comes from real demand for reputation computing, which drives growth, monetization, and retention for apps and marketplaces in web3. Reputation systems can power user loyalty in web3 context where apps and front ends find it challenging to create compelling moats.
What is the architecture of the protocol?
The foundational layer of the protocol is a decentralized computation network. The network performs the EigenTrust calculations and makes the reputation data available for developers to use in their applications. This layer will be designed to ensure a constraint free and optimized implementation of the power method which runs in polynomial time. Another component of the protocol will involve a Data APls layer which will enable developers to select the relevant data that needs to be ingested for reputation computation in their use case. Developers can choose to leverage any on-chain data or bring their off-chain data. This layer will also enable developers or their community to input the seed peers as well as their desired pairwise trust (reputation heuristic) to perform the EigenTrust computation. The results of the reputation computation will be published on the desired data infrastructure (Ceramic, IPFS, etc.). Finally, the token economy will strengthen sybil resistance, power the reputation compute marketplace, and enable the community to curate and enable an open reputation system for a variety of use cases.
Application - Proof of Concepts
Web3 Social Personalized User rankings
The goal is to provide a personalized recommendation/ranking for each user in web3 social, we used Farcaster data for our POC. The ranking results can be used for 'Users to Follow'on a web3 social app. We computed a personalized version of EigenTrust for users, where the pairwise trust matrix was created by taking the existing follow-follower graph. And for each user, they were their own seed node. We ran the EigenTrust algorithm for the existing 3000+ users. Additional rankings can be created in a similar way for NFTs to explore/buy and content to follow based on your social graph. All of this is based on the peer-to-peer activity data, and results in the most truthful and valuable UX for users.
NFT Collection Rankings
The goal is to provide a relative (elo) ranking of NFT collections using on-chain data. The ranking results can be used by marketplaces and communities to show reputation of NFT collections. We started by picking a couple of trustworthy collections as seed peers (>1-year mints, top 30 daily volume, floor price >5 Eth). We used BAYC and Moonbirds as the seed peers. These criteria for seed peers can be defined by the developers or community. Then we established a system for pairwise trust. In this case, since NFT collections can't directly vouch for each other or trust each other explicitly. We assumed that trust between collections is a function of the cohort of owners' transitive purchases of other collection. To be more specific, we said that one collection "trusts11 another collection if a certain number of people bought NFTs from the second collection after having bought NFTs from the first. After 12 iterations, the Principal Eigenvector converged to a global trust score for these collections. Relatively well known collections like MAYC, Azuki, and VeeFriends were highly ranked1 and copy-cat or fake collections got a score of 0.
Stage
Pre-seed
Amount raised
$3.5M
Investors
Galaxy Digital, Spartan
Social media
Launch timing
2022
