Playing It Safe With a Safe Multisig 🔑
Dear Bankless Nation,
Last week was a wake-up call for users who thought hardware wallets were as trustless as could be, and while your assets are still pretty darn safe on a Ledger, the company's misleading public marketing has left plenty of people wondering about other options.
Today, we dig into one of the most popular enhanced security wallet solutions: a Safe multisig.
- Bankless team
Bankless Writer: William Peaster
Safe, formerly “Gnosis Safe,” is the most popular smart contract wallet solution in the cryptoeconomy today. In today's article, we’ll walk you through how to use Safe to easily create one of the most secure wallet setups possible, a multisignature wallet!
- Goal: Create a Safe multisig
- Skill: Beginner
- Effort: 30 minutes
- ROI: Learn how to vault your crypto
Safe and sound: securing your crypto with a multisig
Before last week’s Ledger Recover drama, many folks in crypto thought hardware wallets were more or less impregnable.
Now a lot more people have come around to the reality that firmware updates — which basically tell a hardware wallet how to operate — could be used to extract private keys, despite Ledger's previous marketing.
That worst case extraction scenario may be very unlikely, but the catastrophic possibility has left more than a few magic internet money aficionados wondering, “What is actually the safest way to store my crypto?”
The answer to that, at least for most people right now, is a Safe multisig. In short, Safe makes it easy to create smart contract wallets, which are extremely flexible and customizable and thus ideal for long-term crypto storage applications.
When you create an account with a service like MetaMask, you just get a simple wallet, i.e. what’s known as an “Externally Owned Account” (EOA) wallet. EOA wallets don’t contain code, can only sign transactions, and if the private key is lost or stolen, the entire account’s funds can be lost, representing a single point of failure.
In contrast, a Safe smart contract wallet contains customizable code that determines how its transactions can be processed. For example, such a wallet can be set up to require multiple key signatures to complete transactions, hence the “multisig” moniker. But a Safe wallet supports so much more, like scheduled transactions, spending limits, role hierarchies, and beyond.
So if you’re looking for the best way to protect your crypto for the future, a Safe multisig might be the ticket. It’s simple to create, highly customizable, supports 12 networks, and setting one up with at least 3 wallets will ensure that your crypto can’t be lost or stolen through a single point of failure.
Best of all? You can bring the wallets you already use, e.g. Rainbow, Ledger, GridPlus Lattice1, and use these as the signing keys for your Safe multisig. Now that you have the basic context of Safe, let’s walk you through how to use the platform + protocol combo to set up your own multisig!
How to create a Safe multisig
- Go to app.safe.global/welcome and connect your wallet (keep in mind that this initially connected wallet will pay the network fees for the Safe creation)
- Click on the “Create Safe” option, select your desired network, e.g. Ethereum, and name your Safe, e.g. “My Vault,” before pressing “Next”
- In the ensuing UI, add your desired owner wallets (I recommend inputting at least 3 to start), select your transaction threshold (I recommend a 2/3 signature requirement to start), and press “Next”
- Review your prospective Safe’s details + the estimated network fee (was 0.01 ETH at the time of writing), and if everything looks okay press “Next” again
- When prompted, complete the Safe creation transaction with your wallet and wait for the transaction to complete — when it’s done click on the the “Start using Safe” button to proceed
That’s it! You could then migrate in the crypto and NFTs you want to store here en masse using the smold.app tools Migratooor and NFTMigratooor. As for your new Safe itself, you can use the “Transactions” tab to facilitate transfers and the “Apps” tab to find and interact with supported apps directly from your Safe, e.g. Aave.
Right now, there are over 1.5 million Safe accounts in existence and more than $39 billion USD worth of crypto stored within these accounts. The biggest power users in the space, including Ethereum creator Vitalik Buterin, trust Safe with their funds.
If you’re buying and hodling ETH and beyond for the long-term, then a Safe multisig is one of the most practical and easy-to-use storage solution in the cryptoeconomy today. Yet what makes a Safe account so compelling is that a Safe is much more than just a multisig or a storage solution. Its smart contract-based infra means it can support all sorts of incredible things, from account abstraction to recovery mechanisms.
Indeed, Safe is so flexible that you could even use it in tandem with Ledger Recover, such that the Safe’s onchain safeguards prevent key extraction while still allowing you to enjoy the benefit of the recovery service.
The bottom line, then? The Safe system is powerful, flexible, highly securable, and likely the easiest way to set up a multisig today. So whether you’re a seasoned crypto enthusiast or a newcomer to the space, Safe is perhaps the safest way to store crypto right now.