Privy tries to protect user data in Web3, raises $8 million in seed round


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Let’s talk about the IT greenfield of the future. We do this by looking at the starting and reconnection points (let’s call them on-chain and off-chain) between today’s Web 2.0 and the next generation of online business and culture, Web3.

Web3 startup Privy announced today that it has raised $8.3 million in seed funding led by Sequoia Capital and BlueYard Capital.

Privy builds simple APIs to help developers manage user data privately in Web3. Privy allows them to take user data directly from their front-ends and link it to their users’ on-chain addresses. The data is encrypted end-to-end and bypasses developer stacks, protecting user information.

CEO and founder Henri Stern told VentureBeat the funding will “help us grow our team, scale our APIs, and build partnerships to help developers in the space build better, more private products for their users.”

“Personal data today comes with regulatory overhead, frequent breaches, and deep mismatch with users — and most developers don’t want to go near it,” Stern said. “But with no user data, we’re flying blind, forced to build for wallets rather than people, with no real understanding of our users behind the uses we see across the chain.”

Blockchains are transparent by nature. Encrypting user data is not a solution to these problems, as encryption breaks down over time. So what should developers do with user PII? Privy exists to bridge the gap between real (off-chain) user data and the on-chain (public, verifiable) world.

Cryptocurrency attracts a large audience

Currently, more than 300 million people use cryptocurrency and that number will only grow. As this next-generation sector will reshape much of the Internet, finance, and even our culture, this wider adoption of crypto puts developers building apps in Web3 in a challenging position: More users means more data. More data means more problems for companies handling personal data, all of which puts developers in increasingly vulnerable positions.

“The lack of user data in Web3 has led to terrible user experiences for those accustomed to the modern web,” Stern says. “Things like the inability to receive an email when you’re about to be liquidated, or the need to keep logging in and out of dapps to see activity across different wallets. You don’t have to mine your users’ data or put your users at risk to ship great products.”

How Privy’s API works

Privy allows developers to encrypt user data directly from the app’s front-end and associate private data with on-chain addresses. This allows developers to achieve the following:

Text or email users without processing their personal information directly Include financial and compliance data without storing it on your stack Provide a unified user interface across wallets and chains without doxxing your users

Privy gives developers data vaults where they can secure user data and keep it under the control of the users, Stern said.

“This is just the beginning,” Stern says. “The next generation of data tooling should keep users informed and in control of their data on the Internet. As Web3 matures, we see an opportunity to reinvent the data paradigms that have failed us over the past 30 years and put users back in control of their online data.”

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This post Privy tries to protect user data in Web3, raises $8 million in seed round

was original published at “https://venturebeat.com/2022/04/20/privy-looks-to-protect-user-data-in-web3-raises-8m-in-seed-round/”

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