Apr 18, 2024 in Research
Our decision to invest in Sodot stems not only from our belief in their team and technology but also in their potential to shape the future of digital asset management and security. As the industry grows, we expect the demand for such solutions, which combine sophisticated and cutting-edge technology with a seamless integration process and user-friendly approach, to only increase.
Why CMT Digital Invested in Sodot
In the constantly evolving digital asset landscape, the quest for secure, efficient, and user-friendly infrastructure solutions is paramount. Sodot's Multi-Party Computation (MPC) infrastructure redefines security and usability for wallets and custodians, and potentially, the entire finance ecosystem. Here's why we see Sodot as an extraordinary venture:
The Team
Led by Ido Sofer, Shalev Keren, Matan Hamilis, and Elichai Turkel, Sodot's founding team has over 20 years of combined experience in security and MPC technologies. Their impressive backgrounds include roles across various sectors, such as elite IDF technology units, multiple MPC and ZK projects, the public sector, and academia. This level of experience and dedication is exactly what we look for when investing in companies poised to redefine their industry.
A Future-Proof Solution for a Dynamic Market
MPC is a cryptographic protocol that enables secure and private digital asset transactions by allowing multiple parties to jointly compute functions without revealing their private keys. Sodot's MPC infrastructure is designed to be the backbone of future digital asset management, combining versatility with robust security measures. It caters to a range of applications from personal wallets and Wallet-as-a-Service (WaaS) to institutional wallets and custody solutions.
A recent case study by Tholos estimated that leveraging Sodot's MPC infrastructure helped them reduce their development time by 18 to 24 months, saving approximately $1 million a year. By facilitating improved user onboarding experiences and providing seamless account recovery, it demonstrates a keen insight into the growing market's needs. Critically, Sodot's solution also addresses the rampant issue of lost or stolen private keys, responsible for a staggering $100 billion in losses. Their product not only aims to remove single points of failure but to greatly enhance overall security and redundancy, positioning Sodot as an innovative leader in securing digital assets.
The Competitive Edge – Providing Customers with Full Operational Control
What sets Sodot apart is its unique approach to building an infrastructure product. Sodot's product philosophy ensures that customers have full control and operational independence over the MPC infrastructure they use. Therefore, Sodot's MPC is designed to be self-hosted by its customers, enabling major benefits that are rare to come across, such as full data privacy, no dependencies on Sodot's liveness, full control over the UX, no vendor lock-in, and more. Sodot also matches that with a developer-first approach that includes a very simple and seamless integration process that does not require any prior knowledge about MPC or cryptography, a "misuse resistant" approach (which means that if it works, it's safe), and 24/7 support.
This unique proposition sees significant demand not only from custodians and regulated entities that require on-premise solutions due to compliance considerations but also from leading Web3 companies, who build self-custodial products, that value operational independence and control over their infrastructure and the ability to provide their users with the best UX, exactly as they intend it to be.
Our Investment Thesis
Our investment in Sodot reflects our confidence in their team, state-of-the-art technology, and their potential to influence the future of digital asset management and security. As the industry expands, we anticipate an increasing demand for such sophisticated and user-friendly solutions. Their technical excellence, market understanding, and strategic vision align perfectly with our investment thesis, marking them as a company with the potential to lead and redefine the MPC infrastructure space. At CMT Digital, we're excited to support Sodot on this journey and are confident in the team's potential to become a cornerstone of digital asset infrastructure.
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