A highlight from Mainstream Brands Are Joining Web3 In The Bear Market
Sean Lee is a CEO and co -founder of Magic Labs, which is a wallet that enables passwordless login and Web3 onboarding without seed phrases. Despite not being as well -known as other Web3 wallets, Magic Labs recently raised $52 million from PayPal Ventures, onboarding mainstream brands like Mattel and 7 -Eleven, and has over 25 million wallets installed. In our conversation, we will dive into how they've built enterprise -friendly wallet solutions, their major collaborations, and on the onboarding process of Web2 brands. He also offers his take on how DeFi can be more palatable for the mainstream and more. But first, Sean will get us started with Magic and describe how it's different from other wallets. I'd say a lot of people aren't really familiar with Magic, especially in the Web3 native community, because a lot of our focus has been on the mainstream brands and helping the mainstream onboard into Web3. So that has been our focus. And I say we work with very different kinds of clients, right? So many of our customers, especially enterprises, they actually don't really like to work with multiple third -party vendors, a lot of redlining, and it's pretty cumbersome. And so what Magic is and what helps us differentiate is we are a comprehensive solution that offers a full stack of features and functionalities to suit the enterprise's Web3 use cases across different kinds of verticals. Obviously, our bread and butter is the wallet, but we also collaborate with partners such as Sardine and PayPal to provide fee and on -ramp and NFT checkout. We also have kind of our minting service infrastructure. So basically, we're providing this full stack solution to help our customers get started. And also, I'd say on top of that, our sort of white label wallet is very popular. So in a way, it makes Web3 completely invisible actually to the sort of beginners entering the space. And what's also really cool is you can actually use Magic's white label product to build your own single sign -on or federated wallets on top of our infrastructure. For example, like what Immutable Passport have done on the gaming side. So our solution is quite flexible, and that's where our bread and butter is. And it's also really easy for developers to start, takes about nine minutes to get started. And at the same time, we also check all of the boxes that enterprises are looking for. For example, enterprise compliance, like SOFT2 type 2, some of the privacy ones like GDPR and CCPA, as well as the kind of scalability side of things. And last but not least, we have a sort of patented key management system that is the, I say the most practical solution in the market to address our enterprise customers' performance and scalability need. But at the same time, being really friendly with the crypto beginners and staying with the Web3 ethos, for example, a lot of our principles is to allow the optionality for users to graduate into other types of wallet eventually as well. Or kind of using our keys, plug into other newer wallet standards like account abstraction. And yeah, essentially it's a zero trust system where Magic never sees the private keys and any part of the flow, kind of like a cloud ledger or a treasure actually. And it's about 25 times faster than MPC based solutions, which is really important for some of our customers who are doing high volume drops. Super helpful. OK, so you're offering a full stack crypto solution for mainstream Web2 companies that don't want to be dealing with multiple third parties and just one counterpart that can give them all sorts of solutions out of the box. And you're also white labeling a lot of your solutions so that companies can integrate your products and use their own branding and their own kind of user facing experience, which is probably why many of us hadn't heard much of Magic. Probably maybe we had interacted with some of your solutions. But because it's white label and more of like an enterprise grade system, it's not a brand you see as like an individual consumer. Yeah, that's right. We actually started more on the consumer side with Fortmatic. That's when we met in East Waterloo and we were actually one of the first kind of wallet that was integrated in, for example, OpenSea at the time. So that was kind of recognized as kind of an OG wallet back then. But since then, we've kind of really taken the direction of letting others own the brand, letting the apps and wallets own the direct relationship with their end users instead of being kind of the third person in the process as a separate wallet. So under the hood, you mentioned this innovative key management system. Can you tell me more about what's happening technically on Magic? What sort of network are you using? Is it fully non -custodial? Are people in control of their own keys? How does it actually work? Yeah, I might butcher it a bit because it's quite technical, but I'd say the one key part in the design is to not see the user's private key in any part of our infrastructure. Not when the key is generated or when it's signing a transaction. So essentially the keys are generated in a secure iframe on the user's client. And the key is sent directly to Amazon's hardware security modules for encryption and decryption without routing that through our system. So it's kind of like users have their own kind of ledger or treasure in the cloud hosted by Amazon, and then the keys are being sent directly to there without going to our system. So we're pretty much just keeping the service running from our infrastructure perspective. And what's important for us is that not only you can do this for keys, you can do it for other kinds of data as well. And because we're providing this kind of infrastructure and not directly transferring money from our hosted wallet, and at the same time, because it is on the client side, the users can export their wallets at any time. And we're kind of working towards a path to potentially integrate really well with other wallets or services to make it really easy if they want to graduate, because our focus is really on the very, very beginners in the motion. So if a user wanted to take their funds to another wallet, how would they be able to do it? Like, would they be able to download their keys from this AWS repository and then be able to transfer their assets? And is it like a central exchange where your assets are kept kind of together with others? Or does each user have their own separate account? I guess it's two separate questions. So each user have their own separate accounts. We currently have two flavors of the product, one is a universal wallet, which means one user have access to multiple dApps, like one wallet to multiple dApps, and the dedicated version of the wallet is scoped to each dApp. So you could have different wallets across different dApps, kind of like different MetaMask accounts for different use cases. So I'd say we also tried to make it easier. So essentially, there's a portal that customers can post in order to allow the export of keys. Oh, I see. Yeah. Okay. So it's not like the user has to interact directly with AWS. In what network are you operating? Yeah. So we support actually over 20 blockchains. We started on Ethereum. And then the EVM compatible chains, we do support, but also some other layer ones like Solana and Slow and I think Aptos is coming. So pretty much all the top chains that were pretty agnostic to the chain at this point, but our origin was Ethereum. And are you focusing on layer ones or are you going to layer twos as well? I'd say it's both. A lot of the enterprises do want layer two solutions for cheaper transaction, more scalability. So yeah, definitely both. We are seeing maybe slightly more adoption on the layer two side. Which layer two has been the best option, in your opinion, in terms of, you know, the easiest to use the easiest to integrate, like, what's, yeah, what's been most popular? Oh, that's a that's a tough question. I'd say it's hard for me to have a favorite right now, but I can kind of say what makes a chain kind of stands out to others. I think number one is that there's a lot of resource to help integrate with the chain or tooling around the blockchain that really helps in terms of adoption. So generally blockchain project was great, like documentation or a lot of community content, like those generally are a bit more popular.