Not only are we making fetch happen, but also we’re making post happen to every cryptocurrency network we can get our hands on. It’s Colton here, the CEO of Hedgehog, the app that helps you buy baskets of cryptocurrency and automate your digital asset exposure wherever you custody funds. Don’t forget that also now includes a self-custody MPC wallet where Hedgehog can invest on-chain on your behalf without knowing your private key! Watch the short demo, because we’re live, baby!

I'm pleased to announce to the world something I've been waiting close to 7 years to release with SEC-registered* Hedgehog: on-chain, self-custody digital asset wallets that use secure multi-party computation ("MPC") to trade automatically in the background! You can try it out today by downloading the app on iOS and Android.

Before I talk about some of the challenges we’ve faced to get here, I want to share some key benefits:

  • The wallets are self-custodial, which means that if our business ends for some reason, your wallet continues to live on, no migrations or deprecations required. Just pick up your private key shards, reconstitute the key, and use any other wallet software. MetaMask  even has a Snap for easy import!
  • Being close to base layer of your wallet means we can generate signatures and addresses for any ECDSA-compatible chain. Unlike EVM-based smart contract wallets, our MPC wallets are easily expandable to support Cosmos IBC, Bitcoin L2s, Doge, and many more.
  • Our dear friends at Capsule are powering the MPC, so between us you have adjustable capabilities regarding what permissions to provide and which types of transactions third-parties can co-sign; and you can withdraw third-party access at any time!

Pretty cool, right? And this is only the beginning, our goal is to slowly decentralize out to networks of key hosts and registered solvers that plug into the relevant jurisdictions to ensure that everything is above board from a compliance perspective, and to make interacting with web3 simpler by abstracting away the inventory and network management that plagues web3 applications today. If you’re interested in building this future, please do reach out!

Zero to one

The last three years haven’t been easy. Since our summer 2021 YC batch, we raised a round of capital and immediately jumped into a very scary time for web3 companies. Three Arrows Capital imploded, FTX was revealed to be defrauding its customers, Terra Luna network collapsed under the weight of its faulty stablecoin markets—if your product or your capital was tied to any of these firms or their customers then your business probably fell to the resulting contagion. To make matters worse, suddenly the fundraising environment became adverse with the slow fade of COVID-era interest rates and their concomitant ZIRP.

While we lucked out with our choices of partners, as we didn’t hold capital at any of the institutions that folded, we did not escape unscathed. In January of 2023, our banking partner, with whom we had signed an ODFI agreement under the full approval of the CFO, withdrew from our program unexpectedly. Apparently the Fed Reserve Board and the Office of the Comptroller of the Currency had released a letter asking OCC chartered institutions to stop doing business with cryptocurrency-related companies. Shortly thereafter, Silvergate Bank, Signature Bank, and Silicon Valley Bank were all declared insolvent and the FDIC had to increase its insurance limits.

Sentiment was at an all time low for web3, and being an investment adviser exclusively focused on digital assets was a tough position to be in. Nonetheless, we persisted, believing that eventually the industry would mature, sensible regulation would be implemented, and the true use-cases for web3 primitives would emerge. Which is exactly when the SEC sent us a notice of examination.

Fortunately, we were able to quickly address the short list of deficiencies from the SEC, and they chose not to give us any Wells Notices in the last twelve months since we submitted our final response. But then another tragedy struck: our co-founder requested leave to take care of his health and ultimately chose not to rejoin us.

For any of you founders and future execs out there, please remember that a startup is a marathon, not a race. You need to take care of yourself and your co-founders, especially when your industry is imploding and you have every reason to doubt yourselves and your choices.

The SEC and Congress still have yet to make clear rules and guidelines for web3, opting instead for a program of legislation by enforcement that has left judges confused, as they remand the commission to submit to formal rule-making processes. Despite this, we’ve been working hard on this latest product release because we believe it is truly a better paradigm for the future of finance, data ownership, and network resilience.

It has been a trial and a triumph to see our first rebalances on-chain, and we hope that some of you will benefit from the fruits of our hard labors. We are, to the best of our knowledge, breaking new ground by assisting retail with their MPC wallets with full automation capabilities. Please sign up today and take advantage of the offering.

What is MPC?

Multi-party computation is an exciting new technology that allows individuals to cooperate in signing cryptocurrency network transactions without any one party knowing all the information necessary to create a valid transaction. If you imagine there's a vault that holds your money, and you need two unique keys to open the vault, then MPC would be like giving each key to different people so they both have to agree to remove money from the vault.

In the case of this MPC wallet, the client holds a copy of both keys, so they can open the vault and sign transactions whenever they want. But Hedgehog and Capsule each only get one copy of one key, so they are not able to sign transactions individually; both parties are needed to reach the signing threshold.

The Hedgehog app enables users to open up their own on-chain MPC wallet, connect their existing exchange accounts via API, onramp or offramp funds, and automate their portfolio on any connected venue at their convenience, all without revealing their private keys! That means we can save you time, quickly add new tokens, search out alpha, and optimize risk for your unique tolerances.

Something for everyone

With the launch of these on-chain wallets, Hedgehog opens up a whole new universe of assets and strategies that fit each client’s suitability profile and preferences. Most notably, Hedgehog has teamed up with OpenEden to provide a Fixed Income stack for eligible clients, featuring access to TBILL tokens.

A first foray into Real-World Assets (“RWAs”), TBILL tokens represent a claim on a regulated US Treasury Bill fund, tokenized and offered on the Ethereum and Arbitrum networks—that's on-chain AAA-rated debt. Businesses and accredited individuals both can confidently self-custody their own TBILL, while tokens are redeemable for USDC 24/7.

Given the collapse of several regional banks in 2023, TBILL is a convenient way to diversify corporate cash reserves or personal cash deposits, while still receiving competitive yields.

All the asset baskets you've come to know and love remain available for both custodial and non-custodial wallets, whether that's trusted indices from CoinDesk or FTSE Russell, or the standard Hedgehog stacks:

  • Total Crypto: More than 85% of the entire crypto market cap
  • Blue Chip: Bitcoin and Ethereum only, where it all started
  • DeFi: Peer-to-peer financial services on the blockchain
  • ETH Network: Assets built on Ethereum and its L2s
  • Layer One: Core networks powering the web3 ecosystem
  • Yield Farming: Tokens that pool staked funds to generate rewards

Every stack is fully customizable, from the asset list to individual allocations, even the strategy that determines your investment criteria. Our dream is to offer tunable and automatic yield farming, airdrop farming, fraud prevention, transaction forgiveness, one-click checkout experiences, and more.

The next billion wallets

Web3 is complex enough without having to figure out where to store your tokens or how to get the best prices. For investors who are looking to dip a toe into the world of digital assets, and for institutions looking to keep up with the new generations that increasingly hold their wealth on-chain, Hedgehog is a novel solution for making web3 accessible and easy to manage. All you have to do is download the app, and a piece of the new world wide web can be yours.

* Being registered as an investment adviser does not imply a certain level of skill or training. This is not investment advice, nor an offer to buy or sell securities. Assets are not SIPC or FDIC insured. Investing involves risk, including loss of principal, and digital assets may not be suitable for all investors. For risks pertaining to MPC wallets, see relevant disclosures in form ADV-2A.

What are your favorite yield farming and airdrop farming strategies? What networks do you like to trade on? We’d love to automate it all for you now that we can transact with you on-chain.

Keep hedging,
— Colton