Cryptocurrency mobile wallet Zengo has introduced a handful of new features combined with a new premium subscription called Zengo Pro that costs $20 per month. This new, optional subscription brings additional security features for users who have a lot of crypto assets or who are really concerned about security in general — basic accounts remain free and the app has also been redesigned.
As a reminder, Zengo is a self-custodial wallet that uses multi-party computation. Unlike Metamask, a Zengo wallet can’t be recovered using a seed phrase. This is important if you want to avoid phishing attempts. And unlike centralized exchanges like Coinbase, Zengo doesn’t control your cryptocurrencies.
If you want to initiate a transaction from your Zengo wallet, all parties need to approve the transaction. In that case, the secret share stored on your device and the secret share stored on Zengo’s server are required.
If you lose your phone or it stops working, you can recover your Zengo wallet on a new phone using the recovery file that is stored in one of your online cloud storage accounts, such as iCloud Drive or Dropbox. You also need to confirm the action from your email inbox and scan your face — more on that later.
And things have been working well for Zengo, as the company managed to attract more than one million downloads. Overall, Zengo users have processed more than $1 billion in transaction volume.
“But what we’ve learned over the years is that there were plenty of use cases for which security had not been solved,” co-founder and CEO Ouriel Ohayon told me.
“What we’ve decided to do is launch a suite of security services called Zengo Pro, which is a paid subscription that brings these innovations to all blockchains. This could be solved by certain services on certain blockchains, but in our case it’s bundled.”
Biometric withdrawal protection and legacy transfer
In particular, Zengo has identified two pain points that are rarely tackled by crypto wallets. First, what happens if someone steals your phone? As The Wall Street Journal already reported, if someone has access to your phone and knows your passcode, they can easily steal money from your financial apps and ruin your digital life.
With Zengo Pro, users can enable another layer of security for outgoing transactions. When you first create your Zengo wallet, the company scans your face and stores a 3D scan of your face. This isn’t Face ID — it uses FaceTec’s software technology for that feature.
Zengo Pro users can require a face scan for outgoing transactions. This way, even if your roommate knows your passcode, they can’t empty your wallet behind your back. And if you’re trying to send money to a scam, Zengo will also warn you with a new risk assessment system (a so-called “web3 firewall”).
Second, Zengo is going to introduce a legacy transfer feature in the coming weeks. “The problem with inheritance is simple. What happens if you die — physically or digitally?” Ohayon said. “There are extremely costly solutions involving lawyers or notaries.”
With Zengo Pro, the company wants to create a software solution that is easier to set up. A user can invite someone they trust to become their legacy contact. The other person should install Zengo first. Both users will then get a shared secret that they can store on an online storage service like Dropbox.
After a pre-defined inactivity phase, crypto assets are automatically transferred to the legacy contact. The maximum inactivity setting is 24 months without opening the app at least once.
And yes, if the user dies and the Zengo Pro subscription can’t be renewed because the payment method doesn’t work anymore, Zengo will still transfer the assets after the inactivity phase.
In the future, Zengo also plans to add additional features to its pro subscription. Paid users can also reach out to customer support more easily. The legacy system will be improved as well, with the ability to add several contacts and define a split.
“Most wallet companies have business models that have shown their limits — including Ledger and including us until now. How do you create a revenue stream that is recurring, that is predictable, that aligns interests with the user interests without artificially trying to add fees here and there?” Ohayon said.
And this is key to understanding Zengo Pro. Many crypto companies generate more revenue when there is more trading activity. This creates some seasonality and it can be more difficult to survive during crypto winters.
That’s probably also the reason why Zengo has secured additional fundings from new and existing investors — but the company isn’t sharing the amount raised other than “millions of dollars.” Yat Siu, the CEO of Animoca Brands, is investing in the crypto wallet for the first time.
“Because creating a wallet is expensive. Here, we bring an innovative business model that enables us to create a recurring, sustainable model controlled by the wallet company,” Ohayon said.