Privy looks to protect user data in Web3, raises $8M in seed round

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Let’s talk about the future IT greenfield. We do this by taking a look at the jumping-off and reconnecting 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 Boulevard Capital.

Privy Web3 builds a simple API to help developers manage user data privately. Using Privy, they can take user data directly from their front-ends and associate it with their users’ on-chain addresses. Data is end-to-end encrypted and bypasses developers’ stacks, helping to protect user information.

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

“Personal data today comes with regulatory overhead, frequent breaches and deep misunderstandings with users – and most developers don’t want to go near that,” Stern said. “However, without user data, we are blinded, forced to create wallets more than people, we have no real idea about our users behind the use of what we want on-chain.”

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

Cryptocurrency draws crowds

More than 300 million people currently use cryptocurrency at this time and that number is only about to grow. As this next generation sector works to reshape much of the Internet, finance and our culture, this widespread adoption of crypto puts developers in a challenging position of creating applications in Web3: more users means more data. More data means more problems for companies managing personal data, and all of this puts developers in an increasingly vulnerable position.

“The lack of user data in Web3 has resulted in terrible user experiences for those accustomed to the modern web,” Stern said. “Things like the ability to receive emails when you go into liquidation or the need to keep signing in and out of DAP to see activity in the wallet. You don’t have to mine your users’ data or risk your users to send great products. “

How Privy’s API works

Privy allows developers to encrypt user data directly from the front-end of the application and associate data privately with on-chain addresses. This enables developers to accomplish the following:

  • Text or email users without handling their personal information directly
  • Get financial and compliance data without storing it on your stack
  • Surface integrated UI across entire wallets and across chains without docking your users

Privy gives developers data vaults in which they can secure user data and keep it under user control, Stern said.

“This is just the beginning,” Stern said. “The next generation of data tooling should allow users to loop and control their data across the web. As Web3 matures, we see the opportunity to rediscover data paradigms that have failed over the last 30 years and give users control over their online data. “

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