Owning and managing user data has turned from an asset to a liability for most applications and services. This is especially true for web3 projects where, even if encrypted, sensitive user data should never be stored on-chain, as this makes the assumption that the chain’s contents will never be decrypted at any time in the future.
As a general rule, blockchains excel at transparency, enforcing provable claims, partially due to the architectural decision that they store all of their state as publicly accessible, immutable data. Also, most chains are not suited for direct data storage (and frequent retrieval) and accommodating large user data volumes would lead to chain bloat with consequences on speed and cost. Hence the following conundrum.
As many web3 developers have chosen to simply not store contextual user data in reaction to these constraints, the user experience of web3 applications suffers. Without user data, developers are flying blind, forced to build for wallets rather than people, with no real insight into the users behind the usage that can be seen on-chain. Also, for many reasons (governance, community, access, compliance, etc.) many web3 projects are increasingly requesting and storing sensitive user data off-chain — using legacy web2 services and home-grown databases, creating unnecessary vulnerabilities for web3 projects and their users.
Enter Privy, which provides powerful APIs and encrypted storage that close the gap between users’ on-chain activity and their off-chain data, empowering developers to build delightful user experiences without putting users’ data at risk. Privy is the web3 connected sensitive data vault for projects / applications, and the data is encrypted so neither the developers nor Privy ever see it. .
With a few extremely simple API calls, such as `privy.put()` and `privy.get()`, developers can encrypt user data directly from the front-end, and privately associate data to on-chain addresses. This enables developers to, e.g.:
- Text or email users without handling their personal information directly,
- Take on financial and compliance data without storing it on their stack,
- Surface a unified UI across a user’s various wallets across chains without doxxing them.
Whereas “user data as a liability” is increasingly an established problem in web2 / SaaS, web3’s data infrastructure and ethos around privacy created a much more urgent need to find a robust solution that integrates natively into web3 where required. This should also unlock new user experiences, making web3 more accessible and competitive.
However, this is just the beginning. As web3 matures, there will be an opportunity to reinvent the data paradigms that have failed the internet over the last 30 years and give users back control over their data online. The next generation of data tooling should keep users in the loop and in control of their data across the web. That is why we are excited to back Henri and Asta given their unique and rare capabilities straddling very hard web3 and computer science & software engineering challenges. Read more here.