Published on May 4, 2023

Safe — Manage Your Digital Assets on Ethereum

Author: Kaushal
#Insights
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Safe — Manage Your Digital Assets on Ethereum

Suppose you are a member of a DAO managed by multiple core members. Anyone can make a transaction despite having multiple core members and many more regular members. Someone could take advantage of this and initiate a spam transaction that could harm the entire DAO.

Introducing Safe, the most trusted platform to manage digital assets on Ethereum!

What is Safe?

Safe is a smart contract wallet that requires a certain number of people to approve transactions before they occur.

It is useful while managing pooled DAO funds. Usually, DAOs require a certain number of members to authorize fund transfers. All or selective members vote upon these transfers before the core group executes them.

Why Are Externally Owned Accounts un-Safe?

Nowadays, many crypto users prefer single-key wallets such as MetaMask, TrustWallet, Exodus, etc. They are called Externally Owned Accounts or EOA. These accounts are secured with a 12-word seed phrase, which acts like a private key for the user.

If the private key is compromised, so are the funds! This is risky if you have a large stage of funds or some critical sensitive data linked with your wallet.

For businesses, projects, and DAOs with more than one person managing smart contracts, EOA is not a secure way to manage funds. If anyone behaves slightly carelessly or compromises the team, the funds are gone forever.

Safe ensures that multiple people have authorized the transaction, eliminating the risk of unauthorized transactions.

Why Safe?

Safe requires a certain number of people to approve a transaction. This is helpful when many people work on the same project and interact with the blockchain.

Suppose your business has five stakeholders. You can set up the wallet to require approval from 3 out of 5 or all 5 stakeholders before sending the transaction. It follows the M of N approach. Basically, M out of N total participants must approve the transaction where M could be equal to or lesser than N.

Additionally, Safe also gives you complete self-custody over your funds. Sometimes traditional banks will bother you for running a cryptocurrency business. With Safe, there is no risk of such events.

Here is a chart available on Safe's website that compares itself with its alternatives:

Advantages of Using Safe

Building your application on top of Safe can have several advantages, such as better user experience, more security, and increased flexibility and integration.

High security

The multi-signature functionality allows defining a list of owner accounts and a threshold number of accounts required to confirm a transaction.

Continuing our previous example, we must list five stakeholders and the threshold number' 3'. Once three out of five stakeholders approve the transaction, it will take place.

These owners can either be EOA or other smart contract accounts.

Advanced execution logic

We can use Safe Library Contracts to perform complex transactions. A common example is batched transactions, where multiple transactions are batched together and executed simultaneously.

In terms of Safe, we can batch several transactions together instead of sequentially signing them.

Access management

We can integrate Safe Modules with our Safe. For instance, we can define a module only used to recover access to a Safe under specific circumstances.

Token callback support

Many new tokens require wallet contracts to implement callbacks. Some token standards allow contracts to immediately react to receiving tokens through these, making it even possible to reject the transfer altogether.

Ether-less accounts

Ethereum transactions require ETH to pay the gas fee. Safe allows users to pay transaction fees in some supported ERC20 tokens.

Safe calls it token payment, and it's one of its core features.

How much does it cost?

You need to pay a certain Ethereum transaction fee while setting up a Safe. And the fee depends on various parameters. Those parameters are:

  • Gas price
  • Number of owners
  • Usage of the Proxy factory
  • Additional logic set (like FallbackHandler)

The following table on Safe's help page shows transaction fees.

Getting Started

Starting your own Safe is just a matter of a few minutes and a few more selections. We are assuming you have never used Safe before.

Go to app.safe.global and choose Create a New Safe.

Now connect your wallet.

Enter the name of your safe and select the network you have.

Enter the list of owners for your Safe and decide the number of thresholds you want. Remember, thresholds are the total number of confirmations required to authorize a transaction.

Review it for the final time before paying the gas fee. Click Next and authorize the transaction from your wallet.

If you face any difficulties, contact their team for further assistance. Additionally, check out their blog, help docs, and GitHub.

We have Safe listed on our platform! Check it out now! 🚀
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