An Interview with the Founder of WalletD Riccardo Spagni (Monero)

Join us for a exciting sit-down with Riccardo Spagni aka Fluffypony, Crypto "OG" and founder of WalletD to learn why he believes crypto is still broken, and how WalletD is going to fix it.

Our founder Antonio Migliaccio and all the team at Algo Capital DAO is thrilled to announce our 2nd token swap stake!

Algo Capital DAO acquired via token swap a stake in WalletD in April 2024, the 1st and only Open-Source, Multi-Chain, Wallet Library built on Rust - a key piece of infrastructure required for the crypto industry to reach mainstream adoption.

Not familiar with Algo Capital DAO and how we assist founders and investors ?

🌐 Check out our website

The funding scene is buzzing again, and we've got more deals coming our way than we know what to do with…

So why did we actually pick WalletD ?

Three main reasons:

1) It doesn’t happen often that you get to partner and work with a stellar team that has been in the space since the early days of Bitcoin and that has managed to successfully steer and manage a $2.8 Billion network for almost a decade.

2) Our DAO’s ethos very much are aligned with WalletD’s in recognizing a huge problem that our industry is facing: centralization and the slow erosion of privacy. Vision of the future and alignment of values are vital for us at Algo Capital DAO, and we couldn’t be more delighted to have partnered with builders that have been at the forefront of this freedom movement since its outset.

3) Lastly, we acknowledge the huge gap that still needs to be filled to bring the next millions of users into the crypto space - regardless of all the chatter and noise you can read on the news about how we’re already there. The numbers just don’t back that up…. Being able to seamlessly and cheaply deploy wallets across chains in a open-source manner is probably the most basic piece of infrastructure that our industry is still missing. It’s as simple as that.

On the tailwind of our 1st acquisition via token swap , all the team and members at Algo Capital DAO are ecstatic about working with Riccardo and the WalletD team to help developers all over the world deploy wallets in few lines of code !

The Interview

We sit down with Riccardo Spagni aka Fluffypony, founder and CEO of WalletD to talk about his background, vision and an overview of the project and it’s ongoing progress.

1. ALGO DAO TEAM: You’ve been in crypto since 2011, what made you join the space in those early days and what is your background in the industry?

Riccardo Spagni: Yeah, great question. So, the thing that made me join or made me discover Bitcoin in early 2011 was that I had some time in my hands… I'm an entrepreneur, and one of my businesses had reached a level of success and I found that I had some free time.

I read a Slashdot article about a Google engineer that was building a Bitcoin library using Java and that engineer ended up being Mike Hearn, so I guess I have Mike to thank for introducing me to Bitcoin. My earliest reaction was, this is nonsense, there's no way this is going to work. I had a whole bunch of very rational reasons for why I thought this was impossible and unsustainable.

And so, I set about trying to prove, mostly to myself, that Bitcoin was impossible and that Satoshi had made fundamental mistakes with the consensus algorithm or consensus mechanism. And that was an interesting lesson to learn, to try and break Bitcoin and prove to myself that it wasn't as broken as I expected.

Subsequent to that, I got quite enamored with mining and built a bunch of things for miners. I obviously tried my hand at mining myself and then realized I'd much rather sell pick & shovels to miners than be a miner myself. So, I invented a flat-packable, stackable, open-air frame for GPU miners. Then, I created a company that built and manufactured and sold and shipped these.

In 2014, I joined the Monero (#monero) core community and was the lead maintainer from its outset until 2019, when I stepped back to build other things. Subsequent to that, I invented YAT, co-created Tari, and also stepped back as lead maintainer on Monero in 2019. So, that's a brief history of my background in the space.

2. ALGO DAO TEAM: Understanding how a founder views the macro picture is very important for us. What's your take on the current state of the crypto market? What significant changes do you believe are still ahead?

Riccardo Spagni: You know, I think it's interesting. I feel like there's a level of maturity that we kind of expected when the ETFs happened. It was like, oh, this is going to change everything. And I'm not convinced that it has. I think that there's still room for growth.

One of the massive issues that I believe we face as an industry is there's a way of doing things that we sometimes back against. And that's fine. I mean, I think we are a little bit counterculture. We're quite rebellious as an industry and we should be.

I mean, this is about decentralization… This is about freedom… This is about enabling people who have not had that level of access and personal power and freedom before. And then at the same time, there's this sort of other side where it's like, well, traditionally, the way we do things is you need to have a VASP license and you need to be a bank in order to touch money. And you need a whole X amount of customer deposits. And you can't cheat the system except when you do. And then the bank collapses.

It's a little bit disappointing when as an industry, we go: look at how rebellious we are. But we're also going to basically build a bank for crypto. We're still going to build a centralized institution. And I really hope that tools like WalletD will encourage developers and builders in this space to stop doing that.

I'm not suggesting that they shouldn't comply with regulations. I mean, if you're a developer and you and your project need to comply with some regulation, no problem. I'm not suggesting that you back that trend and go land yourself in hot water. But at the same time, you can still build a product that has a path to decentralization. You can still build a product that doesn't compromise or at least where it does make compromises, they're short term.

You can say: we're centralized now, but it has the path to decentralization. And I think that that's so critical and important. As an industry, we need to get back to our roots. We need to get back to the way that we wanted to do things at the beginning, the way that we wanted to empower people and not make a set of compromises that ultimately leads to users suffering, because they're the ones that suffer when we make bad choices as builders and as developers and as engineers.

So that's really my hope for where this industry goes next, because we haven't really achieved takeoff velocity. I truly believe we're not going to bring the next billion users into this ecosystem, into this world. We're not going to empower the next billion people if we're reliant on Metamask and Solana and the existing set of tools.

We've got to do better. We have to build better products. We have to build better tools. We have to build better mousetraps. And they have to be freedom enhancing. Otherwise, what's the point ?

3. ALGO DAO TEAM: What problem does WalletD solve ?

Riccardo Spagni: So, in late 2014, early 2015, I launched MyMonero, and today, it's an incredibly successful Monero wallet. But when we decided to expand it and, after nine years, make it a multi-chain, multi-currency, multi-asset wallet, we hit a brick wall because there aren't really any Libraries or SDKs for building wallets.

There's scattered pieces of this here and there, but there isn't like a one-stop shop that I can go and use when I'm building a wallet. And that's kind of embarrassing because we're supposed to be this relatively mature ecosystem, and yet we're still doing some things that are, from an engineering perspective, extremely immature. So, that led us to thinking about how to solve this very unique problem and creating WalletD, which is a solution to this problem.

WalletD is a liberally licensed open-source SDK or open-source set of libraries for building wallets. And it's designed to allow you to build custodial wallets, non-custodial wallets, whatever type of wallet you need or want or desire. It's exceptionally modular, and it empowers developers in ways that they just simply have not been empowered before.

4. ALGO DAO TEAM: Who’s on your team ? Can you describe the role and background of each member?

Riccardo Spagni: The team really consists of the talented people who have built My Monero and operated it alongside me over the last nine years. So, as an example, Pat (Patrizio Spitalieri), who's on this call as well, heads up our operations and growth, and he's been with me for a very long time, even, obviously, before MyMonero started, and is exceptionally good at really just keeping the train on time, making sure that everything runs.

Zaheer Sedat is our CFO, who comes with a wealth of experience. He is a chartered accountant who has led the financial side of organizations in all sorts of industries, from financial services to FMCG, and has been with me for the last seven years.

Jonathan Purnell is our general counsel, who is ex-Norton Rose Fulbright and is a tax and regulatory specialist who is exceptionally gifted when it comes to understanding crypto, because before I poached him from Norton Rose, he was one of the early crypto leaders in that organization.

And then there’s Devin Pearson who heads up our engineering department and has been with me for a significant period of time, has worked on MyMonero for nearly, you know, for ages, for many, many years.

And quite frankly, I think we are one of the few teams in this space who have the experience in not only building, but operating a high-impact, very large, consumer-facing wallet for nine years. We faced all manner of attacks. We faced all manner of bugs and, you know, and pain with MyMonero. And so we are uniquely positioned to understand the pain and the challenges that wallet developers face. We really are one of the few teams, if not the only team, who can tackle this challenge with a deep understanding of the developer experience when building wallets.

5. ALGO DAO TEAM: What's the marketing and sales process you are employing to acquire new target users?

Riccardo Spagni: Great question. So, obviously, target users for us are not consumers. We're not building a wallet at all. And so we don't care about consumers, in the least.

Our target market, our target users, are developers, any type of developer really. And they could be developers who are building applications that need a wallet baked into it. They could be developers who are building games that need wallets baked in. They could be building a progressive web app that needs a wallet in it. They could be building a dedicated wallet. They could even be building a hardware wallet.

Those are the users that we care about. Frankly, we have an unfair advantage in that this is the only product of its kind in the space, and there's no value in competing with it because it's open source. So if you don't like what we're doing, just fork it.

That means that, developers don’t really have somewhere else to turn to. Now, they could roll out their own, but, let's be honest, when the thing exists to help you, why would you go and do it yourself ? Why would you go and make the pair of pliers or the screwdriver from scratch and forge it from steel when you can just go down the road to the hardware store, and buy one? And that's a really powerful sales tool in and of itself.

Another way that we're attracting users is through our token. The WalletD token has several uses, but the one that I want to focus on for this question is its use for attracting developers to build on top of WalletD. And that's through something called our Grow2Earn program. And the way the Grow2Earn program works is a developer who is using WalletD for their product or service, whether it's a dedicated wallet app, a hardware wallet, or an application that has a wallet baked into it, they can join our Grow2Earn program.

They have to perform some degree of developer advocacy for us. So they have to go advocate to other developers for using WalletD. And there's various ways that they can do that. They can talk about WalletD at conferences. They can talk about WalletD on podcasts. They can help us co-write integration white papers about their integration experience.

And as they do this, it helps us attract other developers to the WalletD ecosystem, and they're able to earn WalletD tokens. And the number of WalletD tokens they earn is commensurate and pro rata based on their user base. So now what's really interesting about this is, if you think about it, a small wallet project, maybe a wallet project that has no users yet, it's just a new venture that started, or a game that's building a wallet into it, and again, has no user base to speak of, they can still earn WalletD tokens.

Now, they're not going to earn a lot, but their costs are also not very high. And so this is a piece of revenue that might actually be really significant to them. It might genuinely tilt the balance there so that they don't have to go and do a subsequent round or go borrow money in order to stay afloat.

And that's really, really cool. But for a big project, for an existing wallet project that might have hundreds of thousands or even millions of monthly active users, it's even better because by them advocating for us and really demonstrating to other developers and to the market that this is an incredibly powerful, trustworthy product, they can earn a large chunk of our tokens. And so they're motivated and incentivized to build on top of WalletD, and we think that that's a really powerful mechanism.

6. ALGO DAO TEAM: What's the typical market cap size for your B2B clients?

Riccardo Spagni: One of the key things that we want to have coming out of WalletD's existence is that there should be a low barrier to entry to building a project that has a wallet baked into it or building a dedicated wallet. And that should lead to new developers being able to pitch up and say, hey, I've got this cool idea.

Let me give you an example. Let’s say the idea I have is that I want to build a wallet that targets model train enthusiasts. And yeah, okay, the user base is tiny. There's only 20,000 potential people who are going to use this. That's the TAM for this wallet. But I can do it because I'm one developer. I can use WalletD.

I can build this very cool wallet project for model train enthusiasts. And that's like one aspect of it. And then you go all the way to the other end of the scale where maybe a Tier 1 game developer, Rockstar, EA, one of these big game developers, goes, well, we've got this new game and we want there to be an economy in it for skins or weapons or vehicles or whatever it is. And so we're going to issue them as NFTs on some scalable blockchain that doesn't have fees like Ethereum has. And so they do this and now they've got to bake a wallet into their game. And they don't want to do a custodial wallet.

They don't want kids to have to go and ask their parents for a copy of their passport and go through KYC. But they also don't want to build this crazy non-custodial wallet that requires a 13-year-old child to write down 13 seed word in a way that makes the most sense. And WalletD is the thing that gives them the flexibility. It gives them the ability to use different key management mechanisms, to use something where maybe they hold one of the keys or whatever it is. So there's lots of opportunity there.

And of course, a tier1 game developer would have a a potential market cap of their game of billions of dollars, right down to that very small developer who's going to have a tiny market cap for their little model train enthusiast wallet project.

So this is something that is unique because it's such a fundamental piece of technology. It's sort of like asking, well, what's the market cap of people who are going to use screwdrivers and pliers? Well, anyone. It could be your dad at home who wants to fix the barbecue grill. It could be the maintenance man working for Microsoft. Everyone uses pliers and screwdrivers.

Obviously, it's one of those things where we're going out and we're striking LOIs, but a lot of the LOIs that we're focusing on at the moment are integration partners, not really product partners. So there's not much that I'd be comfortable talking to just yet. We are in conversations with larger clients who are very excited about WalletD, but our product is not at a point where we can say, oh, yes, Rockstar or EA or any of these large organizations go forth and build.

WalletD is in alpha and the beta is not even out yet. So it's still what I would consider early days, especially because developer tooling does need a degree of maturity before larger organizations will risk using it.

7. ALGO DAO TEAM: How does WalletD generate money and what are the revenue streams ?

Riccardo Spagni: Great question. So WalletD's revenue streams are really focused on three different pillars.

The simplest revenue stream is consulting services. So the way to think about that is lots of open source products have the ability to provide consulting to anyone who uses it. They charge an hourly fee or a retainer. We're happy to sit with a customer who's building something on top of WalletD and hold their hand through the process. That's easy stuff, low-hanging fruit.

The second revenue stream is one that we're slowly working on. It's not something that's going to happen anytime soon, but we're building an aggregated backend for WalletD where, if you think about it right now, the way that you would talk to the Ethereum network and get state from it would be something like Infura or Alchemy or Etherscan or running your own guest or open Ethereum node. And so we're building our own aggregator for that where we're able to provide a highly performant backend for all of the chains that WalletD supports.

And so then a developer doesn't need to think about like, oh, I must go sign up for all these services or I must run my own. They can just use WalletD's backend and obviously pay fees for every API call they make. And we also have an interesting structure there because we're busy building a mechanism whereby staked token holders can, if you're a developer and you stake tokens, you can get a discount on the fees that you would pay for that backend. So really just providing additional utility to the token.

The third revenue stream, which is the one that we actually find most interesting, is taking into account the way that wallets make money which is generally through ancillary services. So if you think about Metamask as a great example of this, how does Metamask make money? Well, through their token swap service.

As users use it, and they go and aggregate a bunch of DEXs and they go and perform the swap for the user, they take a small fee. And the fee that Metamask takes is a percentage of the transaction size. So they don't take a fixed fee for every swap. And it adds up to many millions of dollars a month in revenue, which is fantastic for them. There's similar services that wallets integrate, things like aliasing systems.

So let's say you buy a Handshake or Unstoppable Domain or a YAT inside a wallet, then there's often a revenue share component to that. And these affiliate fees or, you know, sort of service fees or a revenue share opportunities exist for wallets. The problem for service providers, the actual operators of these services, is that they face a very real challenge when they go and try and convince wallets to integrate their service. And that challenge is that wallets are resource constrained. Obviously, WalletD solves that problem. It reduces the resource constraint issue for wallets.

But it also solves an additional problem. And that is, if you are an ancillary service provider, so you operate a KYC-free swap service or, you know, your Handshake or Unstoppable Domains or any ancillary service provider like that, you can now, instead of going through the painstaking integration process where a wallet has to build the integration with your service from scratch, you can say to them, hey, if you're built on top of WalletD, it's not a two-month integration exercise. It's more like three lines of code and some UX work.

Because we're solving that problem for these service providers, they are happy and willing to cut commercial agreements with us that say, every time WalletD code is used, you pay the full service fee, the full affiliate fee, the full rev share fee or rev share agreement amount to the wallet developer. We don't want to get in the way of that. But then, in addition to that, you pay WalletD a few basis points.

And that's really powerful. So let's make that practical. Let's say that a user goes and uses a KYC-free swap service, whether it could be a centralized service, so a service like ChangeNow, SideShift, any of those services.

They go and exchange $1,000 in Tether into Ethereum or Bitcoin. Now, there's a small fee that the wallet earns. And let's say, hypothetically, that that fee is $50.

That $50 gets paid by that service to the wallet developer, i.e. WaffleWallet, whatever it is. No problem. But now, a little bit comes to WalletD because WalletD code was used for that.

And that's a small amount. Let's say it's $5. And so that's how that transaction breaks down.

The user gets their money, the fee goes to the wallet developer, and WalletD gets their small fee as well. And obviously, this starts as a small trickle. But as WalletD is integrated into more and more and more wallets, it eventually becomes a torrent.

And this revenue stream becomes significant. And we think that that's a really, really cool revenue stream that has not existed until now.

8. ALGO DAO TEAM: Can you share a bit more on the role and need for the token in your ecosystem ?

Riccardo Spagni: So I'm generally very averse to tokens. I'm not a big fan of putting tokens in things. And I'm especially not a big fan of putting tokens into consumer products. But this is a unique opportunity where it is a developer-focused, back-end enterprise product. And that's an opportunity for, or a space where a token can realistically exist.

So the token really has four key pieces of utility, or four, really, that I want to focus on.

1)The first is the one that I've already mentioned, which is the Grow2Earn program.

2)The second is the Build2Earn program. Now, this is focused more on something that's slightly different. And that is, obviously, that WalletD is open source. We want to attract developers to WalletD. We want them to contribute to WalletD.

So write code that augments WalletD's capabilities, expands the number of chains that we support, and so on. And that's where this becomes really important and critical. Because this is something, the Build2Earn program is something where, for the first time, open source contributors are able to pitch up, write code.

As long as the code is good, well written, well maintained, you know, useful, so it actually solves a problem that exists in the WalletD ecosystem, then they can earn tokens. And so Build2Earn really helps us to bootstrap a nascent open source community.

3)The third use case for the token is, as I mentioned, that we're looking at building our own backend, and so really giving developers an opportunity to say, I've got some tokens, I'm going to stake them, and I'm going to reduce the fees that I need to pay to use this backend aggregator, which we think is really, really cool, because it does also act as a velocity sink. It means that less tokens are floating around.

4)The fourth thing is using it as an effective marketing tool, and that really comes down to, you know, leveraging KOLs who are developer-focused. I mean, a lot of KOLs are not, they are more sort of consumer-focused, but when you look at products that are not consumer-facing, so LayerZero is a great example of this.

Why should a KOL be excited about a LayerZero token? Yeah, okay, there's the airdrop opportunity, but it's also because it's a key piece of infrastructure that I believe is going to underpin large portions of this ecosystem, and so WalletD is similar. And through effective use of our token, we can get KOLs to - without just throwing tokens at them - truly invest their time and money to acquire those tokens. Yes, they're going to receive an outsized return on it, but they now have a vested interest in WalletD, and they can go to bat for us and explain to others why WalletD is important.

9. ALGO DAO TEAM: What's your current traction and milestone you're planning to hit over the next six months?

Riccardo Spagni: In terms of traction, one of our big focus areas at the moment is getting service providers to sign LOIs. So we currently have 11 service providers that have signed LOIs, and we continue to go and speak to more of them on a daily and weekly basis, and get them pumped about what we're doing with WalletD, and then get them to commit and to sign an LOI. So that it's not just them speaking about it, but it's them actually committing to making sure that there is support for their service or product inside WalletD.

And we think that that's really, really important. In terms of the next six months, one of the things that we want to really do is achieve some degree of maturity with WalletD. So obviously, like I said, we've got a beta that's coming out, but within the next six months, we really want to hit our V1, so that we can start to truly encourage developers to build on top of WalletD and have those first few critical clients or customers who are building on top of WalletD and are really excited about what we're doing.

10. ALGO DAO TEAM: What motivated you to team up with AlgoCapital DAO and how's the collaboration been like so far?

Riccardo Spagni: Yeah, so we were introduced to you by Fran Stranjar and the team at Techemy Capital, and the big motivation is your reach and the fact that you guys understand what we're building, you believe in what we're building. You know, we sometimes have conversations with investors, and at the end of it, they say, well, we're not really investing in wallets. And I'm like, well, we're not a wallet, so that's fantastic…

There's almost like a lack of understanding about what we're building. So it's a pleasure and a joy, after the deep dive that we've had, of you understanding that this is infrastructure. This is a key piece of infrastructure.

We're not building a wallet. No one's going to download WalletD on their mobile, on their phone and use it. That's not what we're building.

So, like that deep understanding of what we're building and the value that it provides has really been special to see.

Are you building a token based project that we shouldn’t miss out on ?

Reach out to @algocapitaldao on X(Twitter) or book a call with us directly by clicking below

11. ALGO DAO TEAM: Can you share more details about the ongoing SAFE and SAFT and the other investors that have already committed to backing WalletD ?

Riccardo Spagni: Yeah, sure. So our SAFE round, our equity round, is $4 million on $30 million post-money valuation. That round is already quite – it's not full, but it's quite heavily invested in already.

Our most fervent supporters and earliest supporters in the SAFE round are Arrington Capital, Big Brain Holdings, and MS2 Capital, as well as a number of angels like Ivan Brightly and others. And I think what's nice about it is that there are some investors who believe that value accrual happens on the equity side, and we want to empower them.

We want to give them that opportunity. At the same time, we also recognize that those investors also want to have access to the token. And so the SAFEs come with token warrants.

And if an investor wants to do both, they can. They can have the equity and use the token warrants to gain exposure to the token. On the SAFT side, Pat can touch more on this first tranche and what that looks like from a tokenomics perspective.

We've just opened the SAFTs up, and the aim really is to enable those investors who want pure access to tokens, they don't care about equity at all, and they're excited about the token and about what we can do with it.

Patrizio Spitalieri: Yeah, so on the token generation event, that will be happening in Q3 of this year. And we've got a 100 million FDV plan then. But before then, if anyone wants to get in on the private round, here’s the breakdown:

Private Round 1 (SAFT)

• Raise Amount: $6 million

• Tokens for Sale: 150 million

• Price: $0.04

• FDV: $40 million

• Unlock: 25% on CEX listing

• Discount from Public: 60%

Private Round 2 (SAFT)

• Raise Amount: $4.5 million

• Tokens for Sale: 75 million

• Price: $0.06

• FDV: $60 million

• Unlock: 25% on CEX listing

• Discount: 40%

Public Round (TGE)

• Raise Amount: $2.5 million

• Tokens for Sale: 25 million

• Price: $0.10

• FDV: $100 million

Do you want to get on board this unstoppable train with Algo Capital DAO ?

Join us in financing and building out this critical piece of infrastructure to facilitate the onboarding the next million users …

BOOK A CALL with us or WalletD by clicking the button below or write an EMAIL to ALGOCAPITAL@PROTONMAIL.CH so we can put you in touch with Riccardo and the WalletD team.

Given the existing demand, the SAFE is expected to close rapidly, and there is room in the SAFT but as always first-come, first-served !