Rainmaker: The Future of DeFi Onboarding.

August 31, 2023

In conclusion

DeFi, in its current state, is broken - unusable for 9 out of 10 average Joe’s due to its sheer complexity. Go ahead, try sitting down with your girlfriend Aunt Cheryl and explain to her how to farm with USDC on Stargate. For a quick laugh, let’s walk through the steps involved:

  1. Sign up for a KYC account on a centralized exchange (CEX)
  2. Deposit cash into her CEX account and buy some ETH
  3. Wait 4-10 days for the CEX to verify the ACH deposit
  4. Download a software wallet and add a new account via seed phrase (don’t forget to write it down!)
  5. Transfer the ETH to her software wallet
  6. Swap her ETH to USDC (but save some for gas!) on Uniswap
  7. Pool her USDC in a Stargate Liquidity Pool
  8. Stake her LP’ed USDC in a Stargate farm

… yikes. Aunt Cheryl might be a wizz at Facebook Marketplace and Candy Crush, but you lost her halfway through step 3 of this mess.

It’s DeFi’s complexity that is holding back the vast majority of everyday users. And if we want to onboard the next billion people to the blockchain, we need to abstract away these complicated hurdles.

Introducing Rainmaker - One app, everything DeFi

Rainmaker is part of a new class of crypto wallets, leveraging Account Abstraction to bring the next cohort of users on-chain with their mobile-first wallet.

Entirely new capabilities are now available thanks to this wallet:

  • 🖱️ One-click strategies: Swap/Bridge/Stake/Farm/Compound in a single click via bundling. The days of endless wallet confirmations are over.
  • ⛽️ Gasless transactions: Apps can sponsor transactions to encourage activity, making interactions free for users. No ETH is required in your wallet to move tokens.
  • 🔑 Multi-party keyshare & key recovery: Full self-custody. Log in with an email/password and 2FA. Recover your keys without needing to trust third parties.
  • 💸 Instant on/off-ramping: No more waiting days to move funds on/off centralized exchange. Buy crypto with your credit card, bank account, or Web 3 wallet.

We’re truly looking into the future, lads. One day soon we’ll look back and wonder how we ever tolerated the dreadful user experience of Metamask.

BTW - Rainmaker is currently invite-only, but you can try it out with the invite code BLOCMATES.

A whole new world of unlocks

Imagine a future where you can get the simplicity of using a centralized service like Celsius or Voyager (which have become my trigger words) while being able to self-custody your assets - this is what Account Abstraction unlocks. But, how does it work?

With Account Abstraction (ERC-4337), instead of you directly “owning” a wallet, you own a smart contract that owns the wallet. This strategy maintains the same security assumptions as the standard wallets that we generally use today (which are also called EOAs - Externally-Owned Accounts). The pivotal difference is that a smart contract wallet allows for a multitude of new use cases that were previously impossible to accomplish in a permissionless manner.

https://twitter.com/blockworksres/status/1600536954365280256?s=20

Instead of sending regular “transactions,” requiring confirmations each time, these smart wallets use “User Operations,” which bundle several operations to accomplish complex tasks with a single confirmation. This batching is sometimes called Account Abstraction Bundling (AAB) and is similar in concept to how rollups like Optimism and Arbitrum bundle a group of transactions together in order to save on mainnet costs.

A side benefit of these bundlers is that User Operations are atomic - if there is any issue encountered along the path to complete the Operation, it is reverted. Don’t worry, anon, you aren’t going to be left holding some intermediary token or some unstaked LP position.

Rainmaker has been on a rampage, releasing strategy after strategy for users to access with a single click. So far, they operate on Ethereum mainnet, Polygon, Arbitrum, Optimism, Base, and Avalanche, with 60+ strategies using these protocols:

  • Hop
  • Stargate
  • Synapse
  • Vector Finance
  • BenQi
  • Lido
  • EigenLayer
  • Balancer

To top it off, Rainmaker routes trades through several DEX aggregators in order to find the best quote for users, very similar to how DeFi Llama’s meta-DEX aggregator functions.

Did someone say free transactions?

Smart wallets allow users to specify a “Paymaster” contract that will sponsor the cost of transactions. Say a new perp DEX is spinning up and wants to encourage users to try it out - what better way to attract capital than to sponsor their transaction fees?

Rainmaker is taking this concept to the next level and sponsoring all activity on their app during this initial phase of deployment. We’re personally pumped to see what this means for the future of the DeFi space - the fewer barriers to entry, the better.

I remember sending some USDC to my first Polygon wallet and wondering why I couldn’t do anything with it once it arrived. With smart wallets, you won’t have to worry about keeping a little gas in every wallet you own.

Self-custody AND key recovery

Look, the concept of a public-private key pair is often the first hurdle users face when trying to go on-chain. Plus, self-custody, and the fact that there is no recourse if you mess up and lose your seed phrase, essentially cut off a huge chunk of users.

In an ideal world, we need wallets that are simultaneously:

  • Easy to spin up for the everyday user
  • Entirely in control of the user and not a third party
  • Recoverable in the case of loss

This combination is only possible through the use of smart wallets. Rainmaker, in particular, allows a user to generate a wallet using an email and password in combination with Two-Factor Authentication (2FA).

The wallets are technically a 2-of-3, with an optional 4th (for a 2-of-4), MPC (Multiparty Computation) keyshare. This allows a user to maintain complete custody of their wallet, but also allows for account recovery by using 2 of the following:

  • Email + Password + 2FA
  • Local or cloud (encrypted) key backup
  • Encrypted phrase/key pair that is stored on the blockchain (max security)
  • On-device biometrics (encrypted by your iOS) like facial scan or fingerprint scan, which is optional

Rainmaker mentions that it will be possible to expand into additional keyshares for added security in the near future (potentially to a 5-of-9 share model).

Regardless, the peace of mind gained from knowing there is a safety net for your assets is a zero-to-one innovation. This is the type of hurdle-removal the space needs in order to onboard Aunt Cheryl.

Say hello to easy on-ramps

The friction that we’ve all experienced from moving cash-to-crypto or crypto-to-cash is likely to fall by the wayside over the next few years (finally). And whether you want to move assets via bank account, CEX, or Web3 wallet, Rainmaker’s got you covered:

  • Coinbase Pay - on/off-ramp using your Coinbase account
  • Sardine - Buy crypto with your bank account
  • Web 3 wallet - connect your mobile or desktop wallet to transfer funds
  • Bridge XYZ - on/off-ramp stables using ACH/Wire for super-low fees (0.25%)
  • Ol’ reliable - send/receive funds using your Rainmaker wallet address

Team and Community

The two founders of the wallet, Carlos Reyes and Brent Traut, met each other in a YCombinator group chat - bonding over their drive to build in Web 3. They bring together experience from across Web 2 - Apple, Microsoft, LinkedIn, and Pinterest. And with Carlos being a 2014-era Bitcoin miner and Brent being the former Head of Engineering at Hashflow, they are as crypto-native as you can get. 

They just spun up a Discord community and plan on distributing some Founding Member NFTs to early adopters of the wallet 👀 The team has been super responsive on Discord with answering user feedback, which is a green flag to us.

https://twitter.com/RainmakerWallet/status/1689293301533339648?s=20

Partnerships

The team has been rolling out new features seemingly on a weekly basis. They recently announced a campaign with BenQi and Vector Finance, where users can qualify for some token prizes by trying out some new pools.

https://twitter.com/vector_fi/status/1692197773737922910?s=20

They’ve also been keen to follow the market hype, which we greatly appreciate. They’ve made it possible to one-click enter into EigenLayer pools:

https://twitter.com/RainmakerWallet/status/1691091151057506304?s=20

And hopped on the Base train sooner than seemingly anyone else:

https://twitter.com/RainmakerWallet/status/1690052615235608579?s=20

Account Abstraction is the future, and now we get our first taste

[Monthly users of Account Abstraction contracts have been popping off recently. Source]

Surprise surprise, crypto is complicated. But with each hurdle we dismantle, we open up these financial ecosystems to a new host of users that were once completely shut out.

Being able to go from zero to yield farming on several different chains in just a few minutes is a massive leap forward. All the user does is download an app, link their credit card, and start earning yield. How is that different from online banking or online shopping?

Couple that with gasless transactions, easy ramping, recoverable keys, AND self-custody and now we’re really cooking with gas.

The DeFi revolution will happen slowly, and then all at once. And before you know it, while she waits for her Candy Crush lives to restore, Aunt Cheryl is going to be earning some sweet, sweet yield in the Stargate USDC pool, right beside you.

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