Summary:

This proposal is dedicated to the completion of the 1inch Hardware Wallet product development, which includes both software and hardware deliverables. The proposal has been coordinated with 1inch core team and is seeking funding of $2M to complete the product trade version (PTV) of the 1inch hardware wallet. With this funding, we will be able to finalize the product development, set up the manufacturing process, and pass technical and security audits for a successful launch. Our goal is to provide the DeFi community with a cutting-edge solution for handling their crypto assets in a secure, convenient and open-source way, as well as benefit the 1inch ecosystem.

Abstract

We are building the 1inch hardware wallet as a fully open-source project to enhance 1inch ecosystem and empower the DeFi community with a cutting-edge solution for handling their crypto assets in a simple, convenient and secure way.

Launched under the 1inch grant program (which you can read about here) the project is currently moving into the product finalisation stage. The waitlist for the product is currently hosted through 1inch subdomain - hw.1inch.io.

We have been working closely with the 1inch core team and have already coordinated the next steps for the project’s development as well as the following proposal.

As we move forward, we are seeking funds to complete the product trade version (PTV), set up the manufacturing process and undergo technical and security audits to ensure safety and a smooth sales launch.

Motivation

• Launch the first hardware wallet designed specifically for the DeFi community. The wallet will feature transparent signing, data decoding, open-sourced hardware & firmware, seamless navigation, HD-wallet support, and a multi-seed wallet.
• Expand the capabilities of the 1inch Mobile Wallet and provide seamless integration with the hardware wallet. The 1inch Mobile App will serve as a primary dApp for the hardware wallet, allowing users to easily access a range of DeFi protocols from a single interface.
• Make it easy for users to backup and recover the funds. Along with 1inch hardware wallet, we are developing simple backup and recovery solutions, which allow users to export the seed phrase to an external drive.

Specification

The 1inch hardware wallet will be integrated into the 1inch, expanding the 1inch Mobile Wallet ecosystem. It will provide the safest option for storing and managing private keys in a simple, easy, and offline way. Moreover, by launching the hardware wallet under the 1inch branding, we aim to increase brand awareness and establish an additional touchpoint with the DeFi community.

1inch Hardware Wallet key features:

• Focus on open-source security (users can verify and reprogram the firmware, authenticity check and more)
• Enhanced integration with 1inch dApp
• Multi-seed option, which enables users to create and control several sets of wallets with different seed phrases (HD wallet algorithm)
• Fully air-gapped device with QR code or NFC connection options
• Sleek and elegant form factor (lightweight, credit card size)
• Transparent transaction signing conducted with full transaction parsing and call data analysis (includes data decoding)
• Convenient UX/UI and essential functions (wireless, long-lasting battery, etc.)

Roadmap

In 2022, the Hardware Wallet team received a grant of $175k from the 1inch Foundation to develop an MVP (Minimal Valuable Product) of the hardware wallet. The funds were allocated as follows: 15% for supplies and components required for product design, 72 % for team and contractor costs, and 13% for operational expenses. As a result, the team created a working demo board with core functions, including wallet connection and transactions signing, and documented constructed product design.

As of now, we have successfully moved from MVP to EVT1 stage and completed a working engineer prototype. The team is conducting the alpha test and working on device integration into the 1inch Mobile Wallet app.

EVT1 Live Demo: https://www.youtube.com/watch?v=kRwbWE6GfgY

The second and third quarters of 2023 are dedicated to product refinement to the PVT (Product Validation Test, Trade Version), product acceptance, QA and manufacturing, building integrations and partnerships, international laboratory tests & certifications, and setting up sales channels.

Product milestones and deliverables breakdown:

Milestone 0:

Steps included: factory setup, warehouse maintenance, operational and services costs, purchase of 15 000 MCUs (Microcontroller units)

Milestone 1: Engineering Validation Test (EVT2)

Steps included:

• PRD finalisation, EVT1 refinement to EVT2
• Legal (entity setup)
• Design and UX/UI improvements

Delivered results: PRD complete (new blueprints, product descriptions), manufactured EVT2 (photo & video, 20 devices), 1inch app test flight and flow, entity details, UI/UX screens

Milestone 2: Design Validation Test (DVT)

Steps included:

• DVT design, manufacturing
• Mechanical, electronic, performance verification tests from certified laboratories
• Backup & recovery solutions development and manufacturing

Delivered results: Manufactured DVT (photos & videos, ~ 30 devices), crush test results from labs & certifications (components compliance results and pre-certifications results or agreement confirmations with labs), backup & recovery solutions manufactured

Milestone 3: Channels setup

Steps included:

• Sales funnel and logistics configuration
• Countries trade licensing and certifications
• Store, payments, warranties setup

Delivered results: Sales & Trade Conditions (files), tested orders, ordering details in GitHub (including providers, countries, payments, warranties details), trade licenses status

Milestone 4: Product Validation Testing (PVT)

Steps included:

• First production run
• PVT design, manufacturing
• QA
• getting started and onboarding

Delivered results: Manufactured PVT (photos & videos, 100 devices from different factories) = final product with packaging and supporting materials, getting started guide established

Milestone 5: Security Audit & Integrations

Steps included:

• Independent labs, EAL certification
• Other crypto wallets integrations

Delivered results: lab results and statuses (applications filed and paid), integrations status

Milestone 6: Batch production

Steps included:

• preparation, acceptance, manufacturing, assembly, ready-to-ship
• price promos

Delivered results: first batch of 1000 devices + limited (photos & videos), limited price promos for the community, online store

Note: Some milestone stages might overlap.

We are expecting to launch the product for sales (first batch) by the fourth quarter of 2023.

Costs

Breakdown of the costs by groups for the project duration (6 months):

• Manufacturing and procurement costs (from beta to the first batch with limited edition) - $600k
• Backups & recovery solutions - $75k
• Development costs, inc. salaries, product management, contractors - $490k
• Technical performance tests verification and certifications from labs - $110k
• Security testing and evaluation - $85k
• Trade licenses, regional policies and legal establishment- $120k
• Patent registration - $40k
• Operational costs and corp services - $100k
• Sales and supply channels configuration- $250k
• Design, onboarding, community price promos - $95k
• Partnerships, integrations, business development - $35k

Total: $2M

Payment structure

We suggest an upfront payment of $2 million to ensure swift progress and timely delivery. This significant initial investment is pivotal for the successful execution of this hardware project. As we have to secure contracts with component providers right from the outset, the upfront capital will be instrumental in negotiating the best prices. We can take advantage of economies of scale and secure cost-effective deals by purchasing higher-quality components.

As a start-up company, flexibility is crucial in our operations. Situations may evolve, and adjustments may be required along the way. However, we are fully committed to transparency and accountability in using the funds.

We will provide the DAO with comprehensive documentation upon request at any point during our journey. This documentation will detail how funds are utilised, ensuring that every dollar is spent towards delivering a top-quality product for the benefit of 1inch DAO and 1inch ecosystem.

We will also update the 1inch DAO on our progress through forum posts, Github and our Telegram channel. In this way, every step we take will be visible, maintaining an open line of communication and transparency throughout the project’s development.

Receiving address: 0xaBDd020b11eDf6838135270FECaefA7DaF08D2D7

Rationale

Our primary motivation for the 1inch hardware wallet development and sales launch is to provide the DeFi community with a secure, user-friendly, and convenient solution to manage their digital assets. An offline, air-gapped solution for private key storage that is built with users and for users, eliminating the risks of online attacks and hacking attempts.

In designing the hardware wallet, we researched and identified several areas for improvement. Based on the findings, many existing solutions lack transparency, usability, and performance, and may not be driven by the needs of the DeFi community. After careful consideration, we decided to develop a new solution that would integrate seamlessly with the 1inch Network. We prioritised security, efficiency, and ease of use in our design, and also included a multi-seed wallet option to close the market gap and provide greater flexibility for users.

To date, several milestones have already been completed from the previous grant from the Foundation including the following:

• A working engineer prototype (EVT1)
• Demo Firmware 1.0 version
• Establishment of a framework for unique features
• Our waitlist has garnered over 8000 registrations from crypto users

Detailed project results for 2022 can be viewed here: https://medium.com/@hrdwlt/the-hardware-wallet-2022-in-review-d2dfd0f6d47b

Our team is currently working on 1inch Mobile App integration and the device alpha testing.

We will continue to evaluate the product and seek feedback from the community to ensure that we are providing the best possible solution for the DeFi ecosystem.

Considerations

Team

To date, the 1inch Hardware Wallet core team includes:

• Founder (12+ years experience in hardware engineering, development, electronic manufacturing. 4 hardware startups)
• Project Manager (10+ years in software PM, 2+ years in hardware PM)
• Application Team Lead (17+ years in app & software development, main - C++)
• 2 Senior C++ programmers (8+ years xp)
• Embedded Team Lead (specialization - Embedded security , SK Hynix)
• 2 Embedded developers (7+ years xp)
• Mechanical designer (From Huawei Inc)
• PCB & Circuit designer
• Production and Procurement Lead (supplies purchasing company owner, 10+ years in BA)
• Marketing Manager (5+ in an omnichannel marketing)
• HR manager
• Legal
• 4 part-time contributors: community, design, vendors, analytics

Team expansion is planned in the following directions: sales.

Commitments

We are dedicated to the development of 1inch Hardware Wallet project successful implementation and delivery of the 1inch Hardware Wallet (HW) project, in close collaboration with the 1inch core team and 1inch DAO, and with its strategic interests at the core of our operations. We are resolute in providing an unrivalled product that will significantly enrich the 1inch ecosystem and offer immeasurable benefits to the 1inch community.

Recognizing the importance of clear communication and unequivocal commitment, we have outlined the key focus areas to assure 1inch DAO of our dedication to the project’s success and bringing benefits to 1inch ecosystem and 1inch DAO as a result.

• Commitment to Project Completion

Hardware Team has pledged to complete the 1inch Hardware Wallet project, promising to utilize the grant prudently to ensure the product reaches the highest level of quality. This commitment extends from the software and hardware development phases through to the setup of manufacturing processes and the essential technical and security audits.

• Product support

Furthermore, we commit to future support for the product, continually refining, improving, and updating the hardware wallet to ensure its longevity and relevance in a rapidly evolving market.

• Benefit 1inch Ecosystem and 1inch DAO

The 1inch Hardware Wallet, beyond being an innovative product, will enhance the 1inch ecosystem. The success of the 1inch Hardware Wallet is inherently tied to the prosperity of the 1inch ecosystem, with each entity bolstering the success of the other. Integrating the hardware wallet with the 1inch mobile app offers an unparalleled value proposition. It combines a hardware wallet’s security with a mobile app’s convenience, providing users with a holistic, secure, and streamlined DeFi-friendly crypto management solution.

Thus, the Hardware Wallet team is committed to creating a robust, thriving, and prosperous environment for 1inch users and stakeholders by focusing on

1. boosting the 1inch brand’s visibility through logo placement and other branding efforts to enhance brand recognition and loyalty among the DeFi community;
2. integrating seamlessly with the 1inch Mobile App, enhancing its user experience and promoting its use to improve user engagement, thereby increasing the transaction volumes within the 1inch ecosystem.
3. strategic collaborations with other blockchain-based projects and seamless integration with diverse crypto wallets (e.g., MetaMask), expanding the user base and elevating the brand recognition of 1inch among users of other blockchain-based projects.

To access the full proposal, check out the link below.