Loop, a new crypto startup, is working to make Web 3 payment rails easier for its crypto-paying customers.
Recently, the company raised $4 million in seed funding led by Andressen Horowitz, claims CEO Eleni Steinman. Steinman previously worked as a strategist at bloXroute Labs. Steinman and co-founder Shane van Coller developed Loop together.
The two founders left bloxRoute to tackle one of the most frustrating issues in wallets holding back Web3’s growth, which is recurring payments. To pay in crypto, one must sign the outgoing transaction 12 times a year.
Many crypto companies have already tried to solve this problem, including Diagonal, MeanFi and Superfluid. Loop’s priority at the moment is Ethereum.
Steinman explained that when DAO and multi-signature wallets are added to the mix, recurring payments become more difficult. Users are forced to approve outgoing transactions every time they pay, as this is how crypto wallets work.
Here is Loop! It eases the burden on users and shifts the processing duty from users to an automated smart contract. It will automatically release the given amount of crypto from the user’s account upon receiving authorization, saving them the hassle of recurring payments.
However, such an architecture can lead to fairly common security hacks in the crypto industry. But Steinman says Loop’s smart contract will protect against exploitation. She explains that only the counterparty company has the right to debit payments from users of Loop smart contracts. Smart contracts are hard-coded without “infinite allocation functions” to avoid draining wallets. “Anyway, the contract can never take you more than that amount,” Steinman added.
Offer a token in the spirit of decentralization
Steinman also revealed that “Alpha customers” were reviewing Loop’s system – referred to as “models” ahead of the scheduled public release in June.
Subscribed users, however, would get no clue about the loop’s seamless integration with “Pay with crypto” payment buttons on the web. She explains that because it’s designed in-house, people wouldn’t know they’re using Loop.
Although, currently, loop does not commit to a token, according to Steinman, the company can further decentralize the governance behind its tooling by offering one.
According to a press release, Alchemy Ventures, CoinList, CoinList, and angel investors such as Paul Veradittakit of Nansen’s Alex Svanevik Pantera, Lauren Stephanian, and Imran Khan participated in the round. Steinman believes Loop incubated with Archetype.
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