Exclusive Interview with Safe Co-Founder: Unlocking Greater Value for Billions in Assets, the Next Opportunity for Smart Wallets
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Exclusive Interview with Safe Co-Founder: Unlocking Greater Value for Billions in Assets, the Next Opportunity for Smart Wallets
"All on-chain wallets will become smart wallets within three years."
Navigating Web3 tides with focused insightsInterviewee: Lukas Schor, Co-founder of Safe
Interview and article: Wendy, Foresight News
With Coinbase officially launching its smart wallet, competition in the field of intelligent wallets is intensifying.
Transforming all wallets into smart wallets—this is not only a shared vision within the Ethereum community including Vitalik Buterin, but also the mission of Lukas Schor, co-founder of Safe (formerly Gnosis Safe). Although smart wallets currently represent just 1% of total wallet usage, he believes that "within three years, every on-chain wallet will be a smart wallet." This transformation brings immense opportunities as well as significant challenges.
Currently, over 8 million smart wallets built on Safe hold $100 billion in crypto assets. As custodians of this massive amount of value, Lukas Schor told Foresight News that their next focus won't simply be passive asset custody, but rather developing more proactive DeFi solutions to further increase the value of these assets.
Foresight News: Safe has an ambitious goal—to make all Web3 wallets smart accounts by 2030. In fact, you mentioned in a recent interview that you realized this goal might actually not be ambitious enough. Why is that? How far along are you toward achieving this?
Lukas Schor: Yes, it’s still our goal, and we believe this because we see ownership as a human right.
According to the UN Declaration of Human Rights, property ownership is a fundamental human right. In the digital realm, however, this right is often not fully granted because your digital assets—whether data or financial assets—are held by intermediaries. For example, you can only transfer assets between 9 a.m. and 5 p.m., when institutions are open for business; or you cannot revoke access to your personal data once granted. These limitations prevent true control over your assets, undermining actual ownership.
That's why we believe self-custody is essential—it's the path to full ownership of digital assets. However, self-custody in crypto today remains very primitive. You write down 12 words on paper and hope that paper never gets lost, otherwise you lose access to your funds; or you pray no one else finds it and runs off with your assets.
Especially when dealing with data or digital identity, such losses could cause serious harm—and sometimes irreversible damage. Money might be recoverable, and you can earn again, but your identity often cannot be restored. Therefore, figuring out how to securely and conveniently empower individuals with true ownership is critical.
To achieve this, smart accounts are necessary.
Writing keys on paper isn’t a scalable way to give a billion people ownership of digital assets. We need smart accounts—using phone-based keys and secure enclaves so that your mobile device becomes the "paper" controlling your account. The phone everyone carries is already a hardware wallet. But phones aren’t being used to their full potential today because current self-custody methods don’t allow them to act as real cryptographic signers on-chain. Some users still want trusted third parties involved in managing asset ownership, which is partly why we partnered with Swiss licensed bank Signum to serve as recovery agents for your wallet. This allows you to fully own your wallet while still having a fallback—if you lose your key, you can go to Signum Bank and request help restoring access.
The next billion users may require more support or friendlier systems. We aim to bridge the gap between niche self-custody adopters and mainstream future users. That’s ultimately why we’re confident about smart accounts.
Foresight News: So how far are we from that goal? Can you provide some reference data?
Lukas Schor: Looking at Safe—the largest smart account ecosystem today—we have nearly 10 million smart accounts, though more precisely around 8 million, holding approximately $100 billion in assets.
Safe was initially used primarily in high-value scenarios like treasuries and market makers. Now we're beginning to shift more toward mass adoption. Over the past year or so, roughly five million new users have adopted smart accounts. Yet compared to overall on-chain self-custody usage, this is still a small fraction—about 1%. But I believe within three years, 100% of users will use smart accounts.
We're now at a turning point. Every month brings significant progress. Within six months to a year, everyone will recognize we're moving in this direction, and initiatives like EIP-7702 will drive transformative change.
Smart Wallets—An Industry Upgrade Full of Opportunities and Challenges
Foresight News: Your website published a blog post in April discussing opportunities, challenges, and risks in smart account applications. However, the section on risks or challenges wasn’t elaborated much. Could you expand on that here?
Lukas Schor: Currently, user accounts on Ethereum are so-called “externally owned accounts” (EOAs), each MetaMask account being one such type. They are a protocol-level account type, whereas smart accounts reside at the smart contract layer, giving them programmability advantages. This enables features like adding recovery options or adding keys via smartphone. But this also makes them less standardized. Under the protocol, every EOA looks identical, but smart accounts can vary greatly in functionality and operation. This poses a challenge since applications like DeFi can’t easily support every possible variation in user behavior.
So we need new solutions to ensure these advanced functions work seamlessly with existing apps. Additionally, cross-chain interactions present challenges—each chain hosts a separate smart contract instance for your account. While this isn’t inherently problematic, changes made to your account on Chain A don’t automatically apply to Chain B. Instead of a unified master account across chains, you end up managing multiple isolated accounts—one per chain—which needs to be addressed.
Vitalik Buterin proposed a solution called Keystore Rollup. We’re collaborating with the Scroll team to implement a system that synchronizes and consolidates multi-chain accounts into a single identity.
These are challenges, but I believe they’re solvable and worth solving for long-term benefit. In the Ethereum ecosystem, core developers, Vitalik, researchers—all understand this transition is inevitable. Every account must become a smart account. The real question is *how* we get there—that’s where the conversation lies.
Foresight News: The Ethereum community broadly shares your vision—at least judging from Vitalik’s views—but he also pointed out potential issues, one being privacy: 'Simple operations like payments would require revealing more information than with a 20-byte address.' What do you think the ultimate solution to this issue will be?
Lukas Schor: It’s too early to say what the final solution will look like. Unfortunately, user privacy is often an afterthought. Venture capital underinvests heavily in privacy, and even users themselves don’t prioritize it until it’s too late.
However, I believe privacy solutions on Ethereum are crucial. Some will emerge from L2s and L3s, integrating privacy features so users interact mainly with L2s, app chains, or L3s. Then zero-knowledge proofs can settle those interactions back on L1, providing cryptographic privacy guarantees.
An interesting development in smart account research is invisible addresses—an idea to transform Ethereum into something resembling Bitcoin’s UTXO model (Unspent Transaction Output), where each transaction occurs on a fresh account. Each incoming payment goes to a new account, making incoming transactions unlinkable to previous ones. But then comes the practical problem: how do you manage hundreds or thousands of accounts? Smart accounts offer a solution here. Projects like FluidKey abstract away complexity, allowing users to manage everything through a single controlled account—a kind of master account that controls all invisible addresses.
Foresight News: There's also a phenomenon in the Ethereum ecosystem known as 'Where Vitalik points, everyone shoots.' Once Vitalik signals that turning all wallets into smart accounts is a clear goal, many competitors enter the space. Who do you see as Safe’s biggest competitor now or in the near future, and how will you compete?
Lukas Schor: This is probably one of the hardest questions I’ve been repeatedly asked, and I still don’t have a good answer.
What are we trying to achieve? We want every account to be a smart account and solve the associated problems. Leveraging the opportunities unlocked by smart accounts—that’s our driving force.
We believe that within three years, every account will be a smart account. This core belief guides us toward a unique path.
People often ask, “Are Trust Wallet or MetaMask your competitors?” But we’d rather be partners. In the future, they’ll likely need our expertise in smart accounts, and we hope to support and integrate with them. Imagine signing up on MetaMask, but underneath it’s powered by Safe. Long-term, Safe will focus on solving smart account challenges and capitalizing on opportunities, especially in DeFi and cross-chain interoperability.
In the next three to five years, I see Safe evolving into a kind of interoperability abstraction layer for Web3—you could even call it an operating system. I estimate about a hundred projects are heading in this direction. Some lack clarity or concrete solutions, but share similar visions with different approaches. This abstraction layer—or OS—will incorporate intent-based architectures. Today, projects like Uniswap and Connext are already doing related work involving smart accounts. In the future, Biconomy, ZeroDev, and even MetaMask may follow suit.
Cross-chain interoperability is part of this, abstracting network complexity away from users and developers.
Ultimately, we aim to contribute our knowledge and ecosystem to key parts of this vision. It’s unclear yet which problems we’ll solve independently, which we’ll collaborate on, or how things will evolve—so naming a true competitor is difficult. The landscape in five years will be entirely different.
Foresight News: One major purpose of introducing smart contract wallets is to improve the Web3 onboarding experience. To what extent do you think this helps attract Web2 users? Are there specific examples that illustrate this better?
Lukas Schor: Absolutely, user onboarding is a big part of it. We’re already simplifying the process—for example, letting users create an on-chain account using just Google login. No need to set up a new wallet; just log in with your existing Google account, and technology links it to a self-custodied wallet. Other methods include using your email address, Twitter ID, or even DNS records as on-chain identities.
This way, your website becomes linked to an on-chain account, and your phone or other devices authenticate via keys, enabling ZK-powered on-chain transactions and establishing a true on-chain identity. We also need to guide people out of custodial setups so they can actively engage with DeFi and Web3.
Currently, activity is low—many crypto holders keep their assets idle on centralized exchanges like Coinbase. These users need better ways to utilize their crypto. Smart accounts can serve as a bridge: you can withdraw crypto from custodians like Signum or Coinbase into a linked on-chain identity—a smart wallet tied back to your custodial account.
You use that wallet to log in, mint NFTs, etc. At that moment, you’ve moved assets out of custody. You can leave them in the wallet or move them back. About $100 billion is currently in DeFi, but much more sits unused because people avoid self-custody due to perceived risk and technical difficulty.
These barriers can be overcome with smart accounts. The stock market is worth $100 trillion—if we want crypto to reach $1 trillion or even $10 trillion in value, we need safer, easier solutions.
Foresight News: What about infrastructure? How does this upgrade affect existing infrastructure, and what challenges arise?
Lukas Schor: It may require upgrades to Ethereum itself, such as the EIP-7702 proposal. This would allow every current user account to become a smart account, potentially one of Ethereum’s major upgrades by year-end.
Right now, the market isn’t bringing in many new users—existing users are exploring new tools. So we need better upgrade paths for current users. EIP-7702 opens the door to smart accounts for all existing users.
Additionally, many other infrastructure components—developer tools, libraries—must adapt to this new paradigm. But the real inflection point comes when users start widely adopting smart accounts; everything else will gradually fall into place over time.
How to Further Increase Value of Billions in Assets?
Foresight News: Safe now manages around $100 billion in assets—a huge sum. Where will your expansion priorities lie going forward?
Lukas Schor: For Safe, the biggest change we hope to see is shifting from being merely a place to store large amounts of assets—which is relatively passive—to becoming a place where those assets are actively used.
Our focus will shift from TVL and asset storage toward enabling DeFi interactions that grow asset value. Using smart accounts, we can make DeFi safer and more convenient. Smart accounts offer many advantages: better security mechanisms, easier usability. For example, they allow users to allocate assets across different DeFi protocols. In case of a hack, enhanced safety measures can automatically withdraw funds, eliminating sleepless nights worrying about loss. They also improve UX—by solving cross-chain interoperability, users can seamlessly interact with DeFi across layers or infrastructures with a single click.
So we’ll increasingly shift focus from passive custody to enabling active engagement.
Foresight News: In the wallet space, what do you see as the next big thing? Where’s the biggest opportunity? In previous interviews, you seemed to suggest keystore could be a major opportunity.
Lukas Schor: Most wallets today are thinking about becoming “omnichain” wallets—bringing in users and letting them interact with apps without worrying about gas fees. On chains like Polygon that use non-ETH gas tokens, users must pre-load the correct assets.
Therefore, cross-chain interoperability will be integral to realizing the full potential of smart wallets. Projects like Avocado Wallet are working on this, and many others are experimenting with various approaches.
I’m not sure if keystore itself is a commercial opportunity, but it’s definitely a massive unsolved challenge. It may end up being more of a public goods solution. Several projects are researching and collaborating to solve it, but it likely won’t become a revenue-generating product.
Foresight News: Finally, let’s discuss regulation. This year, there’s been much debate around regulation and compliance in crypto, with major players under pressure—including Consensys behind MetaMask, and even Ethereum itself facing varying degrees of regulatory scrutiny. As the largest smart account wallet provider today, how do you view this? Do you feel any pressure?
Lukas Schor: We’re primarily infrastructure providers for smart wallets, so we’re generally not heavily impacted by local regulations.
Interestingly, regulatory concerns tie into the privacy issues mentioned earlier. Compliance and privacy protection will be two major, often conflicting, challenges. Enhancing privacy may complicate compliance, since obscuring information intentionally hides data typically required for regulatory purposes. I’m not particularly insightful on this topic, but I trust companies under greater pressure are actively addressing these issues.
To gain more positive recognition and support from regulators, we need to demonstrate socially valuable, meaningful use cases for crypto.
I think the industry has done poorly over the past few months, overly focused on meme coins and speculative activities—reinforcing the perception of crypto as a casino rather than a tool that improves lives. That’s why regulators remain skeptical and set boundaries.
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