Published Jul 19, 2021
By Qredo Team
Qredo FAQ: Around the Network in 80 Questions
Newcomers to Qredo are often bursting with questions.
That's why we've compiled the most common queries into one single guide. From community creation to multi-party computation, read on to discover the Qredo Network in 80 questions.
Table of Contents
1. About Qredo
Who are the Qredo founders?
The story starts in late 2018, when Qredo was founded as a new blockchain venture by Anthony Foy and Brian Spector.
Where is Qredo based?
Qredo Ltd is an international company registered in the British Virgin Islands, with two regional offices in London and Sofia, and employees scattered across the globe.
Qredo Network is becoming an open-source permissionless protocol operating beyond geographical boundaries.
How big is the Qredo team?
Is Qredo hiring?
Qredo is always on the lookout for talent. Please send a covering letter and CV to email@example.com.
Who is in the leadership team?
Qredo boasts a world-class leadership team of cryptographic wizards, startup veterans, and legal specialists with decades of combined experience.
2. What Qredo does
Describe Qredo in a sentence
Qredo is a radical new blockchain infrastructure that delivers interoperability, lightning-fast settlement, and decentralized custody.
What is Qredo’s USP?
Qredo introduces a new paradigm: decentralized custody. This turns the blockchain into a vault, unlocking several benefits that solve real-world problems.
What problems does Qredo solve?
At the root of the problems facing the crypto market are centralized methods of private key management.
By addressing this, Qredo solves several problems for digital assets, including security, settlement, and managing operations at scale for institutions. For a full list, please refer to Qredo Use Cases in the White Paper or Lite Paper.
Who can use Qredo?
Multi-party computation (MPC) technology has previously only been accessible to corporates and institutional investors. But Qredo is opening it up to everyone.
We work primarily with traditional and crypto-focused institutions that have the most pressing governance and security needs. This includes hedge funds, asset managers, and corporate treasurers who have been slowly integrating digital assets,
In the spirit of open source software, we are glad to make Qredo's institutional-grade security and governance available to your average crypto holder.
Which projects are your closest competitors?
Qredo is radically new infrastructure, and we are not aware of any other decentralized protocols competing on the same spectrum of innovation and utility.
Nor does Qredo compete with other blockchains. Rather it acts as interoperable middleware; providing a secure way to transfer ownership of digital assets across different chains. We look to offer the widest possible support of other blockchain projects to meet community demand.
3. Community and collaboration
Do you take into account community feedback and demands?
From the beginning, the design of Qredo has been based on extensive surveys with the community, including institutional investors. We continue to respond to feedback as the Network develops.
How are you planning to create community?
Community is everything. We are creating sustainable community in several different ways:
Creating community incentive programmes to encourage people to build on Qredo
Setting up local community managers in as many places as possible
Building the Qredonian ambassador program
What is the Qredonian ambassador program?
Qredo ambassadors—also known as Qredonians—are invited to take part in a range of promotional activities. Become a Qredonian.
How do you plan to spread awareness about your project in different countries?
Translation of blogs and documentation
Expansion of regional communities
Expansion of developer ecosystem
Outreach and engagement with potential partners
Social media activity in multiple languages
What are your current partnerships and future plans?
Qredo has formed strategic partnerships with some of the biggest titans of the digital asset industry, several of whom are building on the Network.
Can anyone access Qredo Network?
Qredo will be an open-source network that can be accessed from anywhere with an internet connection.
4. Fundraising history
How much capital has Qredo raised?
As of November 2021, Qredo has raised ~$50M:
|Seed funding round||Q1 2019||$11M|
|Private Token Sale||Q2 2021||$17.4M|
|Public Token Sale||Q2 2021||$18.1M|
What’s the difference between the seed round and token sales?
The seed round raised initial capital for Qredo Ltd, the company supporting Qredo Network.
The token sales enabled the Qredo community to support the Network, and distributed the QRDO token in a critical step on the pathway to decentralization.
Are there plans to raise more funds?
Qredo is planning a Series A funding round to gather more financial support for Qredo Ltd.
Why have so many investors chosen to invest in Qredo?
Many of Qredo's investors recognize the distinct role that Qredo plays in bridging the gap between DeFi and TradFi, bringing institutional investors closer to the digital asset ecosystem.
What characteristics make Qredo "radical" blockchain infrastructure?
Qredo replaces private keys with a trustless implementation of multi-party computation (MPC) which provides a flexible way of signing transactions that meets institutional governance and security needs.
What is Qredo built on?
The Qredo Network’s blockchain runs on Tendermint, which achieves instant finality enabling lightning-fast settlement.
Is Qredo compatible with EVM-based chains?
Qredo V1 is not yet compatible with EVM-based chains. This functionality will soon be available through our MetaMask integration, and eventually supported natively in V2.
What is decentralized custody and what does #TheNetworkIsTheVault mean?
On Qredo Network, shares of the private key controlling digital assets are contained in the MPC nodes. Together, the nodes generate a digital signature to sign transactions without ever producing a private key.
The MPC nodes are distributed between security-hardened Tier 4 data centers distributed across global financial hubs, and controlled by the Qredochain.
The Qredochain is a Layer 2 network that provides an immutable registry of assets and activity. Each custodial operation—each transaction, each signature, and each change to wallet custodial policies—is mined into the blockchain. In this way, the network becomes the vault.
How is Qredo involved with Apache Milagro?
In 2016, Qredo Co-founder Brian Spector launched Apache Milagro, a set of core security infrastructure and crypto libraries purpose-built for decentralized networks and distributed systems.
Qredo operates under the umbrella of the Apache Foundation. This opens our project to a vast network of contributors, and allows enterprises to license under the well-established and broadly used IP protection of the Apache License.
What type of encrypted messaging do you use and is it secure?
Qredo's Layer 3 protocol is based on Matrix, a decentralized messaging protocol. The security of Matrix is such that it is used widely within both UK and French governments, and has been adopted by a number of defense consortiums. Matrix is open source with a number of implementations and a wide developer community.
How has Satoshi’s ethos inspired Qredo?
Satoshi identified the key problem with traditional finance as the amount of trust required. Thus he removed trust from transactions with Bitcoin. Qredo takes the same approach to removing trust, but from custody.
6. Building on Qredo
Can anyone build dApps powered by Qredo Network?
Absolutely. Qredo is an open Network and the core cryptographic libraries are currently open-sourced through Apache Milagro.
We provide an API to build apps on Qredo Network. Contact a product specialist for more information or to apply for access.
Does Qredo offer development tools, or an SDK or API?
Like any well-built enterprise software, Qredo Client will offer an easy enterprise integration path and well-documented APIs. Qredo’s Client Integration Libraries will extend to include (Python, Node.js, Java) to enable rapid integration and standalone application development. As a result, support for TradFi modeling and trading system execution will be seamless.
What kind of dApps are being built on Qredo Network?
There are multiple dApps being built on Qredo Network today, including:
Deribit's solution for integrating Qredo’s self-custodial wallets
Genesis Trading's solution for Travel Rule compliance
Our partner HedgeGuard has built a Portfolio Management System on Qredo Network that makes internal reconciliation more efficient by enabling instant low fee transfers between accounts.
7. Multi-party computation
Multi-party computation (MPC) is a cryptographic tool that allows multiple parties to make calculations using their combined data, without revealing their individual input.
Why is MPC such a breakthrough?
MPC is a breakthrough because it allows one to not only conceal information (as with other forms of cryptography dating back to the Caesar Cipher) but to compute on that data without revealing it.
How does MPC replace private keys?
In the context of digital assets, MPC can be used to replace individual private keys for the signing of transactions. MPC distributes the signing process between multiple computers.
Each computer possesses a piece of private data representing a share of the key, and together they cooperate to sign transactions in a distributed way.
What is the difference between MPC and multisig?
The key difference between MPC and onchain multisig wallets is in the implementation of the signature scheme.
While most multisig wallets have several keys that are used to sign multiple onchain transactions, multi-party computation takes the signing process off chain: There is only one single signature created on the Layer 1 chain, which is signed by distributed nodes that contain secrets representing parts of the private key.
This way of distributing the signing process has multiple advantages:
Transactions can be signed faster because they don't rely on slow underlying chains.
Network fees are significantly lower because the signatures are computed off chain.
The solution is blockchain-agnostic. While multisig wallets are typically tied to a specific blockchain, MPC works on the standardized cryptographic signature algorithm (ECDSA) that can be implemented across 95% of blockchains. This means there is no need for multiple wallets for digital assets on different blockchains.
Enhanced privacy, as the transactions are not visible on chain, preventing signing arrangements from being exposed to potential hackers.
What is Qredo's consensus-driven MPC?
A consensus-driven multi-party computation (CD-MPC) network is created when the MPC nodes operating the MPC protocol refer to an on-chain dataset for instructions and affirmation of the operations. The MPC nodes inherit the state of the blockchain and the verification of transactions that the validators have performed.
How secure is Qredo's implementation of MPC?
Qredo's implementation of MPC is Gennaro and Goldfeder’s algorithm (MPC-GG18) for implementing MPC over ECDSA signatures.
This is peer-reviewed and will include proactive security measures such as:
‘Identifiable Abort’ that can identify bad actors and exclude them from the calculations.
Key rotation between MPC nodes — this makes the protocol a moving target, preventing stale key shares from lying around that could be gathered, and making it extremely unlikely that a malicious actor could steal all the key shards.
Qredo’s CD-MPC network also has other inbuilt defense mechanisms such as network obfuscation and node segregation. Read more about Qredo's unique implementation of MPC in the Yellow Paper.
In Qredo V1, MPC nodes are controlled by the team. How do you make sure that the team will not manipulate the system?
Each MPC node must check with the Qredo blockchain to confirm that the item they are partially signing exists. And, to exist in the chain, the item must have satisfied all the signing requirements.
Each MPC node is contained within a geographically-distanced and tamper-proof enclosure. To manipulate the system, two nodes would need to be simultaneously compromised.
Finally, no single team member has access to both the MPC nodes and the blockchain.
What are the risks of MPC?
As most MPC implementations rely on the peer-reviewed, industry-standard Gennaro and Goldfeder’s algorithm (MPC-GG18), the key difference between them is not in the MPC protocol itself, but in the way the MPC nodes are controlled.
When MPC nodes are centralized on the infrastructure of one organization, they control all the signatories, meaning they might as well be holding your private key. This creates enormous counterparty risk, as assets are not fully protected from internal employees gone rogue, cloud providers, or other colluding partners that might decide to empty the wallet.
At the same time, centralized databases create vulnerabilities for external hackers to exploit. For example, SGX cloud infrastructure has been repeatedly breached, with multiple researchers managing to crack open the servers and retrieve cryptographic keys.
Read more about the dangers of centralized implementations of MPC on Deribit Insights.
What unique features does Qredo have that make it better than competing solutions?
Qredo sits at the intersection of permissionless DeFi networks and centralized custodians.
Permissionless DeFi protocols remove intermediaries, allowing traders to rely on math alone. Don't trust, verify. On the flipside, decentralized protocols are not designed with capital market players in mind; they cannot offer the service and integration support needed by institutional traders.
Centralized custodians offer custodial controls for capital market players, including whitelists, KYC/KYT transaction data, customer support, compliance, workflow authorizations and corporate governance. However, these custodians act as a trusted counterparty, opening traders to the possibility of loss from external hacks or internal corruption. And as digital assets are controlled by the vendor in an enclosed walled garden, they can't be deployed in DeFi protocols or staked to earn yield.
Qredo combines the institutional controls of traditional custodians with the permissionless innovation of DeFi.
8. Security and compliance
What kinds of problems associated with private keys does Qredo eliminate?
While Satoshi took the trust out of transactions with Bitcoin, centralized methods of managing private keys reintroduced trust to the crypto market.
Storing vulnerable keys in databases, and shunting them offline in hardware and paper wallets, has led to not only billion dollar security breaches, but siloed liquidity and market fragmentation; assets are locked away and can't be readily deployed in the DeFi ecosystem, with accessibility and granular control sacrificed for the sake of limited security.
How does Qredo work around the need for users to protect and store private keys?
Qredo replaces centralized private keys with a computational process where separate nodes collaborate to sign transactions. This is known as multi-party computation (MPC).
How do the authentication and transaction signing systems work without the private keys?
When an asset owner wants to sign a transaction or generate a public key to make a deposit, they coordinate with their appointed custodians via the Qredo network to confirm the asset ownership on the blockchain, creating a consensus that enables the asset owner to invoke the MPC Nodes to run the MPC protocol from their Qredo Wallet.
Has Qredo Network been tested and audited?
Blockchain security firm Quantstamp has audited the token repository. NCC Group has conducted a security assessment of the Apache Milagro MPC library, and Zokyo has pen-tested the web app and iOS app.
The protocol has also been peer-reviewed by world-renowned cryptographer Dr. Michael Scott. Dr. Scott is the former Head of Computing at Dublin University and the originator of the MIRACL library, fork of the milago library. The MPC code is part of this library.
What is Qredo's approach to regulation?
We continue to work with regulators around the world towards the shared goals of safety, security of assets, and the elimination of systemic risk. However, decentralization is difficult for regulators, who are only just waking up to the huge benefits it will bring to financial institutions and financial infrastructure.
The path of least resistance for Qredo would be to submit, and chase regulatory approval in the countries where we have users. This is the approach of many others exploring the MPC space. However, we believe that seeking regulatory approval is a short-term win and has several downsides. Firstly, it breaks many of the cypherpunk fundamentals including the 'not your keys' ethos; secondly, it puts Qredo in competition with the institutional users of the network; finally, it recreates many problems of the centralized financial world.
The largest firms operating in this manner have already become centralized points of systemic risk for crypto, echoing similar structural issues to those that preceded the financial crisis of 2007–2008. When Lehman Brothers failed, some assets were locked in for nearly a decade before they could be released through the administration process. We must not sleepwalk into a similar position for crypto. Imagine the chaos if one of the largest centralized MPC providers today went into administration.
As a decentralized custody network, Qredo does not fit into this category of centralized MPC operators that have access to assets and participate in signing transactions. Doing so makes them custodians and they must seek approval and authorization in every jurisdiction they serve.
How does Qredo work with custodians?
Qredo is working with major crypto custodians to help them unlock prime broker capabilities. This includes lending, liquidity access, and helping clients protect leveraged positions by instantly transferring any asset, on any chain, to another user of the network. For example, a custody team in France is close to finalizing their authorization process with the Autorité des marchés financiers (AMF) to gain regulatory approval as a custodian. They are using Qredo Network as the primary security and operational control framework for their assets and have spent time with the regulators taking them through this process and the role Qredo plays.
How does Qredo approach compliance demands across different regions?
Qredo has been developed as an enterprise-grade security network, and we have worked with various global regulators to find the line on which Qredo can remain a globally accessible tool as a decentralized network, without crossing into regulated territory.
Access to Qredo’s security standards is not limited to financial institutions or regulated entities, and Qredo Network can be used by organizations around the globe. This includes financial institutions that need to demonstrate to their own regulatory authorities that the control and security of assets are controlled by the firms’ own governance standards, and that any existing regulatory approvals can be easily extended to cover crypto assets.
How does Qredo facilitate compliance with emerging regulations like the Travel Rule?
Qredo's Travel Rule solution is based on a Layer 3 encrypted, decentralized communication network (Matrix), which enables the development of secure applications to bridge the gap in capability that exists between TradFi and DeFi.
For example, using Qredo’s Client software and open source Integration Libraries (Python, Java, .NET), financial institutions will be able to craft messages containing Travel Rule information about a particular transaction between regulated Virtual Asset Service Providers (VASPS), or messages sent to or from VASPs.
Do you have insurance for assets held on Qredo?
Yes. We aim to blend the best of TradFi with DeFi. Qredo has insurance against malicious intent and theft from Lloyds of London, underwritten by Sompo.
In 2022 we plan to offer a bespoke in-platform insurance product. Read more about our Seven Lines of Defense.
Compared to custodial wallets, will my assets be safer if my phone or seed words are hacked?
With Qredo, we allow you to take full control and responsibility of your wallets, adding an extra layer of security through governance (initiate transaction, then approve via custodians).
If your seed words are compromised, then an attacker can attempt to restore your account to their phone, however, they would still need access to your email account to verify the restore attempt.
How can organizations use Qredo to implement bespoke digital asset governance?
The Qredo Organization Account allows multiple users to be added to an account and allocated different roles and permissions. This allows teams of all sizes — from individual families to corporate treasurers and asset managers — to delegate signing and access permissions to reflect governance needs.
The following basic roles can be configured for different purposes, and the permissions of each role can be customized.
Administrators can create organizations, add and remove members, and edit member permissions. They can also control all trading and transfer activity.
Fund Organizers have permissions over trading and transfer activity.
Approvers can approve transactions.
Traders can initiate transactions and view necessary addresses.
Learn more about Qredo's cryptoasset governance and compliance features.
What is the QRDO contract address?
What is the purpose of the Token Sale?
The Qredo token plays an important role in incentivizing activity on Qredo Network.
The token sale is a critical step on Qredo's pathway to decentralization. This will ultimately lead to the Network becoming completely owned and operated by the community: Instead of the team making decisions, token holders will be able to vote on proposals and execute on them.
How many tokens will be minted? And how many tokens will be locked by the team?
There is a hard cap of 2 billion on the total supply of QRDO tokens, which will be introduced into circulation via two methods: a vesting schedule and inflationary emissions.
One billion tokens (50%) are allocated to early stakeholders, including the Qredo core team, shareholders and contributors. Tokens are also allocated to treasury management, bootstrapping the ecosystem, and for initial validators.
How will tokens be efficiently distributed to the respective stakeholders?
To ensure sustainable Network growth, there will be an initial lockup period in which early investors have the ability to stake tokens on the platform to earn rewards, During this time withdrawal of QRDO from the Network will be limited. Read more about the vesting schedule.
How is Qredo’s economic system different?
Unlike Layer 1 tokens that only reward validators for securing the network, QRDO is tailor-made for a Layer 2 solution and designed to reward all Network participants.
How does Qredo drive growth by considering the incentives of all network participants?
Qredo has created a user-centric tokenomics model that rewards network activity through multiple innovative incentive structures.
What are the fees for using the Network?
Decentralized custody is free
Transfers to other Qredo Network users cost 0.5BPS* (charged from the underlying asset)
Atomic swaps between Qredo Network users cost 0.5BPS for both the Maker and Taker
Withdrawals are free, with Qredo charging only gas/miner fees to cover transaction costs.
Deposits are free
*One basis point is equal to 0.01%, or 1/100th of 1%.
How can I earn Qredo Tokens?
You can currently earn QRDO by Auto-Staking in your Qredo Wallet.
In Qredo V2, the Network will has six types of users. Each type of user — listed below — is rewarded with a unique combination of fee-based and inflation-based compensation.
Market Makers that continuously provide quotes for a given digital asset.
Validators that take turns validating, proposing and voting on transactions to be included in the next block.
Traders that atomically swap digital assets.
Custody Users that safely custody digital assets.
Liquidity Providers that add liquidity to Qredo’s Loan Pools
Borrowers that take out loans of varying duration.
Read more in the Qredo Token Paper.
What is the role of the Treasury Fund?
Much like a corporate cash reserve, the Qredo Treasury Fund is allocated for corporate activities such as acquisitions.
What are the requirements to become a Validator?
Validators are required to deposit acquired QRDO tokens into a special Validator staking wallet in order to participate in the protocol. More details will be available soon.
Is it possible to stake tokens with Validators?
Yes. QRDO token holders will be able to add their balance to a Validator’s balance in exchange for some of the rewards the Validator receives.
We are aiming to bring the first set of validators onto Qredo Network by the end of 2021. You will recognize the names as leading crypto firms.
What were the initial transactions made from the QRDO token address at the end of June 2021?
The first few transactions were made in preparation for the token distribution.
Once the contract was deployed, QRDO tokens were distributed to 100 Qredochain owned addresses for improved security and efficiency. This approach is more secure than keeping the minted tokens in a single ethereum address and prevents bottlenecks by providing multiple ethereum wallets to send tokens from.
21/6/21: QRDO tokens created and ownership transferred to Gnosis Safe
QRDO ERC20 token contract deployed: https://etherscan.io/tx/0x224207adc28f03fb7a5f34812c98a96c5210c1590dce2f9b7bc4eb33dbb45f57
1B QRDO transferred to Gnosis Safe: https://etherscan.io/tx/0x2fac6b1d99ecf8d3c56a002d5534b1ecea24d5e1308cd2ee82ebb4c03eae6382
Contract ownership transferred to Gnosis Safe: https://etherscan.io/tx/0x9e073dd844c71f3621339dbdf881507997299b9d0ca2de92e36ee3e5504a7a2b
28/6/21 - 1/7/21: Distribution for enhanced security and efficiency
1B QRDO transferred from Gnosis Safe to Qredo Distribution Contract: https://etherscan.io/tx/0x565a7eec555e7a5cc2af16a4e875b1d846dd6dda21e9df8899bffb465cb49e03
Internal distribution of QRDO to 100 L1 addresses: https://etherscan.io/token/0x4123a133ae3c521fd134d7b13a2dec35b56c2463?a=0xb289183997df05094c60fd65431211183f22aecc
10. Tutorials and technical papers
What are the different technical papers about?
The Lite Paper provides a synopsis of Qredo for a general crypto audience.
The White Paper gives a detailed view of Qredo for an advanced audience.
The Token Paper covers Qredo's crypto-economic model and tokenomics.
The Yellow Paper dives deep into the code and cryptography underpinning Qredo.
Do you have tutorials on how to use Qredo?
What has Qredo achieved so far?
To get all the details of Qredo's development, including key dates and technical milestones, read our blog: The Story of Qredo.
What is Qredo's roadmap?
Please download the Lite Paper for the full roadmap.
What is Qredo's most ambitious goal?
Qredo is uniquely positioned to accommodate the multi-trillion dollar flow of assets expected to be — one day— securitized on the blockchain. The Network will also help open up new markets by bringing together this world of tokenized securities with DeFi and digital assets.
What is your plan for development in DeFi?
As an interoperable Layer 2 network, Qredo acts as middleware—bridging the gap between incompatible blockchains and offering direct access to DeFi protocols through a single interface.
We are now offering access to Ethereum-based DeFi for institutions through MetaMask Institutional, and will soon be bridging to protocols on other blockchains.
Will Qredo accommodate NFTs?
Any product secured by a private key can theoretically be secured on Qredo Network.
At present, Ethereum non-fungible token (NFT) standard ERC-721 is supported via Qredo's integration with MetaMask Institutional.
Could you tell us about your R&D department and your work on product development within Qredo?
Qredo's Research and Development Division — Qredo Labs — designs and builds software to help accelerate digital asset adoption and successfully bridge DeFi and TradFi.
What is the difference between Qredo V1 and Qredo V2?
The big difference is that Qredo V1 is decentralized infrastructure under the centralized control of Qredo Ltd, while Qredo V2 represents a fully decentralized approach to crypto asset custody, delivery and settlement.
In V2, the Qredo team is taken out of the picture and nodes are controlled by independent parties— removing counterparty risk and enabling all users to trade and store assets on a truly trustless network. The network and community will govern itself through a Decentralized Autonomous Organization (DAO)
Alongside the evolution to a fully decentralized form, Qredo V2 unleashes a new set of innovative technical benefits:
Full compatibility with EVM-based chains.
Qredo Layer 3: A secure, end-to-end encrypted decentralized conversation replication network that will handle everything from machine-to-machine data exhange to providing an audit trail for regulated pre-trade communications.
Loan Pools that will provide access to highly leveraged trade credit, as appropriate for flash loans or yield farming.
Dark pool trading in the next evolution of Liquidity Hub.
Full details on Qredo's pathway to decentralization can be found in the White Paper.
Still searching for the answer to your question?
Tag @QredoNetwork on Twitter with the hashtag #AskQredo to get a response.