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Key Takeaways
Safe has introduced SafeNet, a transaction processing network aimed at unifying the experience across blockchains. It is expanding from its established position as a leader in crypto asset ownership to the realm of asset usage.
Safe's strong market position is evident in its impressive metrics, including $100B in Total Value Locked (TVL), 6.8% of all USDC stored, and 2.74% of onchain transactions originating from Safe Accounts.
SafeNet's architecture, inspired by Visanet, consists of SafeNet Processors for execution guarantees and a SafeNet Liquidity Network for liquidity of crypto assets.
While Safenet shows promise due to Safe's strong user base and potential for bridging off-chain and on-chain assets, its architecture is still under development.
1. Background - Own Then Use, The Flow of Cryto Assets
Safe has announced Safenet, a decentralized transaction processing network that provides a more unified transaction experience across various blockchains. To understand the implications of this new infrastructure, we need to understand the general flow of crypto assets.
At its core, there are two main aspects of crypto assets: "Ownership" and "Usage" on-chain. Ownership means having verifiable control over the asset and the authority to manage it. Usage refers to performing various on-chain actions with these assets, such as transfers, approvals, and withdrawals. The on-chain operations have use potential due to its composability between dapps, where simple actions can create complex interactions—for example, earning US Treasury yields through a single swap to treasury-backed tokens.
Safe has established itself as the leader in the ownership aspect, with a vision to become crypto's ownership layer and a current TVL of approximately $100B. With Safenet, Safe is now expanding into the "Usage" domain.
1.1 Owning - Safe{Wallet}
Safe {Wallet} has been the leading wallet for on-chain treasuries and high-net individuals to securely manage assets. This TVL is similar to Binance TVL, and two times more than OKX’s TVL. It has become the defacto wallet within the crypto community.
Safe currently leads the smart wallet market with impressive metrics:
6.8% of all USDC is stored in Safe
9.7% of Cyberpunk NFT is stored in Safe
2.74% of onchain transactions originate from a Safe Account
Safe's Total Value Locked (TVL) is $66B, compared to centralized exchanges (CEX) like Binance ($116B), OKX ($19B), and Robinhood ($14B) [as of 2024.11.06]
Market share of Safe in the smart account landscape is also dominant.
Source: Smart Accounts Landscape
1.2 Using - SafeNet, Inspiration from VisaNet
The announcement of SafeNet signals Safe's move to provide infrastructure for "Using" blockchains. With Safe accounts holding $100B in assets and generating 2.74% of total onchain transactions, the platform is well-positioned to increase its market share.
What is SafeNet? While full details are yet to be revealed, SafeNet aims to create a decentralized transaction processing network that provides a unified experience across blockchain ecosystems. The network relies on two key components: (1) SafeNet Processors, which provide execution guarantees for security and speed, and (2) SafeNet Liquidity Network, which enables anyone to contribute by providing liquidity for SafeNet Processors to service users.
This seems to have taken inspiration from Visanet. Operated by Visa, it is the world's largest consumer financial transaction processing system. Its architecture includes these core components:
A global telecommunications network that handles payment processing, authorization, and settlement services.
Advanced risk management and fraud control systems. VisaNet connects merchants and financial institutions through secure gateways—VirtualNet IP and VirtualNet SSL—enabling real-time credit card transactions.
Transaction processing using the Visa Second Generation (Visa II) format across multiple financial networks. This format ensures that all transactions across the VisaNet system follow a consistent structure
In the case of SafeNet, the “global communication network” will be the blockchain and SafeNet processor. With this infrastructure in place, SafeNet can become not only a blockchain-wide transaction infrastructure, but also a global transaction processing infrastructure for things like Visa by linking transactions with off-chain VisaNet. I believe because SafeNet has this vision, it is emphasizing the slogan “Bringing the world's GDP on-chain.”
Source: Architecture – Safe Docs
2. Takeaway - Potential of Safenet and Is It Another Solver Network?
2.1 Two Potentials of SafeNet
I believe SafeNet is well-positioned in the market . Two core factors could drive its adoption:
Strong User Base Dominance: Safe leads the smart wallet sector in both TVL with $100B and transaction volume where 2.74% of total transactions originate from Safe accounts. This established user base enables integration of SafeNet features through both the app and developer SDK. A key growth area is worldchain, where Safe powers most of the wallets and 74% of transactions originate from Safe accounts. With numerous ecosystem projects preparing to launch, worldchain could generate substantial volume once SafeNet launches on mainnet.
Bridging Off-Chain and On-Chain Assets via Gnosis Pay: Safe maintains strong connections with Gnosis, having originated as its internal project before becoming independent. Through Gnosis Pay, users can spend cryptocurrency from their blockchain addresses at any Visa-accepting merchant. When combined with SafeNet's Liquidity Network, this creates an experience that bridges the gap between off-chain and on-chain assets.
2.2 Architecture Still Under Development
According to the announcement, the architecture resembles a solver network. Multiple projects are developing this infrastructure for cross-chain liquidity and general intent solving. Projects like Across and Relay Protocol are gaining market share by providing fast, cheap cross-chain swaps through their solver-based liquidity systems. In the general intent solving space, projects like Khelini and Essential are building solver infrastructure.
2025 is expected to see numerous intent-based and Chain Abstraction projects launch on mainnet. These developments will simplify complex action requests. However, key questions remain: which types of requests will gain user adoption, whether intermediary solvers can maintain profitability, and how effective coordination will be.
SafeNet's initiative is bold, and while Safe is well-positioned to leverage its userbase and brand, it should focus on optimizing specific actions like cross-chain swaps as the overall developments is in an early phase.
Source: With Intents, It’s Solvers All The Way Down | by Arjun Chand | LI.FI Blog
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