Crypto startup Argent wants to put an end to gas fees with Layer 2 wallet

Argent is officially launching its Layer 2 solution. The company is choosing zkSync as its Layer 2 scaling implementation. It is supposed to offer cheaper and faster transactions without any compromise on security.

If you’re not familiar with Argent, it is an Ethereum smart wallet for both iOS and Android that has been around for a few years. It is a non-custodial wallet, meaning that you’re in charge of your funds and everything you do is recorded on the blockchain.

Over the past couple of years, the biggest pain point with Ethereum transactions has been gas fees. It can be quite discouraging if you’re getting started with cryptos and your wallet says you have to pay $30, $45 or even $60 in gas fees to validate a transaction.

That’s why several teams have been working on ways to solve this issue. In order to bring transaction fees down, transactions could be handled off the main Ethereum blockchain (the Layer 1). And these projects are called Layer 2 solutions.

Some people believe there will be multiple blockchains (or sidechains) offering different advantages and drawbacks. Blockchains like Polygon (formerly Matic) or Avalanche are compatible with the Ethereum Virtual Machine (EVM), meaning that it doesn’t require a ton of work to move from one blockchain to another.

Others believe that some transactions will be handled off the main Ethereum blockchain. Essentially, transactions are sent to Layer 2 nodes so that they can be processed and batched together.

When there are enough transactions, a group of transactions is submitted to the main Ethereum blockchain. Once it’s on the main Ethereum blockchain, these transactions can’t be altered.

Zero-knowledge rollup implementations like zkSync are particularly cost effective as a validity proof is generated based on hundreds of transactions. This validity proof is then posted to the main Ethereum blockchain, and Layer 2 transactions can’t be altered because they won’t comply with the validity proof.

And this is what Argent picked as its scaling solution. “We waited quite a lot. We skipped a lot of short-term options to make no compromise,” Argent co-founder and CEO Itamar Lesuisse told me. “That’s why our approach has been a bit more opinionated,” he added.

The company promises gas fees for Layer 2 transactions that should be as low as $1 per transaction. 500,000 people have signed up to the waitlist ever since Argent started working on Layer 2 accounts.

“From Monday, you will start your life on L2, you’ll buy cryptos on L2,” Lesuisse said. Argent’s existing Layer 1 wallets aren’t going away, but they won’t be the default wallet. They’ll be called ‘Vaults’ to reflect the fact that they’re for wealthy individuals with millions of dollars worth of crypto assets.

With this move, Argent hopes that it can attract a new audience of mainstream crypto enthusiasts. Eventually, Argent wants to build a sort of financial super app for web3 and DeFi. “Revolut is really the inventor of the financial super app and we think we can go beyond,” Lesuisse said.

Users can buy cryptocurrencies directly from the app with a debit card or a bank transfer. The company has partnered with Ramp and MoonPay for the fiat-to-crypto transactions.

After that, users can exchange cryptocurrencies on a decentralized exchange in the app as well. Argent uses ParaSwap as a decentralized exchange aggregator to find the best trading pair depending on what you sell and what you buy.

Argent also lets you earn interests on your crypto assets through DeFi protocols from various partners, such as Yearn, Lido, Aave and Gro. “We kept it limited because the experience on Layer 2 is much more streamlined. The more concentrated demand is, the lower the costs are,” Lesuisse said.

Layer 2 represents a new start for Argent. In addition to low transaction fees, the company thinks the current experience with non-custodial wallet is not so great, especially because of the concept of seed phrases.

“This old model with a key and a Post-it note in your drawer will never be the way we manage money,” Lesuisse said. With Argent, there’s no seed phrase. You can secure your wallet with your iCloud account, or with guardians. Your friends can act as guardians and help you recover your wallet.

But Lesuisse is also well aware that most people just go to Coinbase and buy some cryptos. With today’s update, that’s what the company wants to change. “The biggest non-custodial wallet is MetaMask but our main competitor is centralized exchanges,” he said.