Loop, a new cryptocurrency firm, is trying to make Web 3’s payment rails a little less difficult for its crypto-paying clients. Particularly those underlying newsletters, employee payments, and other recurring transactions.
According to CEO Eleni Steinman, the firm has received $4 million in initial capital, headed by Andresseen Horowitz. She was a former strategist of bloXroute Labs and has been working on Loop in secret with co-founder Shane van Coller, who is also an alum of the mempool-focused business.
They left bloxRoute to address one of the wallet pain points identified by Steinman as a barrier to Web 3 growth: recurring payments. A Spotify client may set up his credit card to automatically pay the monthly fee. In crypto, however, he would have to remember to sign the outbound transaction 12 times a year.
When decentralised autonomous organisations (DAO) and multisig wallets are added to the mix, recurring payments become even more difficult, according to Steinman. Users must authorise outbound transactions in crypto wallets every time they pay.
The Loop delegated the task of processing user payments to an automated smart contract. Once granted, it will automatically take predetermined quantities of cryptocurrency from their wallets, sparing them the effort of, say, re-signing transactions for a $20 newsletter subscription every month.
Such an arrangement could frighten security hawks, particularly in this day and age of million-dollar crypto attacks. However, Steinman believes Loop’s smart contracts will be resistant to abuse. According to her, only the counterparty firm may remove user funds from Loop’s smart contracts. They’re also hard-coded to avoid “unlimited allowance functions,” which may otherwise drain wallets.
