It was revealed that Keybase has accepted an undisclosed investment from Stellar. While the terms of the deal aren't known, the startup wasn't shy in boasting about the alleged size. The size in fact was so large that the company now says it won't need to pursue a Series B round at all which is no small feat. Founded in 2014, Keybase is built around improving end-to-end encryption, a goal for which it has secured $10.8 million in venture funding in a round led by Andreessen Horowitz. Thursday's deal, however, isn't a typical VC round because Stellar isn't taking a seat on the Keybase board. Chris Coyne, co-founder of Keybase, explained:
"It's a very friendly and mutually beneficial arrangement. It's significantly less formal than a traditional venture round."
Stellar is working with Keybase through a special instance of SDF’s partnership grant program. Keybase has created a general set of cryptographically secure tools (chat, file storage, git) which encrypts the data of a user's devices without any need for them to handle cumbersome PGP keys (or even see them).
Stellar's lumens could bring additional advantages to Keybase users. For example, one feature of lumens is its ability to work as IOUs for fiat, backed by institutions (such as banks) that can be transferred between users. Using blockchain, these fiat-backed lumens could easily cross borders, so a French user could pay in euros to a British user who would receive pounds, all for tiny fees subtracted from the transaction.
We’re most interested in their ground-breaking effort to link strong cryptography to real-world identity. We see a future where, say, I can send my friend 100 XLM, and, via Keybase, I can send it to her by knowing only her Twitter or Reddit handle. I won’t need some long string of digits as a key, just a human-readable username that I already know. In short, I can interact with her financially in the same way I interact with her socially. The end product would be like a global, decentralized Venmo, where you can send around every asset under the sun, not just your local currency—that’s where money is heading, and we want to get Stellar started along the path.
In this way, whatever Stellar is investing in Keybase to build for the lumens ecosystem, Coyne seems to hint that the idea is bigger than a mere wallet.
"There will be a reveal later this year when the product launches. We will definitely make person-to-person cryptocurrency transactions a lot easier."