How to Set Up a (Gnosis) Safe Wallet Step-by-Step
When signing transactions or handling the private key of a typical wallet, it is controlled by a single source and belongs to an individual. However, this setup has limitations. For instance, imagine an organization having a wallet being controlled by one person; this means the person has control over the funds in the wallet, which is not optimal and exposes the organization to risk. That's where multi-signature wallets come in. A multi-signature wallet is a type of cryptocurrency wallet that distributes authority among multiple individuals, requiring multiple private keys to sign and authorize transactions, which means that the approval of more than one person is necessary before a transaction can be executed, adding an extra layer of security to prevent unauthorized access to funds. They are mostly used by businesses or organizations that need to share control over cryptocurrency funds. For example, a company might use a multi-signature wallet to store its payroll funds, with the CEO, CFO, and HR manager each having a private key. This would ensure that no one person could access the funds without the approval of the other two.
Safe Wallet is a popular multi-signature wallet that is easy to use and has a variety of features, which will be detailed in this article. Come along!
What is Safe?
Safe, previously known as Gnosis Safe, provides a smart contract wallet designed for Ethereum that primarily provides advanced security and management features for storing cryptocurrency assets but also extends its capabilities to various decentralized finance (DeFi) and blockchain applications.
Key Features of Safe
Safe’s various features make it unique and one of the best wallet options in the market. Let’s examine them.
Multi-signature
The multi-signature feature of Safe is one of the major and important features that makes so many users want to use Safe. This requires that multiple authorized owners (like a 2 of 3 setup) must approve a transaction before it can be executed. This prevents unauthorized transactions, which has become very useful in cases of organization/community wallets, where more than one person is required to authorize a transaction before it occurs. The multi-sig feature adds an extra layer of security by ensuring that no single individual has total control over funds.
Customizable Access Controls
Admin functionalities enable the configuration of daily limits, whitelists, owner policies, and other advanced access controls. Highly adaptable security measures.
Secure Storage
Safe provides a secure storage solution for storing ether and ERC-20 tokens. It uses smart contracts on the Ethereum blockchain to ensure that funds are safe.
Backup and Recovery
Backup and recovery are two of the major features of Safe; it offers a backup and recovery mechanism in case of lost private keys to ensure that users can access their funds even if they lose their private keys. Account recovery is also possible through social mechanisms like friends and family without compromising funds.
Account Abstraction
Safe Wallet implements account abstraction to abstract away the complexity of Ethereum accounts that come with private key and public key coupling. This makes it easier for users to manage their assets. Users can interact with Safe using their preferred wallet without needing to worry about managing private keys.
Multiple EVM Support
Safe supports multiple Ethereum Virtual Machine (EVM) blockchains, which are Ethereum, Polygon, Binance Chain, and Avalanche, making it versatile to work on multiple blockchains.
Additional Benefits of Using Safe
Aside from the impressive features Safe offers, here are some other benefits of choosing this technology.
Reliability
The core contracts of the Safe have been formally verified, meaning the code has been mathematically proven to be secure and bug-free.
Supports Many Integrations
Can be used with a variety of wallets and services like MetaMask, hardware wallets, DeFi apps, and more.
Growing Institutional Adoption
Over $1 billion in crypto assets are now secured on Gnosis Safe as it sees increased trust.
Safe Wallet represents a major improvement in security, protecting against risks and providing institution-grade crypto management. For these reasons, it has become an important wallet, especially for larger asset holders.
Tutorial: Step-by-Step Guide to Set Up a New Safe Wallet
In this tutorial, we will be using a test network to set up our Safe account. Before we jump in, please examine the prerequisites for what you need to know.
Prerequisites
Setting up a Safe account requires the following:
Knowledge of Blockchain.
Understanding of Ethereum Accounts and how they work.
Knowledge of Externally Owned Accounts and Contract Accounts.
Basic understanding of the use of Private Keys in an Ethereum Account.
Metamask wallet is completely set up.
Now, follow along to set up your own Safe Wallet!
Step 1: Connect Wallet
Navigate to https://app.safe.global/welcome. Make sure your Metamask wallet is on the Sepolia network.
At the top right of the Safe website, you should see text in red: Connect wallet. Click on the dropdown and click the green Connect wallet button.
Alternatively, you can just click on the Connect wallet button on the page without the need to click on the dropdown.
After clicking on any of the Connect wallet buttons, a modal will come up. Select any wallet of your choice, but for this tutorial, we will be using Metamask since we already have Metamask installed and set up.
Metamask will pop up. Click on the Next button, and click on the Connect button.
Now your Metamask is connected, click on the Continue with MetaMask button.
Step 2: Create a Safe Account
You will be redirected to another page for you to Create a new Safe Account. Give your Safe a name. This is for your convenience, just in case you have more than one Safe. You will be able to identify them with the given names.
Click the Next button after filling out the preferred name for your Safe.
Step 3: Configure Your Safe Account
This will take you to a page where you can set the owners of the Safe account. Remember that with Safe, you can set multiple owners who must authorize a transaction before it can be executed. This is where you set those owners.
Click on Add new owner. You can give the owner a name, or you can use the default value: Owner 2. Copy and paste the address of Owner 2 in the input field beside the owner name.
Click on Add new owner again to add the third owner. Paste in another account address in the input field beside Owner 3
NOTE: The address of the first owner is the address of the connected account on Metamask.
The next thing to do is to select the threshold. This is basically the number of confirmations that must be reached before a transaction is executed. We have added three accounts as the Safe account owners, and we need to set how many of these accounts have to authorize a transaction before it is executed.
From the Threshold dropdown, select any number of your choice; for this tutorial, we will be selecting 2.
After selecting the threshold, click on the Next button.
Clicking the Next button will take you to a preview page where you will preview all the Safe account setup you have done. It will also show you the estimated network fee you will pay to initiate the transaction and complete the account setup.
Step 4: Confirm Your Transaction
Select the Next button. This will take you to another screen, and Metamask will pop up for you to confirm the transaction. Click on the Confirm button on Metamask. After a successful transaction, you will see a page with the text: Your Safe Account was successfully created!
Click on the Start using Safe {Wallet} button.
Step 5: Receive Funds with Safe
After successfully setting up the Gnosis Safe account, we need to start using the account we have created. Using the account involves receiving funds, sending funds, and signing a transaction. Let’s proceed and learn how to do this.
The first step to using the Safe account is to receive funds. Click on the Receive button and copy the address.
Send some Sepolia ETH to the copied address. In this case, 0.2 ETH was sent. The ETH that was sent will reflect automatically in your Safe account.
After receiving the ETH, let’s now send it back to the wallet address.
Step 6: Send Tokens
Click on the Send button and Select the Send tokens button.
You will be redirected to another page; paste the address of the account you want to send tokens to, type the amount of token you want to send (must not exceed balance), then click the Next button.
The next page is where you will need to sign the transaction. Remember that two of the owners of this Safe account must sign the transaction before it is executed.
After signing the transaction, it will be added to a queue. Connect the second Safe account owner. You will see a notification informing you that A transaction requires your confirmation.
Now click on View transaction:
Alternatively, you can also click on the Transactions tab on the side menu; you should see a transaction with a statement: Needs your confirmation. Select the dropdown icon beside the statement to view transaction details.
Once you are done clicking on View transaction, you will see the Transaction details page; click on the Confirm button to authorize the transaction.
On the next page, click on the Execute button and confirm the transaction on your Metamask when it pops up.
After confirming the transaction, wait for the transaction to process, and you will get a “Transaction was successful” message. Click on the Finish button.
Congratulations! You have successfully used a Safe account to receive and send funds using the Multi-signature feature of the wallet. You can further explore and play around with other features and tabs on the side menu.
Safe in the Ecosystem
Apart from being a wallet that has a multi-signature feature, Safe also supports a wide integration with a range of other tools. Safe can be integrated into some tools and platforms, such as decentralized exchanges (DEXs) and governance platforms, making it safe and convenient to manage digital assets across different DeFi protocols and dApps.
Safe also supports not only ERC-20 tokens and native currency but also non-fungible tokens like ERC-721 and ERC-1155, making it a versatile platform for managing a wide range of digital assets.
Covalent recently added Safe details to the transaction endpoints! You can read more about it here.
Conclusion
Safe, in short, is a secure and flexible way to manage cryptocurrency, especially for teams or businesses. Its multi-signature feature means more than one person has to approve transactions, making it safer. It's easy to use, works with various blockchain platforms, and supports different types of digital assets, including NFTs. Safe is a smart choice for those who need strong security and shared control over their crypto funds. As the crypto world grows, keeping an eye on Safe's new features could be really useful.