Launch HN: Hedgehog (YC S21) – Cryptocurrency Portfolio Manager
We track 2000+ actively traded currencies across 550+ wallets, aggregate data from 20 different providers, and support trading on 130+ exchanges. This helps users make informed choices about investments and find the best prices across exchanges, with price differences as high as 0.5%. We also combine live usage data with detailed research on how each coin works, so you can see for yourself why a coin could be valuable--or not.
We know that HN tends to be divided on cryptocurrency-related topics, with some people interested and involved and others skeptical or critical. Obviously we find ourselves in the prior camp, but we also completely agree that the excessive hype and outright scams are a problem. Somebody has already created a scam token with our name on it!
As early team members at Acorns (the mobile app that invests your spare change), we helped simplify traditional investing and hope to bring that same level of transparency, clarity, and rigor to cryptocurrency.
We first got into this space in 2017. We were running a small consulting agency when three of our clients broke their contracts in the same month: one went bankrupt, one got sued by an ex-partner, and one was based in Alabama and decided that because we were in California they simply didn't have to pay us. We lost $30k that month.
That's when we learned about Ethereum and smart contracts, and a light bulb went off. Price and volatility aside, if we simply could have used a smart contract where money is automatically deposited upon project completion, we would have ensured payment.
But getting into cryptocurrency is complicated, painful, and it leaves new users particularly vulnerable. Taylor once spent $20k worth of ETH on fees, simply because of a bad interface. Add in secret keys and exchange hacks and you quickly find yourself in chaos. And yet, over half of cryptocurrency owners report that it was their very first investment, ever--and their most commonly used tracking tool is Excel.
That’s why we built Hedgehog, to give you fine-tuned control over your portfolio: our average client trades on at least 3 exchange accounts and automatically syncs balances across more than 10 different wallets. You can also group your assets into stacks like “Banking” or “Ethereum Tokens”, apply investing strategies, and even set up a rebalance calculator to help you distribute your funds based on live metrics like market cap, daily active addresses, or transaction volume.
We're already helping individuals and investment firms manage $40 million in cryptocurrency, and we are acquiring the necessary financial licenses to offer a custodial wallet that connects users directly with the best price. You will no longer need to connect your own exchanges and wallets, we’ll manage multiple currencies across multiple exchanges for you. This allows us to earn revenue by making our own markets and keeping some of the difference between prices offered by buyers and sellers.
Love it or hate it, the fact that there's over $48 trillion in annual cryptocurrency exchange volume at this point makes it unlikely to go away, and there's a ton of work to be done in wrangling it into some sort of level playing field that makes sense to people.
We'd love to hear what you think, even if it’s just “this market shouldn’t exist in the first place.” If you're active in cryptocurrency (or want to be), we'd love to have you as a user and are dying to ship features you want. Please try us out at https://hedgehog.app! Happy to answer any questions and hear your feedback in the comments!
139 comments
[ 4.7 ms ] story [ 83.6 ms ] threadTwo questions for y'all:
1. I'm wonder what your thinking is as a new, custodial crypto exchange. It's not that I don't think a custodial exchange can be successful (see: CB), but it seems like if the whole smart contract thesis is right, then decentralized exchanges are gonna eat the world (at least: your world). If you're all-in on crypto, why not build something decentralized/non-custodial? Long-term, how do you see competition against decentralized exchanges?
2. I read your security page, but what's the real deal w/ your security? 2FA and all is great, but giving a service my API keys is, uh, terrifying / something I will pretty much never do. Does anyone have a background in security / have you done an audit? Not to be a total narc, but crypto exchanges are like, big pots of beautiful honey. More details on your security page would be nice, and for many potential users (such as myself), seem quite necessary - hopefully this is helpful feedback and not just a dunk! I might also promote security stuff to the top of the page / more visible, it's at least the first thing I look for on any crypto service.
I've posted on HN about blockchain stuff before (I'm generally aligned on the "very interesting space, fuck scams" mentality) - and I can say is good luck :) Wish you all the best + looking forward to hearing your thoughts
1. We completely believe in the DEX thesis, and we plan for our custodial solution to integrate with hardware wallets so that we can immediately return your funds to your own cold storage, and take advantage of DEX aggregators that already exist like 1Inch, Totle, or Slingshot.
However, no one is aggregating the much larger (for now) pools of liquidity on centralized exchanges, and additionally, the usability story for DEXs is really tough for mainstream users. We want to address both of these problems by providing a simplified interface for interacting with smart contracts, and providing the best execution requirement that already exists in traditional finance for the world of cryptocurrency.
2. We completely understand your security concerns, and we take our duties here with utmost seriousness. Thanks for the feedback!
We just brought on a dedicated security hire who contributed to the EMV chip standard for credit cards as well as the Global Platform standard for secure enclave, and he is helping us to ensure we have processes and procedures in place using the Mitre Att&ck framework. We intend to release audit details once they are complete.
For now, we do rely on Heroku to do a lot of the heavy lifting on the secure server management, but we also have internal processes and procedures for encrypting sensitive information using AES-256 and reducing attack surface.
Hope that answers your questions, and please tell us any additional concerns!
You trust all the employees and contractors of the hosting firm who have the VM hypervisor login of the machines where your code runs.
If you have more concerns or recommendations, we'd love to hear them!
We're putting out a fix ASAP!
A smart contract doesn't allow you to do that though, so I'm not sure how much you thought this through, or if you're only writing about your initial impression and dismissing what you learned after (I do think you realize this, as most people do after a few weeks of experience with Ethereum).
Either the smart contract would have automatically transferred money after a period of time, in which case it's basically like paying in advance. Or the smart contract would have received some external information, either from the consulting company, the client, a 3rd-party or a combination thereof, to decide whether the project has been completed or not. At that point, you're back to the problem you had without Ethereum.
It's not ideal in terms of funds used, but it improves the trust situation a little bit.
This incentive already exists without Ethereum, and Ethereum doesn't improve the situation in that regard.
You are correct, for this smart contract to work you need defined rules around how the money is released should either party falsely claim success or failure, so you need to rely on automation or some third party to validate fulfillment of the contract. So you're back to an oracle problem, how do I know I can trust the validator?
The nice advancement here is that anyone can be that third party! Your smart contract can explicitly identify a third party for multisig, or you can rely on a validator pool of mechanical turks instead of a licensed escrow agent, and accordingly the cost of escrow can decrease.
The nice part is that this is customizable, and built into the very rails that move money. It's a much lower barrier to entry than trying to build something like that for ACH, and that's what excites us about cryptocurrency.
On that note, if an outstanding question is "how do we increase the supply (and thus decrease the price) of oracles beyond those who happen to know how to interact with smart contracts," I wonder if something like your Hedgehog tech, paired with standardized smart contract plugins, could make it possible for far more domain experts without crypto experience to enter and advertise themselves in the oracle market. Makes your system a one-stop easy-onboard volatility-reducing shop for the escrow problem you identified, for all participants in that marketplace!
In order to tell people how to get data from point A to point B you suddenly have to be a fiduciary financial adviser! We want to take that duty seriously and help people interact with the cryptocurrency ecosystem as a trusted adviser.
If we can help you customize and interact with smart contracts and plug them into existing regulatory frameworks, then we can unlock a lot of value for everyone.
I was in the e-signature world, and nobody tended to ever care about authentication. Nobody really wanted to pay for it, almost ever.
They smart contracts have 2 of the largest features of escrow: handing control of your money to a third party and not being able to use the money now/bad payment "terms". It mitigates some counterparty risk, as it's harder for the oracle themselves to steal the money.
It's also probably expensive, as oracles have to meditate disputes and take on risk.
So interesting, but unsure what it would be used for.
To your point, though, we are pursuing these licenses in every jurisdiction where required so we can start offering this service. We're also registering as an investment adviser so we can offer financial advice. This takes time and a lot of capital, but we believe the end result will be worth it.
We are currently seeking money transmitter licenses so that we can offer a hosted wallet of our own, where we hold the exchange accounts on the client's behalf, and act as their counterparty for every trade so they don't have to maintain accounts at multiple venues. This version of the application is not yet available.
Ethereum is one of the more credible cryptocurrencies and yet, it is slow, throughput is woefully inadequate for scale, expensive to transact, and smart contracts don't really work. When I say "Don't really work" I mean that you can't use them for the things you'd want to use them for - i.e. you can't write an Ethereum smart contract for "If I deliver X hours of contracting work, meeting these specifications, then you will pay me Y amount by Z date automatically." If I'm wrong and you can do stuff like that, please point me to the solidity.
I'm glad you included the line welcoming comments from those who feel this market shouldn't exist, otherwise I wouldn't have written this comment. I hate to be negative regarding a launch - but this feels like adding a product to the Ponzi Scheme Industry. Maybe it's like writing software to help manage slot machines, except your slot machines aren't regulated and you tell people they're investing rather than gambling.
To be clear, that doesn't mean that a simple solution will never be created. Obviously we think it will, but that doesn't mean we're right.
But to address a slightly different part of your framing, our situation actually got more complicated when attempting to go the legal route. We suddenly had additional lawyer, collections, and time costs associated with the process...and we still never managed to collect. That's certainly an area where the current legal system fails (for a lot of people!).
Cryptocurrencies might not be the perfect alternative, but they are an alternative that, in our opinion, is exciting to explore.
The fact that you justify your product with a use case which does not work and can not work is very telling. But I’m sure as a strategy it’s working very well for you.
We are not using that use case of smart contracts as justification for our product, but the excitement for the future of smart contracts and the innovations in the cryptocurrency space encouraged the founders to get involved. They started buying cryptocurrency and found a pain point in tracking and rebalancing all of their holdings using Excel which could take upwards of 30 hours a week. Making an easier solution is the justification for the start of this product
People in Brazil are using a new technology to transfer money between bank accounts faster and in an easier manner, it's a hit and growing very fast. It's not blockchain or ethereum, but a. the team involved cites those techs as their main influence, some of them having prior work/interest in those areas aswell and b. they say they have plans for implementing integration with public cryptocurrencies, smartcontracts, and several of their technologies such as smart contracts. Why, you could ask, wasn't this released to the public before, if it's not groundbreaking tech or even a tech innovation at all and provides so much benefit? "Culture".
This is why smart contract is such a bad name. A lot of people have a complete misunderstanding of what a smart contract is. They think it can enforce things like a real-world contract, but "automatically". It's just a decentralized script and without real-world input through an oracle it is of course impossible for the contract to know whether a project is completed. There's nothing smart or automatic about that part.
So part of the magic of the smart contract is illustrating intent from the beginning, and making that intent customizable! Oracles are still an unsolved problem, but we absolutely believe that reducing the barrier to entry for becoming or acting as an oracle will result in cost savings as the ecosystem matures.
Fortunately decentralized oracles are an area of focus right now, but it’ll be a slow process since most expansion will require a special integration and potentially expert oracles.
You are correct, for this smart contract to work you need defined rules around how the money is released should either party falsely claim success or failure, so you need to rely on automation or some third party to validate fulfillment of the contract. So you're back to an oracle problem, how do I know I can trust the validator?
The nice advancement here is that anyone can be that third party! Your smart contract can explicitly identify a third party for multisig, or you can rely on a validator pool of mechanical turks instead of a licensed escrow agent, and accordingly the cost of escrow can decrease.
The nice part is that this is customizable, and built into the very rails that move money. It's a much lower barrier to entry than trying to build something like that for ACH, and that's what excites us about cryptocurrency.
With DLT it seems trust and predictability is virtually the same thing. "Everybody loses everything" is predictable but not efficient. DLT is a proposal for efficiency.
We need to automatically negotiate contracts or we shift all the cost of fixing it later in courts up front. There will have to be a lot of smart defaults for the contracts to be smart, and very deep integration of tech so that the algorithms can be fed with enough data to negotiate in a very high-dimensional space. That requires infrastructure, but the DeFi culture does not seem to be interested in funding infrastructure.
We also have an on-boarding flow when you login that attempts to give you a little more hand-holding on acquiring your first cryptocurrencies if you report that you don't own any, but we're still early in building out these features.
It's a tough nut to crack, because really understanding it all requires knowledge of distributed systems, finance, cooperative game theory, and cryptography. But we're going to do our best to make it understandable for all.
What the poster is saying: your 'brand' is making a promise to help people learn, and he's pointing out that you are not doing that. Your response of "how would you like us to do that?" is not reasonable. If you are making a promise you need to have a plan on the "how"
If your client could tell you how to educate them, they wouldn't need you to do that.
I don't mean this to sound as critical as it may come across. I am not a crypto guy so it's not my place to evaluate your offering holistically. It may be valuable and impressive, I can't tell. But just pointing out that your response on this one issue doesn't inspire confidence if I were to judge you solely on this data point.
The deeper answer to the question of education is that we're specifically seeking licensing so that we can advise clients directly and execute transactions on their behalf. This way, we can get them to try cryptocurrency features and then teach them how to manage the transactions themselves.
This means that if clients want to take advantage of storage coins like Filecoin, Sia, or Storj, they can send us a file and we can do the complicated work of managing the transactions. Then once they see their file replicated across the globe, if they see the value we can walk them through executing their own transaction manually.
These are big dreams, but we have to take baby steps to get there.
We also have additional future revenue streams that we can earn through automated portfolio management fees, tax optimization, and more.
Can you clarify what you mean by motivation/support?
centralboy asked: > In other words, you route orders and users get worse prices because you MM yourself, also like traditional finance. It's a good business model for you but as a user I'd rather see transparency and a move towards DeFi where everyone is guaranteed the same execution.
And you confirmed his statement. So are you charging additional fees or not?
My fear is that I'll invest time and information into the product and then support will drop out because my goals won't be in alignment with Hedgehog's goals.
> This allows us to earn revenue by making our own markets and keeping some of the difference between prices offered by buyers and sellers.
In other words, you route orders and users get worse prices because you MM yourself, also like traditional finance. It's a good business model for you but as a user I'd rather see transparency and a move towards DeFi where everyone is guaranteed the same execution.
For us, we want to help people who don't really understand private and public keys to get out and take advantage of the new paradigms being built in cryptocurrency. And for people who do understand these things, we're happy to be a gateway to take advantage of the centralized infrastructure and put everything back in your control on your own hardware wallet.
As for being a market maker, our goal is to guarantee best execution anywhere. This requires some fancy footwork on our end, but even after we take the spread, we want to offer you a price as good or better than you can find on any other exchange, net of fees. And that includes DEXs! We will make all these prices transparent so you can see the Hedgehog price as well as whatever Uniswap, 1Inch, or Matic are offering.
No system is perfect, and one should look at the trade-offs one incurs by operating under any given set of rules. We believe that a more diverse ecosystem contributes to a stronger financial system and a more resilient society, whether centralized or decentralized.
Regardless of front-running, you still get transparency. It's one thing to be front-run and know about it, but another thing to submit your orders to a black box where a company extracts arbitrary value from them and you don't know what goes on inside.
Almost all the exchanges are copy and paste jobs provided by an exchange vendor, and they all have code to be brokers and route to external order books, all via REST and FIX but just choose not to.
We'll fix that ASAP!
For now, our advice is to use the manual management in the Hedgehog wallet named after the project, or if we don't have the endpoint in our system yet, to record it as a Paper Wallet. If we don't support the wallet, let us know and we'll add it right away!
We've added a lot of features around the GUI, including a portfolio builder tool that helps you create and manage your own index fund, as well as balance management and multi-exchange price comparisons.
Not everyone feels comfortable in an IDE, so we want to make these tools easier to use for everyone!
What? I didn't know this was currently possible. Maybe you should make this your product.
Rest assured, that the guiding light for our company is to make such smart contracts easier to use for everyone, and we believe that going the legitimate route under financial regulation is the right way to make that happen.
You are correct, for this smart contract to work you need defined rules around how the money is released should either party falsely claim success or failure, so you need to rely on automation or some third party to validate fulfillment of the contract. So you're back to an oracle problem, how do I know I can trust the validator?
The nice advancement here is that anyone can be that third party! Your smart contract can explicitly identify a third party for multisig, or you can rely on a validator pool of mechanical turks instead of a licensed escrow agent, and accordingly the cost of escrow can decrease.
The nice part is that this is customizable, and built into the very rails that move money. It's a much lower barrier to entry than trying to build something like that for ACH, and that's what excites us about cryptocurrency.
In well functioning countries that’s not even an issue at all, physical possession of the money is not very relevant. The important part is to determine who owns them.
Of course, if there is a third party that both sides trust, then you can indeed use smart contracts, but that’s exactly the situation where you don’t need them.
I’m sure someone can come up with niche use cases where so-called smart contracts have a substantial advantage, but they will not revolutionize finance.
Let's say that you have a property you want to sell, there's a buyer for your home, and there's a seller of a second property you want to exchange into. In order to lock the escrow on the property you want to buy, you first need to lock escrow with the buyer for your home, and prove the sale so that the bank will give you the mortgage for the rest of the second home.
This is a fairly complex transaction that happens all the time, and the solution is to try and wrangle as many as six parties (eg property holders, lien holders, lenders, and buyers) into communicating with each other to make this happen. It often takes months!
Now imagine that you have NFTs for each property that represents the title, the banks have a flash loan contract that validates all the prices for the NFT's using Chainlink or similar as an oracle, and there's an escrow contract that validates every leg of the contract will execute an atomic swap, or none at all. People do similar activities today, all the time in yield farming. If this was the status quo, such complicated transactions could be concluded in a day, across any jurisdiction that was willing to respect an NFT swap as a transfer of ownership.
There are definitely some gotchas here to work out, as we see all the time in cases like IRON and TITAN, but we believe that these are growing pains instead of permanent unsolvable show-stoppers. And we want to be ready for the day that such transactions are commonplace and approved by sovereign jurisdictions.
So the speculation is part and parcel to making the network something worth using! We use portfolios to describe collections of wallets because it's difficult to tell whether Ethereum or Cardano is going to be the winner-take-all shared VM in 20 years. If you want your compute cycles to hold value, you better choose the right one.
Our philosophy is to choose the One Key Performance Indicator (KPI) for each cryptocurrency, and then allocate into each currency based on the relative performance of currencies that share that KPI.
For example, as a social network investor in 2004, it maybe wasn't obvious whether you should invest in Facebook, Myspace, or Friendster. But if you got a daily active user report every 10 minutes (like you do with Bitcoin), then maybe you could have moved your funds into Facebook as the users skyrocketed.
So that's why we talk about portfolios, and see them as an important part of being a cryptocurrency user.
A bit disappointing to me, honestly. I want a digital currency that is spendable. I’m hoping the next wave of crypto innovation will address this, instead of just endlessly catering to the finance market.
If you are self custodying you can do or call it whatever you want
If you are not self custodying then you are limited to the functions provided by the custodian. If they want you to just invest and watch numbers move around, then its a portfolio
That said, how is this portfolio tracker better than the others? Also, do you support defi?
You can trade directly on any of your exchanges through the platform
You can create your own index funds and calculate the necessary trades to rebalance your portfolio based on your settings
We support automatic balance syncing using your public keys or read-only exchange api keys
All the research and pricing is packaged in the same place, so you don't have to jump between providers
We don't currently support layer 2 syncing, but we're working on implementing a solution ASAP as it's a commonly requested feature.
In the future, once we have our licenses, we will also be introducing portfolio automation so your portfolio can track your index seamlessly.
Are there any other features you would like to see?
Also, it doesn’t look like you support BlockFi? Any plans to support them? Their reporting is mostly monthly pdf statements which I have to manually keep track of in spreadsheets.
Wash rule example. Let’s say in 2021 so far you crushed meme stocks and have a capital gains profit of $100k. Not so rockstar, you bought a large chuck of bitcoin at the top at $60,000. You can sell the bitcoin for a loss (wiping away the capital gains tax from the meme stocks) and then immediately buy back into Bitcoin. Yes, you pay fees or exchange premium, but worth it.
We don't support automated BlockFi syncing yet, due to a limited API, but we're always open to intros to get them integrated. If you don't see them in our wallet list, let us know and we'll add them to the index.
Regarding your wash rule example, we can take it a step further, eventually! Let's say you bought 1 BTC each at $12k in 2018, 6k in 2019, and $20k in 2021 and you wanted to sell 1 BTC at the top for $60k. We could help you specifically identify the BTC you bought at $12k so you could pay capital gains on a $48k gain instead of income tax on a $40k gain. This is uniquely possible because we have the full view of all your exchange venues.
*edit: This is definitely not intentional, and sounds like a bug.
- How did you come up with the name? Any interesting stories there? Isaiah Berlin reference, possibly?
- On an iPhone 7, the sections at the bottom are cut off. The graph and the image links below it trail off the page.
- thanks for the bug report on the iPhone 7! we'll check it out and get if fixed
We're pushing a fix ASAP!
Is that styling something that needs to applied to the entire page wrapper as a whole?
One thing I’m curious about: Will you be looking adding functionality that allows tracking of tokens that are staked using various DeFi services?
All the other portfolio trackers loose track of your coins the minute you add them to a pool. With so many DeFi services around, it’s easy to loose track of where one put ones tokens.
Question: Are you also thinking about adding tax related insights when you pull portfolio?
In terms of taxes: Absolutely! We've actually been really excited about that side of things for a while, specifically in relation to specific identification tax analysis. What that basically means is that if you bought Bitcoin: (a) in 2017 at $20k (b) in March at $60k (c) and then a few weeks ago at $35k
If you were to sell BTC today at $38k, you should be able to say "Hey! I want to sell the BTC I bought in lot (b), but not the ones from (a) or (c)" since that's technically sell at a loss. The trick to this is that you have to make that designation within 10 days of selling, so the tax feature has to actually be integrated into the trading platform itself.
There are a bunch of things we need to do before we can effectively launch that feature, but it gets me excited every time someone asks.
Congrats on the launch! Out of curiosity, what are the most popular wallets that your users are syncing with Hedgehog?
Most popular connected exchange (synced using apikeys):
- Coinbase / Coinbase Pro, Binance.US / Binance, KuCoin, Gemini, Kraken, BitMart, Gate.io
Most popular non-exchanges (which are synced using public addresses):
- Brave Browser, Ledger Nano S, Uniswap, Exodus, Coinbase Wallet, Trust Wallet, Trezor One, Jaxx
We have a little over 550 wallets on Hedgehog, but if you see a wallet missing from the site, let us know. Takes us about 10 minutes to add a new one into the system
*edit: formatting
I had no rhyme or reason for determining that cutoff point.
Zapper.fi is okay but only considers the most popular contracts where all the yield is already gone
Thats a market need for me, good luck guys
Keep an eye out for updates!
There is no specific one.
But for example I was yield farming on Quickswap 4 months ago and nobody had even implemented the Polygon blockchain for tracking any interaction. Coinstats only did it like two weeks ago. Its bad.
I also don't reuse addresses most of the time, so other services have problems with tracking multiple addresses.
And finally I wish any service had an offline executable, because to me it defeats the purpose to give an online service all of my addresses under a single userid to watch even if they do track multiple addresses.
1. Can I plug in my trading bots somehow on your app ?
2. How do you guys make money basicly ? Is there a monthly subscritpion or fees over exchange fees ?
Also, we do not charge any fees for helping you trade on your own exchanges. Once we have the appropriate licenses, we will offer custodial accounts with us where we make money by keeping a piece of the "bid-ask spread", ie when we connect you to the best price anywhere, we can find a price so good that we can keep a small percentage of the sale and still give you a better price than you'd find on your own.