Turnkey: Building the Open Infrastructure Layer for Crypto
Turnkey is a crypto infrastructure company founded in 2022 by former Coinbase Custody developers Bryce Ferguson and Jack Kearney. It positions itself as a non-custodial key management protocol. Its core mission is to solve the complexity of blockchain interactions through a modular tech stack, providing developers with secure and flexible on-chain interaction solutions. In June 2025, the company completed a $30 million Series B funding round led by Bain Capital Crypto, with participation from Sequoia Capital, Galaxy Ventures, and others, bringing total funding to $50 million. The funds will focus on payment modules, AI agent wallets, and DeFi component development, pushing crypto infrastructure toward an “open protocol layer.”
This market insight article discusses Turnkey’s non-custodial key management architecture and technical breakthroughs, exploring how its embedded wallet solution lowers the Web3 usage barrier and the regulatory challenges it faces.
Technical Architecture: TEE Enclave and Chain Abstraction Experience
Turnkey’s core competitive edge lies in two innovative modules:
Trusted Execution Environment (TEE) Security Model
Private key generation and storage are isolated in hardware enclaves (e.g., Intel SGX), providing physical-level protection through five components: a policy engine for dynamic permission auditing, a signer for transaction execution, and a TLS extractor for communication encryption verification. This design compresses wallet creation latency to 50-100 milliseconds, supports millions of transactions per second, and meets financial-grade security standards with SOC 2 Type II certification (December 2024).
Chain-Abstraction Account System
Significantly enhances user experience: users can create embedded wallets via social login (email/biometrics) without mnemonic management; any token can be used to pay gas fees, automatically converted by the system; cross-chain operations are simplified into one-step instructions (e.g., ETH to SOL exchange), eliminating manual bridging. This system is compatible with major chains like Ethereum and Solana, with plans to expand to the Aptos ecosystem in Q3 2025.
Industry Positioning: Solving the Wallet “Trilemma”
Traditional wallets face a dilemma: MPC solutions suffer 5-10s latency, while custodial ones violate decentralization. Turnkey reshapes the competitive landscape through three breakthroughs:
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Experience Innovation: Provides embedded wallet SDKs to clients like Magic Eden, boosting user conversion rates by 40%, mainly due to fiat on-ramps and biometric onboarding.
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Cost Efficiency: Aggregates bridging and native DEX liquidity, reducing large transaction costs (> $100K) by 40% compared to 1inch.
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Compliance Readiness: Integrates KYC tools, passes EU MiCA pre-audit, and supports enterprise-level risk strategies.
Leading client use cases validate its commercialization ability: Alchemy built its WaaS service on Turnkey’s API, processing millions of transactions daily; prediction platform Polymarket uses abstracted accounts to simplify betting; DeFi terminal Azura leverages Turnkey for institutional non-custodial trading.
Recent Developments: Series B Financing & Ecosystem Expansion
Turnkey’s June 2025 Series B round has three strategic implications:
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Technical Validation: Investors’ security teams helped fix cross-chain async trading bugs, reducing Solana-to-EVM arbitrage risks.
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Team Expansion: Engineering team grows from 35 to 60, accelerating AI agent wallet development.
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Ecosystem Synergy: Partnering with Spectral to develop key management systems for autonomous trading AIs, advancing decentralized AI agent adoption.
Meanwhile, competitor Privy announced $40 million in total funding, signaling an intensified race in the embedded wallet sector. According to Market Research Future, the blockchain infrastructure market will reach $221.4 billion by 2034, with a 26.1% CAGR, making the protocol layer a new capital focus.
Risk and Challenges: Security Dependence and Regulatory Game
Technical Bottlenecks
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TEE Supply Chain Risk: Past Intel SGX vulnerabilities may threaten enclave safety (e.g., $320M Wormhole hack in 2022).
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Cross-Chain Compatibility: Block time differences between Solana (400ms) and Ethereum (12s) cause async transaction issues, requiring relay optimization.
Regulatory Grey Zones
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AI Agent Compliance: U.S. SEC may classify autonomous AI trading as “unregistered brokerage,” referencing Coinbase lawsuits.
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Cross-Border Licensing: Fiat on-ramps need MSB licenses and EU MiCA electronic money compliance.
Commercial Sustainability
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Revenue Model Pressure: Tiered API pricing remains undisclosed; if major clients (e.g., Alchemy) move to self-built solutions, revenue could be hit.
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Ecosystem Dependence: 30% of transactions rely on gas subsidies; daily volume below $50M may disrupt services.
Live regulatory updates can be found in JuCoin Research Institute’s policy section.
Future Evolution: From Key Management to AI Agent Core
Turnkey’s roadmap targets three key directions:
Payment Modularization (Q3 2025)
Launching stablecoin settlement networks for enterprise B2B payments;
Opening a prebuilt script marketplace (e.g., DCA tools) where developers trade on-chain automation strategies.
AI Agent Expansion (Q4 2025)
Providing dynamic key management frameworks for projects like Spectral, allowing AIs to securely execute cross-chain swaps;
Developing an intent execution engine to convert natural language commands into complex transactions.
Standards Competition
If abstracted accounts prove successful, they may influence Ethereum’s native account abstraction (e.g., EIP-7702) to adopt similar architecture, replacing ERC-4337’s high-gas model. Key success metrics include: >50% AI agent customer adoption (currently 20%), and Solana chain latency <2s (currently 5s).
In the long term, Turnkey could become the “AWS of crypto”—lowering dApp development thresholds via standardized interfaces. However, it must resolve TEE hardware cost and cross-device trust issues to achieve its billion-user vision.
Neason Oliver
