Founding Stories: Anchorage

Foundational Background:

• Co-founders Nathan and Diogo joined Square in March 2011, where they built the first encrypted credit card reader and led the security team for a company of ~45 employees.
• Square established a culture requiring all security engineers to be proficient software engineers who build the platforms used by other developers, rather than acting as an isolated oversight team.
• The team adopted a "get to yes" policy to align incentives, ensuring security protocols had higher availability targets (six nines) than the services they supported to gain engineering respect.
• Both founders subsequently worked at Docker, where they scaled the security function to support microservices and embedded security culture across the organization.

Anchorage Genesis and Market Gap:

• Anchorage was founded following the 2017 crypto price surge, driven by institutional demand for private key generation and custody solutions that standard "cold storage" could not meet.
• Founders identified that cold storage (e.g., USB keys, QR codes) was operationally incompatible with the volatility of crypto assets and the new requirements of Proof-of-Stake governance.
• Traditional "pirate custody" models are deemed insufficient for institutions because they prevent participation in on-chain governance, staking, and earning yields.
• Institutional investors require regulated custodians that offer proxy voting, dividend collection (or staking rewards), and asset utilization features to meet fiduciary obligations.

Evolving Custody Model:

• Anchorage aims to create a "crash-resistant" security architecture, similar to the safety features of Indy 500 race cars, allowing for high-speed operations without compromising safety during failures.
• The firm advocates for a "security for everyone" culture where every employee, not just engineers, is responsible for security protocols to eliminate single points of failure.
• Custody services are being expanded beyond simple asset storage to include active network participation, such as staking and voting on protocols like MakerDAO and Tezos.
• A primary operational goal is making complex on-chain governance accessible to institutional investors through user-friendly, secure interfaces that eliminate the fear of asset loss during voting.

Libra Association Involvement:

• Anchorage has been a founding member of the Libra Association for approximately 1.5 years, preceding the public announcement of the project.
• The initiative is structured as an independent association headquartered in Geneva, funded by members rather than Facebook, to ensure decentralized governance.
• Anchorage's role as a founding member includes running one of the 100 nodes on the Proof-of-Stake Byzantine Fault Tolerant blockchain and participating in one-of-equal voting rights on association decisions.
• Libra is designed to solve the volatility of existing crypto assets by backing the currency with a reserve of low-volatility government bonds and major fiat currencies (USD, GBP, EUR).

Strategic Implications of Libra:

• The project targets a global scalability of thousands of transactions per second to support mass adoption as a medium of exchange rather than just a store of value.
• Libra leverages existing user bases of member companies (e.g., Uber, Lyft, Stripe) to solve the "chicken and egg" problem of simultaneously bootstrapping merchant and consumer adoption.
• The blockchain design prioritizes open-source code and third-party developer permissionlessness, allowing the system to function without trusting the founding entities.
• Founders view Libra as a "raising tide" that legitimizes the broader crypto ecosystem, normalizes regulatory compliance, and drives mainstream usability through consumer-grade product experiences similar to those at Square.