Original title: "7 O'Clock Capital: Understanding the New 100 Billion Platform Track-Web3.0 Encrypted Wallet in One Article"
Original Author: J
introduction
introduction
If the popularity and development of the Internet has created mobile payments, then the arrival of Web3 has written a new chapter in encrypted payments and pushed the development of encrypted wallets to a new climax.
The functions of traditional electronic wallets are to store assets and make mobile payments. On the basis of storing assets and mobile payment, the encrypted wallet adds the function of identity identification. This is also the entrance and authentication for users to pass through various DApps in Web3.
In the traditional Internet, a person's identity symbol is often formed through his reputation and behavior in the real world. In Web3, the identity symbol is displayed through the assets in the encrypted wallet, transaction behavior, collected NFT, etc.
1. The development and evolution of encrypted wallets
(1) The development cycle of encrypted wallets
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Figure: Stages of Wallet Development
1. From 2009 to 2012, with the birth of Bitcoin and blockchain, the wallet began to enter the initial development period.
2. From 2012 to 2020, the hacker era + the start of Ethereum led to a surge in smart contract wallets, a substantial increase in transaction activities, DeFi liquidity mining became popular, and the number of encrypted wallet users exceeded 50 million, and encrypted wallets entered a period of rapid expansion.
3. From 2021 to the present, with the explosion of NFT, DAO, public chains and Web3.0 applications, encrypted wallets have become a popular choice for people to store assets and trade, and supporting cross-chain assets has also become one of the key considerations for users to choose wallets. At this time, encrypted wallets focus more on interactive functions and user experience.
(2) Classification of encrypted wallets
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Figure: Classification of encrypted wallets
2. Current status of encrypted wallet market
(1) User scale
The user base grows, and the market share rises simultaneously.
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(Data source: https://www.statista.com)
(2) Business model
From To B mode to To B+To C mode gradually.
The business model of encrypted wallets is constantly evolving along with its development. When encrypted wallets are used as a tool for storing users' private keys, they focus on accumulating users and developing their fund deposit functions. Their profitability is limited and they cannot generate good income.
In order to generate income and profit, the encrypted wallet breaks the traditional business model and introduces value-added services (financial management products, PoS mining, transactions, asset aggregation, market information, etc.) and traffic monetization methods such as advertising to increase revenue.
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Figure: Profit model of encrypted wallet
(3) Primary market
As a Web3 infrastructure, encrypted wallets are favored by investment institutions.
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Figure: Funding amount of the global crypto wallet industry since 2018
3. Encryption Wallet Segmentation Track
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Figure: List of wallet products
(1) Mobile Wallet
1、BitKeep
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Features:
Features:
Provide accurate DEX market K-line function;
Support cross-chain exchange of 18 public chains;
Provide the function of "Borrowing Gas Fee Transaction", which can be easily traded without the main chain currency as Gas;
Built-in NFT trading market, supports NFT project INO and NFT casting;
Support more than 70 main chains, tens of thousands of DAPPs and hundreds of thousands of encrypted assets;
Support OTC transactions;
Launched BitKeep Business, a Web3 ecological open platform for B-side.
BitKeep wallet is one of the well-known digital asset wallets in the industry. It integrates brand, technology, functional experience, user reputation, education and service. It adopts various security mechanisms such as hot and cold separation and offline signature to ensure the security of funds. BitKeep has long been striving for excellence All-round polished products will become the safest and most powerful entrance to Web3.
2、Rainbow
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Features:
Features:
Rainbow is more interesting than other wallets, with rainbow gradient buttons and rich emojis, which is richer than MetaMask as a whole;
Allow users to purchase crypto assets with bank cards;
Dapps interaction;
Support for purchasing and viewing NFT collectibles;
Support for Layer2 networks (Polygon, Optimism and Arbitrum);
Social function, link social media such as Facebook and Ins to display the NFT works in the wallet;
The DefiPulse index function is provided to view high-quality DeFi assets in the wallet;
Asset sending/receiving can be done directly through ENS username.
3、ZenGo
Features:
Features:
The platform supports 40+ encrypted Tokens;
Intuitive and user-friendly operation interface, biometric identification;
There is no charge for sending, receiving or storing encrypted Tokens on the platform;
High security, using ClearSign firewall and MPC encryption technology;
7X24 hours customer service support;
Summarize:
Summarize:With the increase in user demand and the maturity of product development, mobile encrypted wallets will become the traffic and distribution platform for Web3 applications, which will eventually promote the paradigm shift of the entire Web3 track from "wealth creation effect" to "daily application".
(2) Public chain ecological wallet
1. EVM ecology: Metamask
Metamask belongs to one of the six major products of ConsenSys, an Ethereum technology development company, and was once supported by the Ethereum Foundation. On March 15th, ConsenSys announced the completion of a US$450 million Series D financing at a valuation of US$7 billion, led by ParaFi Capital, and other investors included Temasek and SoftBank Vision Fund 2.
Features:
MetaMask monthly active users exceed 30 million;
Global user base, among which the United States, the Philippines, and Brazil have high participation;
The lightweight Ethereum open source wallet is also an APP wallet;
It also has the function of testing Ethereum smart contracts and supports the most complete Dapp;
Compatible with hardware wallets Ledger and Trezor;
The operation interface is simple, very suitable for beginners to use;
User-defined wallet experience, such as adding new APIs to MetaMask;
Gas rates are high. The only criticism is the overly simple UI design and pages.
2. Solana Ecology: Phantom
Phantom received US$9 million in Series A financing in the summer of 2021, led by a16z, with participation from Variant Fund, Jump Capital, and Solana Foundation. Phantom is a hot wallet dedicated to the Solana chain.
Features:
It is safe and easy to store, buy, send, receive, exchange Token and collect NFTS on the Solana blockchain;
Currently, Google, Edge, Firefox, and Brave are supported on web browsers, and IOS systems are supported on mobile phones;
Special services for directly viewing NFT and pledge;
SOL can be directly pledged in the wallet to earn income;
User creates and manages private keys;
Connect hardware wallet;
Link to other apps (such as Serum or other Farming Apps)
However, there have been security breaches in SOL. In August, there was a large-scale theft of Solana wallet, with a loss of more than 580 million US dollars.
3. Cosmos ecology: keplr
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Picture: Keplr product display picture
Features:
Keplr enables users to explore interoperable blockchain applications inside and outside the Cosmos ecosystem;
Keplr wallet already supports various native integration protocols, including more than 10 protocols such as CosmosHub, Kava, Secret Network, Akash, and Sifchain;
The wallet is compatible with all Dapps in the current Cosmos ecosystem;
Different from other wallets such as Metamask, Keplr needs to generate a new set of mnemonic words every time a new wallet is created.
Cosmos is one of the hot tracks in 2022. There are currently more than 200 projects in the ecology. You can participate in the following interactions through your wallet:
Pledge $ATOM to the verification node to participate in the airdrop
Participate in ecological projects of Cosmos SDK chain nodes pledge new chain
Add LP in Osmosis (provide liquidity)
4. Layer 2 ecology: Argent
With the vigorous development of Layer2, Layer2's wallet is also a necessary facility for development. Argent is a Layer2 wallet active on the ETH chain. Its advantage is that it can easily transfer Layer2 assets to Layer1, with low cost and high speed. In April 2022, Argent completed a US$40 million Series B financing, led by Fabric Ventures and Metaplanet, with participation from Paradigm, Jump and Animoca.
Features:Argent is a user-friendly encrypted wallet with over 500,000 users. The official disclosure will launch decentralized products such as lending and pledge in the future, and plans to open up new fields such as virtual real estate, games, DAO and NFT.
Starting from the most important security of encrypted wallets, Argent cancels the concept of private key/mnemonic phrase, and uses functions such as social recovery to ensure users' ownership of wallets and lower the threshold for use. It has obvious market competitiveness in this regard. However, compared to other wallets, Argent wallet users cannot freely switch most commonly used EVM networks, which will limit its use scenarios to a certain extent and make it difficult to build user stickiness.
5. Aptos Ecosystem: Martian Wallet
Currently Martian DAO is building various products for the Aptos ecosystem, including Martian Wallet, Curiosity NFT marketplace, trading platform, etc.
Martian Wallet is an encrypted wallet built by the team using its Aptos web3.js module version. It can be used to manage digital assets and access decentralized applications on the Aptos blockchain. It also supports minting NFT on the Aptos development network. It is currently available on Chrome The plug-in wallet will launch an iOS version later.
The Aptos public chain is a brand new public chain, so new ecological projects are worth interacting with and ambush for airdrops. The process is also very simple. After installing the Google browser plug-in wallet, click Airdrop to receive the test coins and enter the official website. (https://martianwallet.xyz) Perform NFT casting to complete the interaction.
6. Sui ecology: Sui wallet
Sui builds on important innovations in consensus algorithms and uses novel data structures to produce a high-performance layer 1. The development team Mysten Labs is a company that builds infrastructure for Web3, and the team members come from Facebook.
Sui has received US$300 million in Series B financing, led by FTX, with participation from a16z crypto, Jump Crypto, Apollo, Binance Labs, Franklin Templeton, and Coinbase Ventures.
Summarize:
Summarize:Multi-chain deployment has become an established trend, and more and more public chains choose to be directly compatible with the Ethereum Virtual Machine (EVM) and directly borrow Ethereum wallets. For public chains that are not compatible with EVM, developing wallets and other infrastructure is a strategic requirement for perfect ecological development. However, the lack of interoperability between different public chains is also a bottleneck that restricts the overall development of the industry. Wallets compete fiercely in a multi-chain parallel structure. In the future, it is very likely that a wallet that includes all public chain ecologies will be derived and become a phenomenon-level product in the DeFi field.
(3) Trading platform wallet
Trading platforms are also launching their own encrypted wallets, represented by Coinbase Wallet, OKX Wallet and 1inch Wallet.
Coinbase Wallet is also known as the most suitable wallet for crypto beginners. It currently has web plugins and mobile terminals. Scan the QR code on the plug-in wallet in the mobile application to connect and access DApps and DeFi applications on the desktop with one click. However, the Coinbase plug-in wallet page is too simple, and relevant transaction records can only be viewed on the App side. In addition, users must confirm all transactions in the plug-in in the mobile application, while supporting the storage of NFT. As of now, Coinbase Wallet supports Ethereum, Polygon, and Optimism.
OKX Wallet is the official wallet of Ouyi Exchange. It is developed and used according to the needs of users' Web3. It is backed by Ouyi Exchange, one of the world's largest digital asset trading platforms. Currently, Ouyi has more than 20 million users worldwide. OKX Wallet As a secure and fully functional web3 wallet, it will allow exchange users to quickly enter the web3 world. The features of the OKX wallet are as follows:
Multi-chain and multi-asset, supporting 25+ public chains and 1000+ DeFi protocols
Provide NFT purchase, transaction and creation functions
web3 user portal, involved in various types of DApps (DeFi and GameFi and selected DAOs)
The API is open-source and developer-friendly, and Web3 developers can easily connect their dApps with the OKX wallet.
The user experience is good, integrating the needs of beginners and professional users, and providing complete process guidance for novices.
1inch Wallet is a built-in DEX aggregator that supports Ethereum, BNB, Polygon, Optimistic Ethereum, Arbitrum, Gnosis, Avalanche and Fantom public chains and hundreds of Token transactions and transfers on the public chains. 1inch provides users with deep liquidity and better flash rates. Not long ago, it was announced that 300,000 OP airdrops will be issued to 1inch wallet users on the Optimism network to reward users who use Optimism to interact through the 1inch wallet.
(4) Asset custody wallet
Safeheron is a preferred asset custody wallet, featuring high asset security. At present, it has completed the Pre-A round of financing of US$7 million, jointly led by Yunqi Partners and Web3Vision, PrimeBlock Ventures, Cobo Ventures, M77 Ventures, 7 O'CLOCK CAPITAL and former Sequoia Capital China co-founder Zhang Fan participated in the investment.
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Figure: Safeheron API signature mechanism
The main features of the wallet include:
Replace single-point private key with distributed private key sharding;
Self-designed MPC cutting-edge cryptography and multi-layer security technology combined with hardware isolation;
The wallet is open source and verifiable;
The transaction is as low as free, and there is no transfer service fee;
It supports multi-chain and multi-currency and also supports NFT assets.
Digital asset custody has undergone many evolutions, from only hot wallets to the current mixture of hot wallets, cold wallets, multi-signatures, etc. MPC technology + TEE technology makes Safeheron stand out in the asset security custody market. Currently Safeheron has officially reached a strategy with MetaMask Cooperation, join hands to enter the field of enterprise-level MPC multi-signature security, and firmly occupy the high ground in the market.
(5) Hardware wallet
Cold storage is the storage method of choice for all, not only for long-term token holders and Bitcoin supporters, but also for institutional custody services. Provides physical security to users by disconnecting encrypted USB devices from the Internet, eliminating the need for third parties to control funds.
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Figure: Comparison chart of three mainstream hardware wallets
In addition to the above three hardware wallets, OneKey wallet has to be mentioned in particular. It is the only hardware wallet invested by Coinbase. At the same time, it has also developed a mobile APP wallet with obvious features and smooth use. OneKey Wallet recently announced a US$20 million Series A financing led by Dragonfly and Ribbit Capital, with participation from Framework Ventures, Sky9 Capital, Folius Ventures, Ethereal Ventures, Coinbase, Santiagoroel, and Fishkiller.
OneKey hardware wallet has the largest sales growth rate in Asia, with a rich product line, including OneKey Swap, OneKey Desktop computer desktop, OneKey plug-in, OneKey app. The hardware wallet supports all EVM chains including ETH, Polygon, BSC, OKT, etc., as well as BTC, Solana, Near, Trx and other networks. Currently, multi-chain support and function optimization are being added at a weekly update rate. Compatible with OneKey plug-in and MetaMask to connect hardware wallets to participate in DeFi, it is a necessary hardware wallet for users to participate in DeFi.
Features:
Full platform support for desktop, browser plug-ins, and mobile apps
Support multiple chains, multiple sets of mnemonic words, and multiple software and hardware wallets to be used at the same time
support passphrase
Built-in multiple nodes and default chain free switching
Summarize:
Summarize:On the one hand, the wallet is an essential tool for users to interact on the chain, which can be regarded as an important entrance from the real world to the encrypted world; on the other hand, the essence of the wallet is a private key management tool with strong asset attributes. In the future, the development of encrypted wallets will also be continuously enriched and expanded around these two features, and business optimization and resource aggregation will be carried out in a comprehensive and comprehensive direction.
(6) Multi-chain wallet
Coinhub is a multi-chain decentralized wallet product serving the DeFi ecosystem. It is now available in browser plug-in version and mobile phone version, supporting Bitcoin, ETH, BSC, Solana, Polygon, Avalanche, Tron, Arbitrum, Optimism, etc. 40 + Public chain, cooperation with 2000+ DApps, users are distributed in 50+ countries and regions around the world, global self-media traffic covers 150w+, and the global ecological community covers 200w+ users.
Coinhub fully displays user assets through contract analysis, intelligently recommends high-quality applications through data analysis, and realizes convenient financial management, one-click mining and optimal transactions through aggregation of DeFi tools. Let users fully understand the current data and conveniently operate and manage assets in the new DeFi ecosystem, reduce user risks, and realize asset appreciation.
(7) Identity Wallet
The emergence of the concept of Web3 and metaverse has a deeper positioning of the properties of encrypted wallets. The wallet will serve as the identity of the user, not only representing digital assets but also digital identities, endowing wallets with social attributes.
Formatic wallet (now renamed Magic)
At present, $27 million in financing has been completed, led by Northzone, and participating investors include Tiger Global, Volt Capital, Digital Currency Group, CoinFund, and Reddit co-founder Alexis Ohanian.
Features:The user can register the wallet by entering the email address, no mnemonic is generated, and the user's identity is protected by a SOC 2-compliant hardware security module (HSM)-based entrusted key management system. From a developer's point of view, the integration of Fortmatic Wallet is extremely simple, and it is a developer-friendly wallet. For any existing web 3 application, Fortmatic can be integrated by just copying a few lines of code. But currently it is mainly compatible with EVM network.
(8) Web3 Wallet
Web3 wallet Steakwallet, now rebranded Omni, raised $11 million in seed funding in September at a $50 million valuation. Investors include Spartan Group, GSR Ventures and Eden Block, among others.
Omni says it has built its own custom smart contract middleware that allows users to stake on more than 20 protocols with built-in liquid staking options. Users can also move assets to different blockchains through the cross-chain bridge and display NFTs from different chains on the mobile app. Currently available on all major Ethereum Virtual Machines and Layer 2 scaling solutions such as Arbitrum, Optimism, and Polygon, the company is currently preparing integrations with zkSync and Starknet.
4. Future Prospects of Encrypted Encrypted Wallets
As one of the necessary tools for crypto market participants, wallet occupies a very important position in the infrastructure field. At present, there are also many entrepreneurs pouring into the wallet track. We believe that in Web3, the importance of the wallet entrance will surpass the trading platform and become one of the Web3 traffic gathering places and the infrastructure of the Metaverse. Its value will be realized in the following aspects reflect:
(1) DID identity certificate
V God pointed out in the long article "Centralized Society: Searching for the Soul of Web3": Web3 currently has considerable limitations in the application layer, and this limitation stems from the current lack of native Web3 that represents "human identity and social relationships". components. The wallet is a perfect Web3 component. All information such as identity, driver's license, medical records, and address are displayed through smart contracts to generate a unique DID system. The wallet finally realizes off-chain identity authentication, on-chain identity aggregation, and on-chain credit scoring. On-chain behavior authenticates these functions.
(2) Web3 Gateway
At present, the four layers of the Web3 stack are protocol, infrastructure, use case layer, and access layer. Due to the complexity and structural problems of each layer, they cannot be well integrated. The wallet is at the top of the stack and will completely bring the Web3 stack to life as the entry point for various Web3 activities. For example, the wallet will replace the existing login or registration system. Instead of using Facebook or Google credentials to create new accounts on all websites, all wallets will be used to approve logins and become the main entry point for most Web3 applications.
(3) Public chain connector
The development of Web3 applications is carried out on the basis of smart contract platforms such as Ethereum, Solana, Avalanche, Cosmos and other public chains. Whether it is layer0, layer1 or layer2, a wallet will be developed to adapt to the development of its own chain ecology , One is to prosper the ecology, and the other is to compete for traffic. However, the pattern of multi-chain competition divides the liquidity and composability of DeFi products. Digital assets cannot circulate freely in all public chains. As a connector, the wallet will build a bridge between all public chains.
(4) Become "Alipay" in Web3
While supporting payment and transfer, all Dapps are integrated into the wallet, and project developers and users can gather in large numbers to form a new generation of Internet ecosystem based on blockchain technology. In this ecosystem, all online operations of users can be carried out through the wallet, including social networking, short video browsing, shopping, ordering food, taxis, and travel.
(5) Metaverse hardware equipment
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At the same time, the future development of the wallet is also facing challenges:
1. Regulatory compliance issues. The service provider of Web3 applications will be digital people projected by real people off the chain. However, from the perspective of Web3's global regulatory compliance and popularization, the verification of real people may be unavoidable. In the future, the possibility of coexistence of the two cannot be ruled out. Accounts authenticated by real people will enjoy more rights in the Web3 world, but purely digital people will still be accepted.
2. Another derived question is about privacy protection. Using wallets for various authentications and off-chain information binding, how to protect the user's identity information is a problem to be faced in the technical implementation.
The narrative of Web3 is constantly being disintegrated and reshaped, attracting more new developers and users. However, compared with the 4 billion Internet users in the world, the current Web3 user volume is far from comparable. The data shows that as of the first quarter of 2022, the number of monthly active users of Facebook is 2.936 billion, while the number of monthly active users of Metamsk wallet is only 30 million, which means that the proportion of digital asset wallet users is still very small, and the future market potential is huge.
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