Congratulations to everyone. There are many lights here. Congratulations, Pedro. And so, let's begin. Glad I really like chat payments, giant e-commerce, everything related to wallets.
And let's begin. Pedro, would you like to quickly introduce yourself quickly introduce yourself ? Greetings. I think this is probably our second fireside chat together. So, it's really good to be reunited.
Uh, my name is Pedro. I am the founder of WalletConnect. We created the WalletConnect network, which is the largest interoperability network among all digital wallets. And now we've launched WalletConnect Pay for merchants so they can accept cryptocurrency in their stores. Yes.
Francesco, I lead the developer relations department at ConsenSys. And yes, yesterday we launched a giant e-wallet e-wallet . Joe actually talked a little bit about it in our previous conversation. And previous conversation. And , uh, I'm excited about everything, like Wallet Evolution, and, uh, we have different products for both, different products for both, let's say, agents and developers and designers.
Uh, I think we'll touch a little bit on what's going on here and in this space. But let's start with something basic, shall we? So, the WalletConnect payment infrastructure. You guys have been developing quite well in a very interesting direction over the last 6 months. You want to give an idea of what is happening and how things are developing at this time.
I mean, we're seeing big changes in how people create wallets. And not just wallet developers in terms of how they build wallets, but also how wallet users interact with wallets. There was a world where there were a thousand programs every day, and another thousand programs appeared the next month. And essentially, WalletConnect came about as a necessity because to explore Ethereum, a wallet user had to interact with multiple applications over the internet, and connectivity was a very big problem that needed to be solved. But now, as there's some consolidation happening, I like to call it wallet actions, things that you can do with the wallet, wallets like MetaMask are consolidating these features into the wallet itself.
Now the question is , what will the user interact with when connecting to the outside world using their wallet? The most important problem we saw was with payments. So how can I use any wallet with any merchant, whether online or in- store, that may interface with a completely different system, whether it's a payment provider in Nigeria, Argentina, or Hong Kong, and I can use my favorite wallet. And that's exactly what our famous QR code successfully did for DeFi, and is now doing for payments. This is quite impressive.
We discussed a little bit earlier how many different types of payments there are, right? What are the main types of these payments you see? Of course, I'm a little biased towards money transfers or peer-to-peer payments. There may also be micropayments specifically designed to pay for small services. I think the giant e-commerce with XPRL2 is also definitely with XPRL2 is also definitely gaining momentum.
But what are these categories, if you need to highlight these payment categories, what would be the top three ? It's funny because if you look at the history of Wallet Connect, we went from being a very general purpose network that did everything. It was like a Swiss Army knife for wallets, and now we focus exclusively on payments, but at the same time payments are but at the same time payments are such a big world. For example, there are payments between two parties, whether it's me just sending Francesco money, but there's a big difference between two parties in the same country and two parties abroad, and that's classified as a money transfer, not a peer-to-peer payment. Then there are payments between consumers and businesses, and vice versa between businesses and consumers, and then obviously there is a difference between whether you are making a payment between two businesses.
So, there's a big category in the payments world , and from what we've seen in the past, for example, crypto payments have had a few attempts to do that. For the most part, they actually integrated businesses onto a completely new platform, which businesses were not very happy with. So very happy with. So , we tried a completely different approach, helping existing payment service providers accept cryptocurrency without involving merchants on a completely new platform. Yeah, I think we definitely want to hear all of this a little bit more about the lesson that we learned, for example, about this web- about this web- two experience in our, for example, how the web-three company is also moving into the merchant-based and relationship-based payments world, and what the main lessons that we learned.
But I think just touching a little bit on what you said at the beginning, for example, focusing on payments is definitely a big priority for us as well priority for us as well . I think that, let's say, the UX experience also changes with each cycle. I think it's definitely different. We are seeing a strong evolution in meeting users where they are. So there are a lot of ways that people don't interact, like additional features, additional platforms.
And when we started integrating the criminal prediction market directly into extensions and mobile devices, we started to see that the behavior was very strong. People really wanted to have everything the same, some super- some super- super-app, uh, specific experience. And also in line with that, they were willing to pay a premium to have a reduced risk situation, because every time you actually interact with an additional, uh, level, you also expose yourself to an additional security threat. So I think the type of users entering this market is definitely changing, right? And consumer behavior is changing, but I think UX is also improving.
But the question is also for you the question is also for you : do you think UX is improving? Has he improved enough? What things would you like to see more accepted? You know, I remember last year we were on a fireside chat on a fireside chat where we were talking about account abstraction, right? And about how we can abstract this path more.
And I think that obviously a lot has changed in pay. Yes, and account abstraction also plays a big role, uh, but it's very specific, right? Because, as you said, meet users where they are. Um, there are different types of users. For example, there will be existing applications, say, Amazon, which will simply embed a wallet on the Amazon website.
So you won't even see that you actually have a wallet. It will simply be part of the website. But there will also be a scenario where Revolut actually embeds the wallet into the banking interface as well. So you don't even know there's a real wallet, but it's more like a financial experience. So it's less like a built-in wallet and more like a wallet- as-a-service hidden behind a bank.
And then there will be a specialized banking interface, more like what MetaMask creates, right? With MetaMask card and MetaMask USD. So it will be more like a cryptocurrency experience, but trying to simplify it like a super app, right? And WalletConnect always wants to make sure it takes all of that into account, right? So he tries to be as broad as possible.
And we want to consolidate and unify all these experiences. So, our main goal is always to overcome fragmentation and unify. The QR code standard that we created has been quite successful, and we are working very hard on it. Yes, I definitely see, for example, MUSD, the Metal Mask stablecoin, right? And the Metal Mask card right?
And the Metal Mask card , right? For example, how important is distribution. And how important these trade relations are too. But in the same sense, I also see that people obviously adapt to certain experiences. And I would like to understand a little bit, you know, we were discussing, I think, what was changing for the first time in the narrative and strategy in Buenos strategy in Buenos Aires.
It's been about 6 months now. What is the main lesson you learned that you want to share, that you would like to share? I really like this concept of depositing and withdrawing payments. Would you like to tell us a little more about these lessons? Yes, because if you think about the pain points, after all, Wallet Connect is, first and foremost, a B2B business with a consumer-focused brand.
So, this is B2B2C. And we focus on what appeals most to consumers . So, contributions, for example, you go to a store and you can just pay with cryptocurrency. No crypto card, just direct crypto just direct crypto transactions at the border. This is very attractive and very tangible for the average consumer average consumer .
But when you actually talk to companies, they actually have the opposite problem. They actually want to pay consumers, whether it's a marketplace where, for example, they have to pay multiple recipients, or even a content creation platform where you have people creating content, say, in the Philippines, in China, in South Africa. They cannot support every possible banking platform. Therefore, paying in stablecoins is really attractive for them, as it greatly simplifies their logistics. So, initially we saw a lot of demand for payouts because that's what we focused on, and it was kind of a mistake that if you have a hammer, everything looks like a nail.
But then, when we saw the pipeline develop pipeline develop , we had a much greater demand for payouts. And it was quite interesting to watch how WalletConnect, having built this huge wallet network with over 700 wallets, actually had quite a competitive advantage in this market. I think in the end, distribution also matters, right? So, I think this is extremely important. Yes, I mean distribution, let's say, for users, but distribution, I think, for agents is quite important now.
I also think that the infrastructure is taking shape. There are many different iterations that you want to provide to satisfy both human and agent interaction. But ultimately, I also think people will use tools like harnesses or agents, but you will still be the one who will still make the decisions, like safety fences. Yeah, so I think that yes, we're switching yes, we're switching like gears, right? I think in giant e-commerce you will definitely see significant growth, especially on the standard side.
But I think there is no strong PMF like a stablecoin, right? I think we are still in a very experimental phase. I think things are moving in the right direction right direction . And I think at the same time we're moving in the direction of wanting to provide more protective fences for agents. There are now many agents.
There are now many , let's say, " , let's say, " beastly" modes being promoted in various trader command line interfaces , and people are just looking for more tools to advance their other trading experiences, right? Did you hear about the giant talk at Money 2020? How did the payment side go, right? Explore 2, I think it's a little too technical, but you know, stablecoin payments through an agent, is that something you hear more about? Or, I think the reason we hear about this correlation between stablecoins and agent payments is because they are both internet internet technologies, right?
It's almost like they both live in the same house. There is an almost intrinsic reason why they should work together. But there's an element missing here where stablecoins have been successful, because they've definitely provided a very clear experience, where self- custody wallets have a good experience with stablecoins, where you have the right controls and permissions to actually allow that. And USDC was actually a pioneer in this, where you can do what's called pull payments, where you don't have to transfer something before it's confirmed or verified by the counterparty. So, you can essentially authorize a payment without actually calculating the payment in the chain.
And that's how most card payments work. So, authorization is what made stablecoins work, not just because they are tokenized dollars. And, in fact, agency payments actually lack these aspects. The authorization part is clearly missing here. So, like you said, " So, like you said, " beast mode," something like YOLO, let the agent do whatever you want, that's pretty fun if you want to create a mini- want to create a mini- app or a quick PowerPoint presentation, but it's not so fun if it's actually going to manage and buy a bunch of flights and hotels.
Yes, that was the actual purpose of thinking about purpose of thinking about , planning, and executing this MetaMask agent wallet, because the whole point was that I was testing mostly that command line interface, which as you can see doesn't exist right now, right? And, you know, I would definitely be willing to sacrifice some latency if I know there's a, uh, transaction simulation detector, if I have some specific insurance, uh, on the transaction. Er uh, on the transaction. Er , so there's actually a security check from above, right? Even before the agent signs or carries out a specific transaction, right?
So I think, uh, um, yeah, I think that this Yolo mode—it's something that, if you're a serious, uh, kind of , let's say, trader who's not just acting as an agency, but if you're actually running various, uh, um, uh, trading operations at various levels, including criminals and forecasts, you definitely need to engage these Garleys. And I think eventually we'll also get more Garleys, stronger Garleys, warranties, you'll probably have some tradeoff, and you'll have different settings. But yeah settings. But yeah , I'm glad to see that, but I also see in a way that we're still in a big experimental mode because, you know, playing devil's advocate, I don't know if you're checking exports up to certain volumes. You see exactly the same agents performing the same transactions.
So one could even argue that it's still too early to see PMF that it's still too early to see PMF . But yes, I'm glad. So, I think you shared some of the lessons learned here. Which are also misconceptions that I think exist right now in Web 3 that we need to change our minds a little bit, when in fact we're talking about both the larger payment vendors like Web 2 and the payment vendors like Web 2 and the counter- counter- players. Yes.
Um, I don't want to be too negative, but too negative, but basically when you think about cryptocurrency, we always think we have experience, obviously. We've been building this technology for so long. Um, we understand that very well, but there is definitely more leverage when they don't need us as much as we need them. It's really a game of distribution, and a lot of the things we could replicate they already have . In fact, even when we talk about barriers to agency payments, in theory card payments handle permissions and authorizations quite well.
They don't need a new version. So theoretically you can make agency payments using cards. Um, one thing they do n't have is the self- storage aspect. And that's certainly one of the biggest validations that we've seen in talking to these payment service providers where they have to comply with travel regulations, Mika, and all these new regulations all these new regulations . And WalletConnect was able to take a very good position because we actually did n't create it because of travel regulations.
We created wallet verification, we created login using Ethereum back when NFT communities were being created, when there was DAO governance, when there were all these airdrops. We created all this technology for a completely different reason. And then we actually got this regulation, and then we built everything right into these self- storage wallets, where you could do wallet verification and identification built into the WalletConnect SDK built into the WalletConnect SDK . So that's one of the obvious things when you realize they don't need our distribution; we need their distribution. But they don't have the self- storage aspect because it completely changed the way the world works, where there's always this counterparty or third party that controls the user, rather than the user controlling themselves.
I agree. I...I agree with that. What about, um, I don't know, identifiers. That is, you know, decentralized identification.
I'm thinking about the agent's reputation now. Do you think it still makes sense, or, you know, will the bigger players just create their own centralized reputation ecosystem reputation ecosystem and that's it? Yes. I mean, identifiers are a simple identifier within a broader spectrum. As I mentioned earlier, self- care is a key differentiator key differentiator .
For example, before the advent of identifiers, for example, you would simply go to some server and say, "Tell me that this user is this user." You don't have the " don't have the " person in the loop" aspect because the person is not in control of their identity. Now that a person is actually in control of their identity, we need a great user experience, allowing the user to have full control over their identity. And DIDs provide this thin layer that connects the server-based infrastructure and the wallet-based infrastructure. So, we use DID in the wallet infrastructure.
Now the question is how does the wallet interact with the rest of the world, and can they read these DIDs they read these DIDs in a way that they can be used in their systems? Yes, great. So, we have 1 minute left. Something like that minute left. Something like that , what are you waiting for, what do we need to work on, what would you like to see in the next, say, 2-6 months, right?
Space is developing very quickly. Yeah, so I think when we think about card payments, we take it for granted, but like back in the day , in the 90s, if you gave people those kinds of numbers on a credit card, they were kind of being ripped off , they lost all their money. There was no trust. This is how we treat wallets, addresses, it makes us worried. And then Visa and MasterCard spent the next 20 to 30 years building all these protective barriers and infrastructure, and essentially the user experience that we now take for granted.
Well, that's what we need to do for wallets. For example, wallets should have this built-in and very native experience where everything feels just as secure. Where there is a two-sided avatar two-sided avatar , detailed control for agents, the ability to remember your profile through one person, go to the person, go to the website, just say " website, just say " I'm Pedro" and pay with any wallet I have. This is a vision where wallet payments and card payments will be almost indistinguishable from each other, and will actually be better because it is a self- storage version of the form. I agree.
I should even add, you know, I think that infrastructure with permissions enabled, like by default, you know, is built by design, right? I think that's something we definitely need to have, and I think detailed detailed authorization and protective rails for certain actions sound good. Wonderful sound good. Wonderful . Thank you very much, Pedro.
Thank you very much for listening. I would have liked to have had a question and answer session, but we're out of time, and yes, I appreciate the time. Thank you all. Thank you.
Automatic transcript — names and jargon may be misspelled.
