Wallet, the Key to Mass Adoption | KBW2023

on Theo um it's good to be here um I'll just briefly introduce myself uh I'm new um I run a fun called Rubik Ventures um we're early stage crossb dual base between New York and Hong Kong um we're early stage only so see series a um and yeah um it's an honor to be here with um both these speakers uh uh aen and Pascal um I'll I'll let you guys introduce yourselves hi everyone thank you for being so hardcore that you know did launch and then sit over here uh I'm a wi I'm currently the CEO of trust wallet uh where how many of you guys heard of trust wallet just curious okay uh well pretty cool yeah that we're talking about some brand awareness by surprise um yeah we're the largest uh self custody Mobile water at the moment uh so we have about 17 million downloads totally and on a monthly basis we have about 12 million active um and we also have our extension that launched eight month ago and right now it just passed the 1.5 million Mark um yeah so very happy to be here share our six years of Building stories and then how we see things forward and learn from Pascal as well cool I'm Pascal goer CEO at ledger so now I'm afraid to ask the same question like who has a ledger ah look at that not bad I was very afraid because with the numbers that aen just disclos on trust wallet there just like maybe two two people are going to write their hands now but Ledger it's okay we sold 6.5 million units of our devices uh and we are a security company we secure for retail and you guys know the product Ledger Nano s+ uh Nano X stack is coming so we have this new product that is coming in the market it's hard to build the ink Curve screen is the world first when it comes to a hardware device period so uh but we're working hard and uh it should be out anytime uh soon now uh and on the other side we also help Enterprise so if you want to understand what Ledger does we're safe manufacturers we do little saves for individual usage on the retail side and we do very complex and uh complex saves for the uh Enterprise side voila amazing thank you for those introductions um uh I think one of the most essential questions to address for um Mass adoption is how to empower in individuals through wallets um how how do you guys um what do you guys think about that just from your different perspectives you know one is um self I mean they're both self- custody one is hardware and one is software um I want to go first either okay okay I knew knew this was going to play like this all right so so first of all we um we don't think too much in terms of uh necessarily sort of web 3 and and crypto adoption uh we think in terms of security and more globally web security um we think that when you think about your web 2 experience um you can see that more and more you need uh to increase the level of security with 2 FAS with you know sort of um different dongles uh you see that security is evolving from login password to pasy uh all of these things are happening and they're happening because we are getting hacked sort of more and more every day and you know uh 23 uh is a bad year for hiking 24 will be worse 25 will be worse like you know and Hiking won't stop and it would actually increase so the level of security needs to go up and especially especially when you think about crypto it's even worse um sure it's bad when someone enters into your phone but it's even worse if you have a billion dollar in Bitcoin sitting on it because taking those private Keys uh is a is a one-way direction as we know so this is you know so far in the world you've been connecting with your Google you've been connecting with tools that were centralized tools and we believe the wallet will be the key to your uh future security and the key uh to your future login into Services uh and also if crypto exists and you know crypto needs to exist in a decentralized way and in a self- custody way it means that your private keys will be the way to engage with your web experience in general so your wallet will be the central point for connectivity and your wallet will help you connect with your money with your identity with your health data with a bunch of things that will be tokenized or not but this will be uh you defining you this will be under your control and allow you to connect to a lot of services so when wet can offer that kind of service we believe this this is really when Mass adoption will happen because the use case will be extremely clear for wet and for uh crypto as a consequence that's very well said and I think in lined with a lot of what we're thinking about as well I think when we're thinking about empowering users for Mass adaption the question is what do we Empower users for I don't know whether people have thought about that and and at least from our perspective it kind of go backs to why do we even do web through or crypto to begin with like so what's the impact to the Daily users from our interpretation there were two key empowerments that we want to do the first one is ownership how many of you have your crypto okay let's do this how many of you have self- custody ownership since three years ago okay okay those are the hardcore users yeah um and how many of you have self- custody ownership now I wouldn't embarrass the rest of you who though but if you don't I highly encourage you no matter it's Hardware self- custody or software self- custody have a little bit of the found and then you can have a taste of what does that truly mean that you own this thing on the blockchain that no one else can take it away from you and you have to be a grownup to safeguard it because the majority of the security problems doesn't actually happen on the hardware software side it happens on the user Behavior side but I feel that only when people start to have the taste um of the first self- custody and ownership they start to understand the value of blockchain of that borderless of that permission list um so for our perspective is how can we lower the entry barrier for more people to have that first taste of self- custody ownership having that understanding of that ownership and then they can graduate or level up to any other ways that they feel better with that ownership no matter that's the hotwar wallet or even they have the taste of it they feel like I still trust custody more that's totally fine but I think just like any educational level people in their web three journey in the blockchain journey needs to have that first experiences of self- custody and from our interpretation software is an easier way for the entry barrier you have no cost you easily download it as you have the internet and the down the size of the app needs to be small right it cannot be 500 megabytes that you downloaded forever it has to be somewhere about 50 70 megabytes easily accessible to any mobile phone in the developing countries and that's what we're aiming for is that how can we always lower the entry barrier for people so that they can have the first taste of the self- custody ownership and guide their Journey throughout the way that's a first part of empowerment from our side of ownership the second part is you know besides ownership what what else are we building in the web 3 space how many of you are Builders of DS not that many okay two three well I'm sure that you guys are building something really exciting by leveraging the infrastructure of the blockchain that you think the we to world doesn't give no matter that's giving a better kind of a revenue sharing interest sharing identity sharing you know self-expression whatnot then we want to give access to the users to have the taste of whatever the exciting things that the builders are building and software from my my perspective then we are that bridge um once people have the ownership what do they do with it how can we give people more taste that accessibility that utility that the industry has to offer we what is not the end goal we're just the infrastructure we're the bridge to bridge people to better accessibility for opportunities so that's what we are focusing on for the empowerment given the product value proposition we choose uh which is different from hotwar wallet but we work together to provide that full Suite of the services for users in the space I think um I think wallets are ultimately just an interface right and um where how do wallet providers ensure a balance between userfriendly experiences and robust security measures that quite frankly don't feel very user friendly today um yeah I don't know because people keep on saying this but then I keep on using the web and I don't think when it comes to security the web forget about crypto but the web is not very user friendly I mean my bank online is not super user friendly you know uh and uh if you think about every security feature that you need to activate you know even like to log in back into Twitter I lost my access to Twitter the other day and I was trying to log back in you know it wasn't super user user friendly security is very difficult so if you want to make something extremely secure you want to put locks on the door you want to make sure that no one can get in so of course it's going to create some friction in terms of user friend liness and the problem is this you know we've been used to download an app on our phone and sort of Click yes yes yes and then you play the game and it's so easy Etc it's the it's the web of convenience and it's something that you know Google Apple and all of these guys have been doing beautifully uh but it comes with a consequence the consequence is they own you your data Etc you become more of a product for these companies but certainly you don't control anything and so I think it's a bit of an illusion to think that you will be able to certainly control everything but it will be you know day one sort of as easy as you know your Google or your Apple experience you know there are consequences to to choices if you want more control and if you want to own you and yourself and your digital self then you know there are some hurdles there are some learnings there are some you know you're not going to switch from from one day to the other so and I don't think it's very hard you know I I have um so that's number one number two I don't think it's very hard I had a discussion with someone in New York the other day and he went from custody to self- custody and two is a big surprise self- custody was easier and uh but you can easily understand why if you're in custody and if you move a lot of money in crypto for example you have many steps you have kyc you have like you know certain things that you need to do in order to access your funds your funds are not accessible all the time you need to call your money manager they need to to triple check your identity before they release the fund Etc there are a lot of these processes that are very manual um not just in crypto but in crypto but in crypto too in self- custody you know once you set up your Ledger wallet you're in charge and you can send your money the problem becomes you become the central point of failure and so you need to be careful with you know the the addresses that you copy paste Etc so you have you suddenly it in charge of you security but there are so many features that work so much better when you're in self- custody uh that I I don't think is very hard to use and also um a lot of people in this industry are buying and holding so you know like I don't I'm not going to do the game like so who if you bought your coins in 2015 and you you didn't touch them since then like you know sort of raise your hand but there are a lot of people that are like that and so I see it with Ledger some some people give me they're like oh Ledger is difficult and then they talked to me about the product that we had in 2017 uh and they haven't touched The Ledger since then uh and then when they update their Ledger and they go through the new experience that we've designed because in in six years now we've made a lot of progress they're like oh suddenly it become easier it became easier to use so there will always be friction security and empowerment makes it that you have to learn new tricks and it creates friction these frictions will disappear uh in time uh but I would argue that already self- custody is not very difficult I mean to use tress wallet is not very difficult you download the app you follow the steps Etc you just have to pay a lot of attention to what you do because once you have those those 24 words you need to know where you where you store them etc etc so there are some things that are just about education and yes if you enter this game without any form of Education people Al also say to me I understand nothing about crypto you know something like that sure and I'm like sure I mean if you don't pay attention if you don't read anything just like everything else in life you cannot understand understand a problem if you don't pay attention and you don't do a minimum of education but if you do that uh I would argue that using leder or using trust wallet is not that difficult today I really love when he said and I resonate a lot with is that self custy sometimes is easier than custy simple example recently I got a data then I realized that our download to setup W it conversion rate is about two to three times of that of centralized Exchange which one is easier which one is faster one minute set up versus you know waiting for one or two days for kyc to approve um well so I think sometimes it's more dialectic to look at in what scenarios do we consider security versus easy to use and I I will emphasize this I think that there is no golden standard to say that here is your perfect division percentage of how much you focus on usability how much you focus on security security I think the key is understanding what is the users are using in that particular context and which one matters more and also how would the users use this product and then what needs to come more important let's say if someone has a hundred million dollars I would not recommend that person to use a software wallet just because there is more potential exposure points you know extension is the most vable one then it's mobile then it's probably something that's air gap Hardware so then Al I'll emphasize that for that users usage scenario you really want to sacrifice usability for anything that's security purposes but if you said that I have $10 my goal is just to be able to use it most conveniently on the blockchain then even if somehow you made a mistake then you figure out that you lose the you know $10 you're okay with it so understanding what is is that specific context of the the best feet for the purpose of that user is quite important uh I use an example is that in the onboarding faces we had a huge debate about do we ask users to painstakingly go through every process of the setup for the wallet or we somehow speed up the skip skip the backup faces until they have some funds in the wallet that they had a skin in the game then we painstakingly ask them that you have to back up you have to back up back up back up back up so then I would say that in the first scenario you have even nothing to use usability is quite important for you to get to the destination but once you have a ski in the game you start to really care about it security becomes so important then security is going to be the feature that you really want to emphasize it so just to summarize that I think if your builders in the space it's very important to think about what is your users using the context and what m manage to them more and every specific product every specific Builders also have a different take to contribute to the full Journey that users use no matter it's in web two or web 3 and we all partner and collaborating to create that full experiences that the users can choose rather than one product can absolutely kill it all to make it the perfect combination of everything which I don't think will ever exist I think there's um those are really good points and I think there's also a big difference between what beginners are like so um the education piece being really key and then your experience users how are you guys thinking about um I guess the experience on on like both types of Co cohorts I mean education is a function of marketing for us um so probably $1 out of three is spent on education and educational content and you build it in the form of an academy where you have you know content for beginners and content for sort of advanced users um but at some point you know the industry has to evolve and I think we're in we we sort of started that movement the industry has to evolve so so you don't need like sort of that much education because you know I think would you say that for your mom or you know yeah because the mom is always a bad example so first of all my my mom understand nothing one day I was sitting in front of a computer with her and I was talking I was in the advertising business and she had a big page with a big advertising you know and I was like do you see the advertising and you know honestly it took her 10 minutes to realize the page the advertising Etc so I think sometimes technology is not designed for our grandmothers our moms Etc you know like technology skips generation so so you know of course you you're building for the mass market and for most people to be able to use it so there is there needs to be like you know a certain function of usability and you know for people to be able to intuitively understand how it works Etc and of course we we we working on that but you know this will take 20 years to build and so we're really talking to people that are 18 now and that will 4 in in 20 years so as far as I'm concerned you know I'm building products for the Next Generation because I don't think that you know the the generation that just passed like you know we will necessarily jump on board crypto Etc and if they do is because it needs to be super easy so for my mom to use her phone and the internet like it had to become the iPhone it had to become like you know something extremely easy to use because if you think about it the iPhone is compared to how you would use the internet in 1995 the iPhone is extremely easy to use it's almost magical as a product you know it's internet at at your fingertip and and it works without you even realizing what you're doing so when we reach that level of Simplicity of course then everybody can use it but there will be steps in between now and then and and and truthfully if you if you speak to the new generation to people that are 18 20 today they they're born with this so they understand this very intimately and so you know it doesn't it doesn't mean that the products will ever be complex but it also means that there is level of Education that you won't need to to do in a sense that people will be educated by Nature any you know it's uh it's part of uh the technology beings that we're becoming so don't get me wrong I think again like we need to thrive for Simplicity ease of use etc etc but also you know the education that we're doing now I think that will fade away in the future because most will be educated in terms of how this works so the question is how to build products of use of use for newbies and experienced users I'll be honest this is a very difficult question because I find that user behavior is very drastically different between the I would say very crypto experienced DJ and isue users versus newbie users the ass is very different um newbie users ass which we have a lot of them because our wallets are often used as you know the First on boarding wallets for a lot of the people around the world then what they want is something very easy very simple and then get to the first utility that they want quickly they don't care about too many utilities afterwards because they haven't even got to that stage yet just like if you're playing video games you first got your character you just need to know how to use the the only way to you know shot the monsters but you don't need to worry about okay there were five other skills that you need to use for a combination that's that's what the newb users want is that how do I successfully get confidence for my first successful crypto action and that's what at least for our product that we focus on is that we try to keep it as simple as possible even for experienced user when they look at a product they will assume that oh this is too simple it doesn't serve for the users uh you usage but because we try to focus on U users a lot more but it doesn't mean that we ignore the experienced users because we have so many developers product person on our team I would call them to be one of those most DJ people in the industry they build product for their purposes too so how do they make it happen is that then we kind of build a product and Cur it in the way that the advanced features are hidden that if you are constantly using the product you understanding a little bit more you level up you suddenly find out oh this there is that hidden bucket there is that double tab and then you can switch your wallet between you know you be user doesn't even use multi- wallets but Advanced users do so how to create how to understand that leveling up experiences and still leave those opening doors for the advanced user so that they fulfill their needs no matter that that's you know changing the gas speed up transactions cancels Revo contracts those functions are there but you don't put them overwhelming the beginning of the users that is a design challenges every different product will have their own take on how they think the balances um but at least that's how we approach it um there's some kind of conflict of interest I would say for the user needs are not um kind of a Recons considerable still um but I think in those cases I wouldn't go into too much details but that that's the beauty of why we need more products out there because every product needs to figure out that you cannot do everything what is your focus area who do you focus on and be okay to trade off and give up on something else then leave the room for other people who are better served to build that purposes and learn from each other collaborate like there's not going to be one person is dominating all scenario in any industry I can give you maybe a more provocative answer to your question I'm not I'm not sure that they are Advanced users I think for us the one% of users today and the 99% tomorrow yeah no but I think for us the the categorization is like developers versus you know sort of the rest of the world so um we because when we launch uh Advanced users features on Ledger usually we have I don't know like a thousand people using them like if that um so so they're never used um and so we focused we we decided to because we had that debate intern internally and it's a it's a NeverEnding debate and it's very difficult to do two products in in a way like you do one product for sort of 99% of the people and you do another product for 1% of the people like there is no logic in terms of business uh behind it uh but what's more important to us is um developer and developer features because we've built Ledger as a platform on top of which third party developers can code uh and there we have uh I think it's 15,000 developers now that are sort of working on coding on top of uh The Ledger platform uh third party developers uh and so that's super interesting so to have developer tools and uh developer Community around us I think you know this is what we would call power users and so you know they develop the advanced features they develop the the the developer features that you can only find in certain mode Etc but I would say that the usage is 99% uh sort of normal uh people don't do stuff that is that is too advanced and the game is with the developer tools and the developers that we work with the game is to De to develop features that everybody can use because in in fact like you know if you think about protocols if you think about features if you think about anything you know what is the feature that is successful if if it's being used by you know a few hundreds people on the planet like you know you want features to you want to be able to use features for millions of users you know uh that's the name of the game so I think for us the distinction is developers on the one side and we have specific tracks for them specific tools specific way of engaging and and and getting code onto the platform and then once the code is on the platform we try to make it as mass Market as possible um I guess there's uh to your point about protocols um how do you guys see Innovations such as multi-chain support and and defi um integration contributing to to mass adoption or how are you looking at it through the lends of you know your respective products I think both of our products are multi-chain right um multi-chain is really hard to integrate uh we support 85 chain right now so we support all the EVMS cost Cosmos move you know cordano porot near Avalanche which is there's no economy of scale because you just need to spend the engineering work to make sure that you integrate with them especially non EVMS um to make it work um for us we have been building multi-chain for four or five years now that's why we get to the scale where we can um the thesis behind it is that we do believe the Innovations and the opportunities can come from all the different chains each chain in the future will have their own Niche Their Own Strength uh the own way that serves the application layers better so we are the infrastructure layer what as to the point our goal is to be able to make the bridge to whatever the space has to offer to the users then we need to open up all those gateways connections points um for the users um so then we don't make choices we just have priorities be able to knock it out um and whenever any chance any dabs have the potentials to bring you really good use uh use cases and utilities to people we do want to make sure that we can make the bridge happen for both sides um so that's how we see it that's why we're chain agnostic we do you want to support the industry as a very important infrastructure layer between the users and the and the uh the TS I got the same answer so except I mean you know I don't know how you guys do deal with developers the thing is um I looked at that problem back in you know 17 and I thought oh my God like we'll never make it because it's just too much and you know how many developers can we hire to do this Etc so we decided to you know open the platform for foundation third party developers Etc so we can sort of do the work with the foundation so right now if you if you have a layer one or Layer Two whatever you have like you can do the job yourself to Port your layer one or Layer Two onto Ledger we'll just approve it from a security standpoint so we we still have to do something in terms of security in the end but the the whole development uh to bring your chain on on Ledger can be done by by you your team or or team that you hire uh and maintenance uh is also the same because it's one thing to Port a chain uh on Ledger it's another thing to maintain it for for years because they do change Etc so we tried to work more and more with you know the foundation themselves uh to just to make sure that we have everything up to date and we have a partnership to serve the users because um you know a few years ago foundations were not paying a lot of attention to the work that they were doing with wallets uh it was like sort of a given uh and everybody was you know it was sort of a hot potato that people were passing on to each other and you know nobody would care much but in the end you end up with an experience where sometimes broken users complain and you know you never know really whose fault it is uh and so we're trying to streamline that process basically just to make sure that we all have sort of skin in the game and that apps uh at on Ledger are updated and that the service is very uh consistent for the user but it's uh it's a process like you know and we're still working hard on it we can exchange some notes afterwards um I guess the last question is where do you guys see the challenges um that like the industry or you know needs to solve for um just more more conversion more adoption top top like not top three top no but for for us it's a very biased answer you know for us we get we got work to do and we need to release Dex so um STX is you know when you do Hardware uh it's very different than software only of course you know software you can modify on the Fly you know Hardware is once it's built it's built uh and so think about your phone uh your mobile phone in 2000 if you had a mobile phone in 2000 think about your phone now and see how they have evolved and when you do Hardware you have three layers Hardware operating system and and the software layer on top and if you think about your phone those three layers have evolved at the same time so stacks for us is just uh it's a bit the moment where we think Apple invented the iPod uh and so we think that stacks for Hardware wet will be sort of the iPod moment but we still need to build all the way up to the iPhone so we have uh we have work to do so you know watch Stacks uh the usability the ease of use the you know the form factor like everything is so much sleeker that what we've done before doesn't mean that other products are no longer good s+ and X are two great products uh when you want to enter the market but stack will be the next level of usability so um this is the next step and then we have a long road map of hardware just to always make things much easier to use and also sexy you know the reason why you use your phone is because it's a sexy product it's uh you look cool with it so you're going to look cool with your Stacks the same way that you look cool with your iPhone so the question is what are the barriers to the industry's adoption yeah okay I think a lot of the industry participants may you know we're all wallet might say that hey wallet ux breaks but given my experiences I heard stories in the developing countries I I think the key is What problems are we solving in people's life with the technology because if you truly solves people's problem in the life no matter how painful it is people jump onto it and for example the there was a village in Africa that they are not able to receive donations in fi in a very good way and even to store it because they don't have banking access uh I was by a chance learned that they got a crypto donation and they use it in software wallet in in trust wallet and then so I was like how does a village treasury manage one individual softwater account guess what solution they come up with they appointed 12 people because it's 12 words for that secret face each person remember one word how do they prevent corruption when they need to spend that crypto or use it or move it 12 people needs to get together so that they sign it is that painful kind of painful is that you genious yes but the real problem was that they need a way to solve the treasury and there is no existing system that solve the problem and then they need an easy way to do it this is their easy way to do it I think the key question is that you know we cannot just attract users coming into the industry when it's a bull market the market increases and people coming here expecting getage quick we still need something really impactful useful like we're talking about usdt how or USD stable coin in general that it's being used to hedge against inflation like we need more of those real world use cases then we can expect that no matter how we Bridge those users into the space then we're making an impact in the society amazing yeah um I think that there's uh I think everyone's got a a point of view you guys obviously have your point of views um and uh it is the ultimate interface for Mass adoption so um sounds like there's we just continue to make progress um I don't know if anyone in the audience has questions at all um I'll see no okay I think um I think we're all all set thanks for your time thanks [Applause] [Music] everyone