right up here. Hello everyone. Happy Saturday. We're almost done with the Denver. Uh I am Jacqueline Melnik.
I'm a senior crypto reporter at TechCrunch. And I'll just let everyone introduce themselves super quick. I'm Nitia. Um I'm building Capsule. We're a transaction signing infrastructure platform um for wallets and DAPs.
Hi everyone. My name is Brandon. I'm the CEO and co-founder of Phantom Wallet. Uh, Phantom is the MetaMask of Salana, soon coming to Ethereum and Polygon. Hi, uh, I'm Henry.
I work on Privy and we build, uh, tooling to help onboard users to web 3, whether they're new to the space or they've been here for a while. Hey everyone, it co-founder CEO of Dynamic. Uh, we're an all-in-one uh, user management system for web 3. So anything from authentication to onboarding to authorization um you can use dynamic. Cool.
Thank you. Yeah, there's the woo. Uh so the first question is like why is the wallet layer important to each of you? It's honestly like a pretty central access point to get into crypto and for some it's complicated and for others it's like so easy that you don't even think about it. But why does it matter?
Yeah. I I guess for me I think everyone's reasons for being in the space and caring about what we do are like quite personal. Um for me the reason I came into crypto was very much this promise of an open system that anyone could access and part and parcel of that is having interfaces that anyone can access securely easily and wallets in a lot of ways as the sort of functionality of what you can do on blockchains have expanded. uh the charter of wallets has also expanded to sort of be that um touch point for everything between what a user wants to do and what ends up happening on chain. Um and so this is really the critical layer that needs to work uh in order for crypto to reach a kind of wider audience.
Cool. Yeah, I can go next. So yeah, a little bit about me. So I actually used to work in the ETH space from 2017 to 2021 at a company called Zerox which focuses focuses on decentralized exchange technology on EBM chains and uh yeah through that experience basically became a power user of MetaMask both from the user perspective but also from the developer perspective and um had the um great opportunity to work on a number of pretty widely used apps. So if you ever use matcha.
xyz or zeroxx API, I help deliver both of those products. And something that I learned while through that experience is that once you start growing the your DAP uh as a developer to a certain stage, there's all these things you want to start doing around analyzing your funnels around onboarding and key actions and things like that. And what you end up realizing is that your entire growth is completely bottlenecked by the wallet experience. And so I felt that there was no better place to spend my energy in the ecosystem than working on making that interaction between developers and users in the wallet layer as seamless as possible and therefore sort of like supercharging the entire ecosystem. So yeah, that's why I'm doing what I'm doing.
Uh on my end, I started in the space working on IPFS and Falcoin. It was really about open data systems. And I think my main interest up front was uh questions of self-custody. Wallets today do like a hundred different things. They are where you hold your keys, but they're also the main interface that you have when you connect to a website.
They're how you take data and assets uh from DAP to DAP to DAP, which is arguably the core UX advantage that Web 3 has today. Um, and so it's really I think they've become a bundle, which is the OS into Web 3 as a whole. And yet they are distinct things. They're signing keys. They're a way to manage control.
Um and and I'm very excited to see basically wallets get unbundled and rebundled. I think we've only just started seeing what wallets can be. And uh at least for me, the exciting parts are um basically signing infrastructure for self- custody as well as the way in which as developers we manage the interfaces that connect end users to blockchains themselves. Yeah. So on my end, I think the reason we founded dynamic is this premise that if you fast forward 5 years, the way you interact with websites and apps is not necessarily kind of email login, but rather kind of a wallet interaction.
It's a much deeper interaction. A wallet is this magical device that's a payment device. It's a storage device. It's a signin device to your point. And that that if if you know there are a lot of issues with how you onboard into wallets but once you do once you have a properly working wallet something like Phantom uh that interaction becomes magical.
It becomes an order of magnitude better than kind of an email login or a login with Google where you have to re-enter your information every time you go to a site. And so for us that was this like magical moment about wallets. And so it's that understanding of the if they work work properly, it's it's a fundamental better user experience. So that's why we got into dynamic that's that's how wallets kind of play a role in in our day-to-day. How can the wallet experience be easier for like we already have millions of people using crypto wallets but if I like try and onboard one of my friends like they'll understand it when I'm sitting there but once I leave I don't think they understand how to use it at all.
So what are like some of the solutions that you guys are working on to make it easier? Yeah. Um I think on our side uh a big part of it is I think as Henry mentioned that wallets have just right had this scope expand tremendously as the scope of what blockchains can do have expanded and a lot of how we see our role in that is enabling any kind of wallet to exist. If we kind of pair a wallet down to its base functionality, it's a product that signs transactions on chain. Um and that could be anything.
That could be a payments product. That could be some like splitwise type way to share um share payments with friends. Um it could be NFT use cases, games. Um and so the way that I think about that is removing the kind of barriers around key management. Um, and really allowing kind of the core upside of building on a blockchain rail to begin with, which is interoperability, having the same assets you can access anywhere and allowing developers to access that primitive in a way that serves their users well, but also um, allows them to kind of build and focus on core functionality.
Maybe to sorry to jump off of that simply I I think by unbundling things in that way the really exciting thing for me is the idea that the wallet can start morphing with the user. It's like this magical device. A user touches it and based on who the user is uh it takes the shape that feels natural to that user. And I think some people will want you know DeFi swaps in their wallets and very advanced functionality around uh NFTts and other things. and other people just want to be able to say uh play games and sign once at the beginning of a session to cap you know a session to $50 in a game that they're playing or something like that.
Um and so I think we've only scratched the surface what the UX of Wilds can look like and it's going to be very exciting to see a lot more attempts at reshaping them. Cool. So yeah, my personal opinion here is that everyone focuses a bit too much on the technical uh dreaming up different types of technical solutions for the onboarding problem when there's so many lowhanging fruit around the operational aspects of building a product. So things like user ed investing in user education, investing in like a real customer support system, these are like wellknown like solved problems from web 2.0 know, so to speak, that basically everyone just completely ignores cuz it's not as fun to talk about as technical solutions.
So, um yeah, vast majority of web 3 products out there just throw people into like a Discord support or Telegram support and it's uh honestly like borderline negligent. Um you know, at Phantom, we have like a professional customer support team that has metrics and SLAs and all of that and you know, that does wonders for helping people stay educated and onboarded. So I think there's a lot of lowhanging fruit. Yeah. Maybe just to add to that to your point, it's the onboard the key management is a part of it to your point kind of abstracting that away that helps with onboarding, but some of it is actually not related to the wallet itself.
It's related to the use case at the end, right? Which is we all know this like real product market fit is people doing something despite the pain at the beginning. And so, uh, a part of kind of how you onboard people into wallets is not necessarily improving the wallet, but improving the use case at the end that makes them go through whatever hurdles they have to go to in order to to get to that end use case. So it's not we can we w we can and there there are a bunch of incredible companies working on this of optimizing how you abstract away keys how you kind of create a kind of embedded wallets within existing applications sort of like what Coinbase did with NPC uh on their main app but that's not necessarily does that will that get us to kind of the onboarding of the next billion people it's more about the use cases at the end uh but I will say one more thing which is there is a hypothesis where the way we on board is not necessarily get people set up with wallets but rather enable existing apps on their phones as wallets. So turning again your Coinbase into a Coinbase wallet, turning your Robin Hood into a Robin Hood wallet and so on.
And there's there's an an entire kind of discussion to be had around that as a way to onboard folks and I feel like there has been a fair amount of like mainstream adoption. And I'm not saying like, oh, people aren't getting into it, but we've seen like, you know, a lot of use cases with DeFi and then like NFTTS with Reddit. So, we've seen like major web 2 players get into this. But what do you think will be like the next wave that will drive adoption of crypto wallets and keep bringing us towards that quote unquote next billion users even though it's the first billion but yeah I guess maybe one side note before we start there is I I think the industry focuses way on on boarding and bringing new users to the ecosystem way too much. There's actually two aspects to growing an ecosystem.
There's onboarding and then there's retention. Retention is making sure that people who are entering the door stay, they're having a good experience and and all of that. And I think that we're failing extremely hard at at this retention aspect. There's again so many low hanging fruit around like making sure people are having a safe and secure experience once they're in the door. I think we have a number of really awesome use cases already with DeFi and and NFTTS.
And so I I would challenge I guess a lot of uh ecosystem players out there to focus more on retention. Um anyway that's so but but that's kind of besides the the question. Um we'll talk about it after. Yeah. I was I almost wanted to build directly on that where we are talking about onboarding users but like what are we onboarding them to?
It's like if the first thing that happens to someone is they immediately get hacked or a victim of fraud like we've really just onboarded them off a off a cliff. and instead it'd be nice to start talking about getting people active. Um, and a lot of that ties directly into use cases. So maybe our northstar should instead be like the first billion transacting users or like daily active users. And um I think a lot of those use cases uh I guess my background is much more in the um the kind of finance world and onchain payments.
Um my I think there's a lot of promise there. Uh but yeah that seems like a promising place. Yeah, just just to add to that, I I think uh your point about the points about kind of onboarding and retention are critical, right? Because improving onboarding is an optimization uh type change, right? So you can increase conversion by x% by again moving away from keys or or increasing education.
Uh but it doesn't change the top of the funnel and it doesn't change the bottom retention part of the funnel, right? And so you you really wallets on their own can solve that. It's really about kind of a sort of like any other commercial funnel awareness at the beginning, a reason to start and then a reason to stay and it might be gaming, it might be DeFi, their NFTts I think are fascinating, especially around commerce and memberships. uh but it's the onboarding part and kind of focusing on wallets is is an optimization problem versus kind of a fullfunnel type thing. Maybe to try and and throw out a few names of products that I think are showing very interesting things that I'm excited about at least in the space.
Um to the point of like user activation and retention. Um, what scares me is when users use a product and say, "I use it because it's web 3," as opposed to, "I use it because X, where X is, I'm doing this thing with Friends or or other parts of this." Um, as I think we've all said, interoperability and composability of assets is a huge part of what makes the space special. And I look at products like sound or I look at products like um stems and these are products that have a sort of innate viral loop where you can bring friends on to have an experience with you. Um and I think that's a lot of what I I get very excited about moving forward is as as we've started to smooth some of the user experience in the space, it becomes a lot easier to send a link to someone and that's actually a really good reason for that person to get on board into a space whether they care about the space or not.
To wrap things up, my last question is where do you guys expect to see crypto wallets in like the next five to 10 years? I know that's like forever, but with that we could add in the near term the topic of retention. How do we even get that mass adoption and then retain people so that in the next 5 to 10 years we could even have crypto wallets as a conversation? I I guess I can start uh more in the 5 10 year part. Um, my I if I were to place a bet, I would place a bet that your next wallet is actually an app that's already on your phone, right?
It's it's either again a Robin Hood or it's a Steam app or anything of that sort. And over time, there's a wallet that exists as part of that app. And so the if you fast forward five years, I think we'll have a combination of pure kind of c like horizontal or breadth first wallets um like again like Phantom uh that do an incredible job across a myriad of use cases and then depth first wallets that exists uh purely in the background of existing applications uh and let you interact with that use case, right? and and touches into things like identity, right? The wallet they use for gaming might be different than the wallet they use for financial services.
And so, in a lot of ways, I fundamentally believe that the way everyone gets a wallet is actually just keep your current apps on your phone and you're going to have 20 wallets on your phone within 5 years. Right? That's that's a little bit the hypothesis there. I'll come in with maybe two I agree with everything you said. I'll come in with maybe two hot takes.
Um the first is moving from five years maybe to 18 months. Uh it's been hard this week to walk around and not hear someone talk about account abstraction. Um, it wrote a really good post on the wallet wars and I think we're maybe entering, you know, wallet war 2 uh with a lot of the account abraction stuff that's going to happen where there's going to be a flurry of smart contract wallets uh appearing and I think it'll just in the short term going to be a very confusing time for developers when trying to understand how do I build my app and what should the integrations be like. Um, so netn net over the long term I think it's going to be a huge improvement over the short term. I think it's going to be a little chaotic and so it'll be very important to try and you know figure out what pairings and and how we work uh these things together well to to evolve the UX in the space.
Um the second thing in terms of how do we improve retention long term this is a very hot take but I think it'd be interesting to see more web 3 products with sort of web two business models. um the emphasis on some of the ways in which we monetize I think create a lot of churn in user bases and so if we can return to and I'm you know hopefully then evolved to to sort of a synthesis of business models that include tokenization and uh more traditional forms of of monetizing uh we might have stickier experiences in the apps that we build. Cool. Um, I think that bottom line is like no one really knows how it's going to shake out. Um, there's so many different wars going on in all different areas of the stack.
Like there's the wallet wars, the multi-chain war wars, like the open C versus Blur, all that kind of stuff. Like I think right now it's just important to kind of uh um embrace experimentation uh not be a a maximalist any way or another and just sort of uh yeah just kind of look for those new use cases that are popping up and and all of that and just be nimble. So that's that's my opinion. But in terms of retention, yeah, there's a lot of I think a lot of uh lowhanging fruit like I mentioned around like user safety, education, anti-camming, anti-ishing stuff that um yeah, that we're going to be really focused on. I think as a space uh if we think 5 to 10 years ahead, I think our work is very clearly cut out for us that if what we're calling mass adoption doesn't happen in that time frame, I think there's something very serious that needs to be examined about kind of what the promise of of crypto is and and what the true value that that we're adding to to to the kind of global human population is.
Um, and kind of going back from that, I I hope there's a few things that we aren't doing. in five to 10 years. I hope we're not still using the word wallets in these mainstream consumer type um type of context to describe what is currently a very broad range of functionality and I think actually is like confuses a lot of people. Um I think the other thing I really hope that we don't do is have these sort of uh value judgments placed on the way that someone chooses to interact with crypto. be it maybe a a centralized uh case or maybe someone's only using crypto in a gaming context, but removing those value judgments around like, oh, you're not using a ledger, you're not as serious, or um yeah, basically blaming people when they get fished.
Um hoping that we almost have a more invisible nature of of people's interaction with the space. Great. Well, thank you everyone for listening in and thank you to our panelists for sharing their thoughts.
Automatic transcript — names and jargon may be misspelled.