Wallets are the main user-facing apps of the blockchain industry, enabling your interactions with this space. They facilitate sending and receiving assets and engaging with blockchain-based protocols, also known as dapps.
“Wallets serve as your port to the world of blockchain.”
As blockchain ecosystems and applications rapidly grow, wallets should also evolve, and we believe their growth lies in verticalization. This trend mirrors what occurred in the early 2000s when major marketplaces like Craigslist paved the way for specialized projects.
In this article, we aim to explore why we expect such a development shift and how it impacts the experiences of crypto users.
Wallet’s function
To better understand, let us first look at what crypto wallets actually do.
- Reading: Wallets gather machine-readable information related to your public key on a blockchain and present it in a human-readable format. Such information includes recent transactions, asset balances, and maybe position assets in DeFi protocols.
- Writing: By holding your private key, wallets allow you to send assets or interact with protocols. The transaction prompts from protocols are displayed to you through the wallet, and you sign and send the transaction to the blockchain from the wallet.
Distribution of personas
During Ethereum's early days, tokenization was restricted to specific asset classes, such as fungible tokens. However, with the emergence of new asset classes like NFTs and SBTs, the token landscape has expanded significantly.
It created new communities with their own jargon around those new asset classes with their specific protocols. For example:
- A DeFi user may primarily engage with protocols like Uniswap, Compound, and Aave, dealing with terms such as yield, profit, and liquidity.
- An NFT user may be more involved with protocols like OpenSea and Foundation, dealing with terms such as floor price, trait, and edition.
Tribalizing assets creates significant challenges for general-purpose wallets like Metamask or Trust Wallet. To maintain broad support, wallets are forced to compromise the user experience at both the reading and writing levels.
At the reading level, they either overlook features specific to certain asset classes or implement them generically, due to technical constraints or conflicting user preferences. For instance, historical performance for all asset classes may not be displayed due to resource intensity. Or, NFT enthusiasts may not be interested in seeing DeFi-specific information.
At the writing level, the experience compromise due to prioritizing broader protocol access could lower interaction efficiency. For instance, the MetaMask mobile wallet uses an in-app web browser to enable interactions between users and protocols. Despite offering this broader access, interacting with web pages from mobile often results in a laggy and cumbersome experience.
Moving Toward Efficiency
It is clear now that we need to design use-case-specific wallets. Due to their limited scope, these wallets can provide a deeper and more optimized experience to users of a particular vertical, ultimately enhancing the efficiency of their activities.
Some might think that limited functionality leads to limited access, but this is not the case. Verticalization means removing unnecessary access to provide a deep experience in a specific use case.
There is a chance to further deepen the experience from verticalization by curating the vertical itself. It means, among thousands of protocols emerging every day, you would only need a handful of the top ones to interact with.
Oncahin data shows that nearly 60% of TVL in DeFi is concentrated in protocols like Lido, Aave, Maker, and Uniswap. This means that you can maximize your DeFi interaction efficiency by smoothly and efficiently interacting only with these few protocols.
Following The Narrative
Our initial product is a DeFi-specific mobile wallet, providing an abstracted and intuitive environment for seamless interaction with the DeFi space. This simplifies entry into the mainstream DeFi and enables enjoying its benefits via a mobile app.
It is just around the corner, so stay tuned for future announcements.