The Development of the Web3 World and the Evolution of Wallets

The emergence of smart contracts has ignited people's imagination for building a world computer. This has been followed by a surge of DApps covering various fields such as trading, lending, gaming, and NFTs. The security of blockchain and the convenience of smart contracts have made on-chain development simpler than ever, and various DApps can also be combined through smart contracts.

As of August 2022, the number of DApps on various public chains has exceeded 4000, and it continues to grow at a rate of dozens each month.

The address is the basic unit for users to interact with smart contracts. On-chain addresses have the characteristic of complete anonymity, requiring no KYC, allowing users to create and operate multiple addresses. Having an on-chain address signifies a true entry into the new world of cryptocurrency. According to official Ethereum data, as of August 2022, the cumulative number of addresses has exceeded 200 million, with a daily transaction volume of over 1 million.

Blockchain and smart contracts empower users with the ability to truly manage their own data and assets, which is also the core feature of Web3. The Wallet is a key tool for achieving this management. Just as a browser is the gateway to the internet, the Wallet can be seen as the portal to the Web3 world. As the infrastructure of the crypto world, the Wallet encompasses all on-chain asset and data-related operations, including transactions, holding, transfers of cryptocurrencies, as well as staking and other derivative operations.

From a historical development perspective, wallets can be roughly divided into paper wallets/brain wallets, hardware wallets, software wallets, and other key custody solutions. For most users participating in DeFi, NFT trading, and gaming, software wallets are the most commonly used option. Taking the currently most popular software wallet as an example, its monthly active users exceed 30 million. After users install the wallet, they will receive a string of mnemonic phrases consisting of 12 or 24 ordered English words, where a set of mnemonic phrases can correspond to the private keys of multiple addresses, used for account recovery and migration.

For new users in the crypto space, securely storing the mnemonic phrase is the crucial first lesson. One of the costs of decentralization is that users must take full responsibility for their accounts and Wallets, as no centralized institution can help "recover passwords." Once the mnemonic phrase is leaked, the user's Wallet may be controlled by others. After becoming familiar with the secure operation of Wallets, users can officially step into the vast world of Web3.

How do we define a "high-quality" Wallet among the many soft Wallets? We can explore the Wallet features that best meet user needs from the current trends and hotspots in the cryptocurrency world.

The Rise of Multi-Chain Ecosystem: From Dominance of One to Coexistence of Many

The DeFi boom in 2020 attracted a large amount of capital into on-chain financial activities such as liquidity mining and arbitrage, while the rise of GameFi in 2021 further expanded the crypto user base. Ethereum sacrificed speed while ensuring decentralization and security, and the surge in computational demands also led to skyrocketing transaction fees, making the trading costs unbearable for small users. In order to reduce user costs and improve speed, multiple public chains rapidly emerged against this backdrop, changing the landscape of Ethereum's dominance.

From Ethereum-based L2 solutions to exchange-dominated public chains, and various emerging public chains compatible with EVM. Although many innovative DApps were initially based on Ethereum, the compatibility of EVM has made cross-chain migration relatively easy. According to data statistics, as of August 21, 2022, the top five public chains by the number of active addresses in the past seven days are BNB Chain, Ethereum, Polygon, Ronin, and Avalanche, with BNB Chain having 2.94 million active addresses due to its game-friendly nature.

In terms of total value locked (TVL) in DeFi, Ethereum remains the absolute leader, accounting for over half of the total TVL across all chains, but this share is gradually declining. A situation of multiple strong players has emerged, and users hope to conveniently manage their multi-chain assets and achieve cross-chain operations.

Staking Becomes Mainstream: From POW to POS

The POW consensus mechanism of Bitcoin has faced criticism for resource wastage since its inception. To address this issue, POS was innovatively proposed and quickly became the mainstream choice for major new public chains. Ethereum will also complete its transition to POS in September 2022, known as ETH 2.0. Ordinary users can participate by staking a small amount of tokens through DPOS (Delegated POS) or SaaS (Staking-as-a-Service) platforms, without the need to stake a large amount of tokens to become validators.

Staking is becoming the most convenient way for ordinary users to enter new public chains. While users participate in staking to ensure the secure operation of the blockchain, they also receive staking rewards. Therefore, the security and experience of staking are also important factors for users when choosing a new POS public chain.

One-stop entry: Keep up with the rapid development of Web3

Despite the dazzling array of DeFi applications, DeFi is just one application scenario in the vast Web3 world. DAOs, games, the metaverse, and more scenarios yet to be imagined and created will collectively shape the blueprint for the future of Web3. Today, more than 50 years after the birth of the internet, few industries can continuously emerge with exciting knowledge, technology, and demands like Web3, making one marvel at the rapid development of Web3.

In the Web3 era, the traditional "logging in with various social accounts" will be entirely replaced by Wallet login. It can be said that Wallet is the primary gateway to the Web3 world. In the face of the rapidly changing Web3 industry, users need a one-stop Wallet that can directly explore and use DApps.

Build a one-stop super application for Web3

In summary, we have identified the demand for high-quality Wallets among users from the current market hotspots, namely a seamless experience across multiple chains, convenient staking channels, and exploration of the Web3 world. Some Wallets on the market not only meet these needs but also feature exquisite UI interfaces. Such Wallets typically support basic functions like fiat deposits from mainstream Wallets, importing Wallets, connecting hardware Wallets, and displaying asset prices.

Multi-chain Asset Management

Users can choose to create a new Wallet or import an existing Wallet, and they can also choose to observe others' addresses. Importing a Wallet only requires selecting the original Wallet and pasting the mnemonic phrase. To ensure the highest level of security, some Wallets also support hardware Wallet connections, ensuring that private keys remain offline and secure.

After entering the Wallet account, users can view multi-chain assets, ENS domains, and directly access staking and multiple DApp entries. Some advanced wallets support over 25 public chains, including EVM chains such as Ethereum, Avalanche, and BNB Chain, non-EVM chains such as Solana, Near, and Cosmos, as well as L2 solutions like Polygon, Arbitrum, Optimism, and StarkNet.

Some wallets support NFTs on Ethereum, Polygon, Avalanche, Binance, Fantom, Solana, and Arbitrum, with continued support being added. Users can view all NFTs in one place and set their favorite NFTs as the home screen background.

Some wallets collaborate with third parties to support the direct purchase of cryptocurrency using debit and credit cards. For multi-chain wallets, native cross-chain bridge support is also necessary. Users can utilize the native cross-chain asset conversion feature, including conversions between different EVMs and non-EVMs.

The advanced Wallet also provides price monitoring features for various cryptocurrencies, including native assets such as AVAX, BNB, ATOM, and MATIC, as well as staking tokens like stETH and stMATIC, and even integration with some yield aggregators. All operations can be performed directly on the Wallet's home page with just a few clicks.

Simplified Staking and Yield Aggregation

Some wallets are known for their simplified staking features, greatly simplifying the process for both newcomers unfamiliar with the staking concept and DeFi veterans. Users can complete staking operations directly within the wallet without having to access other protocols or DApps.

Taking ETH staking on a certain protocol as an example, users only need to click the corresponding option, decide the amount of ETH to stake, review the transaction, and confirm. The whole process is fast and simple, without needing to leave the Wallet to access other DApps.

This simplified staking feature is applicable to over 15 public chain assets, and users can also invest regularly through different validators. Some wallets also collaborate with specific protocols to support various staking tokens.

Some wallets natively support yield aggregators for vaults on different chains, allowing users to easily obtain yield-optimized strategies. Compared to the cumbersome steps of accessing the yield aggregator's website, finding the vault, connecting the wallet, etc., in these wallets, users can directly obtain yields with just a few clicks.

Explore the Web3 World

The advanced Wallet provides users with a comprehensive window to understand the different supported ecosystems, including the latest updates, news, native integrations for specific ecosystems, and choices of DApps across various industries.

The exploration page is typically divided into several sections:

1. Overview

   • Latest Update
   • Weekly special topics, focusing on a series of themes in Web3
   • Weekly General News
   • Top DApps Collection (such as major DeFi DApps, top NFT platforms and marketplaces, etc.)

2. Ecosystem Part

   • Latest news covering specific ecosystems
   • Local integration of protocols in the ecosystem
   • Top DApps categorized by industry in the ecosystem (such as lending, DEXs, GameFi, yield aggregators, etc.)

With this design, users can directly understand and explore various aspects of Web3 within the Wallet, providing convenience for further participation.