Jan 25, 2023

Web3's Wallet Problem

Whether you’re new to the world of Web3 or just getting started, there’s no doubt that you’ve encountered The Wallet Problem.

What is The Wallet Problem?

The Wallet Problem is one of the fundamental reasons why crypto, blockchain, and the Web3 ecosystem as a whole have struggled to reach mass adoption.

Put simply? Crypto wallets stink. The user experience sucks. And the fact of the matter is, few users want to install new software, let alone manage 12-word seed phrases or private keys. While early adopters were willing to overcome such hurdles and generally cumbersome UX, most internet users today are entirely uninterested in sacrificing convenience, even for additional security, privacy, and transparency.

An Unfortunate Reality

To illustrate, let’s visit the story of a real Web3 user. We’ll call her Alice.

One day, Alice’s friend convinces her to check out a dApp that has recently generated some buzz. It sounds interesting to her, but she’s never ventured beyond buying Bitcoin on Coinbase that one time three years ago. She quickly discovers that she needs to connect a wallet in order to use the dApp. Confused by the lack of a Sign Up button, she warily clicks the “Connect Wallet” button at the top right. She’s presented with 5 different wallet options, each of which requires her to install a browser extension. She has no idea which to choose.

At this point, Alice is slightly annoyed. She’s accustomed to signing in with her Google account or in some cases, an email and password. Persistent as she is, she decides to pick the first option, Metamask. As she proceeds through the setup process, she’s introduced to the concept of a “seed phrase.” The tutorial regularly reminds her about how important this phrase is and how she must go through extensive lengths to secure it. She also reads that she will never be able to recover her account if she loses it.

Alice’s annoyance turns into apprehension.

But she remains determined to try this dApp, so she continues. She eventually makes her way through the wallet tutorial and successfully connects her wallet. Her excitement is abruptly cut short. The dApp tells her that she’s on the wrong network and that she must switch networks. Alice clicks the button to kick off the network switch, and at last, it appears she is done. Feeling accomplished, she begins to explore what the dApp has to offer. But she can’t do much.

The dApp instructs her to deposit XCoin in order to get started. She clicks the link labeled “How to buy XCoin” and arrives at a step-by-step tutorial. The guide tells her that she needs to buy YCoin first before swapping it for XCoin and then bridging it to the correct chain.

It has now been 30 minutes since she initially began trying to use the dApp.

Alice feels exhausted and frustrated.

Problems for All

The experience for users is clumsy, foreign, and time consuming, and one that so many have to endure before they might get a taste of what makes decentralization powerful. Most don’t even get that far.

You may be under the impression that perhaps The Wallet Problem is a result of developers building what is convenient or easy, but to the contrary, it’s there for them as well. Wallets are frustrating for developers as they must painstakingly add support for each individual wallet and continue to manually support as each wallet updates and changes. It draws effort and attention away from creating the best possible product and experience for the user.

The problem is exacerbated when a dApp attempts to go cross-platform. Mobile and web wallet usage patterns are entirely disparate. In order to provide a consistent experience on each platform, developers often need to sacrifice which wallets they choose to support.

The Way Forward

As we’ve seen in recent years, the “crypto revolution” has made little impact on our day-to-day lives. And although cryptocurrencies and blockchains have undoubtedly cracked into the modern zeitgeist by way of promises of fortune, true adoption of the applications that unlock the potential and value of decentralized technology will never take off so long as The Wallet Problem exists.

If Web3 technology hopes to garner mass appeal, it must embrace a gradual and blended transition from Web 2.0.

Removing Friction

While Web 2.0 is flawed in its own right, its centralized nature enables it to excel at providing users with convenience and usability.

Projects today are already providing ways to deliver wallets with the convenience of Web 2.0. Web3Auth, for example, provides users with familiar options to authenticate with, such as Google, Facebook, and Apple SSO, while also securely generating non-custodial wallets for their accounts. In doing so, users seamlessly gain access to a wallet of their own without worrying about seed phrases or additional downloads.

The value presented by this experience is undeniable: dApps can quickly onboard the next wave of Web3 users, and users are met with a familiar experience that provides them with a wallet that they wholy own and can immediately use.

Read more about how Web3Auth ensures wallet keys are secure and private here.

Joining the Solution

For Frontrunner, the switch from native wallet support to Web3Auth was instrumental to making iOS and Android mobile apps possible. It trivialized the otherwise impossible task of allowing users to sign transactions on the Injective chain and removed the need for users to download multiple apps in order to use ours. Unlike native wallets, with which users would need to go to the wallet app to connect their wallet and sign transactions, Web3Auth allows us to provide a familiar experience while minimizing friction. We hope that Frontrunner will be a major player in attracting new users to the world of Web3, and we believe that simplifying the wallet management process for our users is an important step.

About Frontrunner

Frontrunner is a decentralized sports prediction market where users can buy shares of sports propositions and trade them like they would stocks. Unlike traditional sportsbooks where users place a bet and wait, Frontrunner gives users full control over their portfolios, allowing them to dynamically buy and sell positions as the odds change. By leveraging the power of free markets and the blockchain, we create transparent markets and liquid positions to reduce counterparty risk and fundamentally change the way that people invest in their sports knowledge and beliefs.

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