MetaMask And The Fight For The Crypto Wallet Throne In The Web3 Arena
Introduction
In discovering what the new, permissionless and trustless web – aka Web3 – has to offer, there’s only one thing you can’t do without: a self-custodial wallet.
Those who have already ventured into this world will surely have already heard of MetaMask, the game-changer which has been able to establish itself not only as a leader, but as a true monopolist in the market.
Over the last few years, though, many competitors entered the scene, striving to gain ground with continuous efforts to improve and simplify the user experience.
It is then fair to ask, will MetaMask really be able to maintain the status it has achieved?
What are self-custodial wallets
With Web2, all of our data was centralized and controlled by the so-called tech giants. Web3 overcomes this paradigm by envisioning a new internet where users have full control over their assets and move into an alternative economy owned by builders and users, orchestrated through the use of tokens.
The gateway to this new world is non-custodial wallets, whose name comes from the ability to store digital assets securely and without the involvement of third parties, thus preserving privacy without the need to complete daunting KYC/AML procedures.
This is made possible by the user’s self-custody of the private key, required to sign and authorize all transactions. “Not your keys, not your crypto”, as the saying goes.
To summarize, we could say that, just as browsers became the window into Web2, these wallets are the interface to today’s decentralized Internet.
The MetaMask revolution
In this framework, MetaMask represented a real revolution.
Launched in 2016 by ConsenSys – leading Ethereum software company focused on building decentralized tools and infrastructure on the network – MetaMask was the first wallet available as a browser extension, bringing extreme simplification in the whole process.
With a few clicks, users could create their own wallet, store their assets and communicate with the major dApps built on the Ethereum network. All of this through a simple, intuitive interface.
Over the years, MetaMask has made numerous improvements, such as the possibility to swap tokens directly from the wallet.
Today, MetaMask is available as both a browser extension and mobile app and can connect to any Ethereum-compatible network, granting its users access to the vast majority of dApps and Web3 services. In addition, MetaMask not only supports ETH-based tokens, but also NFTs, collectibles and any other digital asset issued on the Ethereum blockchain.
The recent news of the acquisition of MyCrypto by ConsenSys suggests further upgrades are coming in the near future. Lastly, it seems that ConsenSys is now seeking to leverage NFTs as a way to onboard new users into Metamask, exploring their financial applications such as collateralization, fractionalization, swapping, borrowing and lending.
In a nutshell, MetaMask represents one of the simplest yet most secure ways to connect to dApps, as well as a product in continuous evolution.
First the rise of DeFi and then the NFT boom just did the rest, leading MetaMask to an astonishing exponential growth.
MetaMask in numbers
As we’ve pointed out, MetaMask is by far the most popular amongst the several wallet services available on the scene, counting over 21 million Monthly Active Users (MAU), meaning unique wallets (not the individual accounts within the wallet) – an increase of 38 times since 2020!
In addition, in a recent interview by Real Vision, Jacob Cantele, lead operator of MetaMask at ConsenSys, disclosed that this number has been growing in the range of 20% to 40% per month on average.
Other significant metrics are the ones linked to the swap feature, which was introduced by ConsenSys on October 6th, 2020.
Based on the data from Dune Analytics, at the date of writing there have been 3.8 million swaps, for a total of $16.7 billion volume exchanged by 1 million of unique accounts.
The charts below show the daily records:
According to MetaMask’s official website, “a service fee of 0.875% is automatically factored into each quote”. Hence, by multiplying this percentage with the volumes it is possible to calculate the revenue generated by the wallet.
As shown in the chart below, as of today cumulative fees amount to almost $316 million, with an average daily fee revenue of about $1.3 million in the last six months.
Just to give a comparison, while MetaMask shows $325 million revenue, revenue of the two main DEXes on Ethereum SushiSwap and Curve amount respectively to about $82 million and $17 million.
The contenders for the throne
The numbers are certainly impressive, but as we’ve previously mentioned MetaMask is not the only player in the game.
- The multi-chain Blockchain.com wallet counts more than 81 million wallets created worldwide. This chart from Statista showing the number of its users worldwide is just impressive, an indication that Metamask was not the only one to experience exponential growth:
- There are more than 25 million people all across the world using Trust Wallet, Binance’s official multi-chain mobile wallet.
- With over 4k tokens and a huge variety of dApps supported, Coinbase Wallet records 711k average monthly downloads of its Google Play app worldwide (source: SimilarWeb), while the Google Chrome browser extension of the wallet has been downloaded by more than 800k users.
- Available both as an app and Google Chrome extension, the ERC20 token-focused MyEtherWallet records an average of 1.3 million monthly users.
In short, there’s tons of fish in the water and as the crypto adoption continues, blockchain wallet users continue to grow.
A focus on XDEFI Wallet
But among all, there’s been a new entrant who really stood out in the scene, raising $19 million in its IDO last December, with a valuation of $150 million. We are talking about XDEFI Wallet.
Initially incubated by THORChain in August 2020 and backed by leading investors of the space, XDEFI is probably the world’s fastest chain-agnostic DeFi and NFT wallet, with a web browser extension and mobile app simultaneously serving multiple blockchains and offering exclusive features.
Let’s see the major ones and find out the main differences from the MetaMask offering.
Chain agnostic wallet
With XDEFI, users can manage their token on multiple chains. MetaMask itself supports several chains, but XDEFI takes it one step further, adding non-EVM compatible chains.
With many more to come in 2022, here’s a list of the chains currently supported by the wallet:
- Bitcoin
- Ethereum
- Polygon
- Binance Smart Chain
- Terra
- THORChain
- Litecoin
- Bitcoin Cash
These past years have made it clear that the future will be multi-chain, that’s why it’s crucial for users not to be afraid of moving into this tangle of chains.
By leveraging THORChain, EVM bridges, and other solutions, XDEFI provides users the simplest experience in swapping tokens, without the need of several steps on third-party platforms. Users will therefore be able to autonomously manage their digital assets and keep them all under control from one single wallet. That’s a huge difference from the EVM-only MetaMask, in which users owning non-ethereum-compatible tokens need to manage several crypto wallets at a time (Terra Station for Terra blockchain, Phantom wallet for Solana, Keplr Wallet for Cosmos, etc.).
If we consider that Phantom wallet alone counts more than 1.8 million monthly active users, while the Google Chrome extensions of Keplr and Terra Station have been downloaded by more than 400k and 500k users respectively, it is not difficult to imagine the potential growth that such a wallet can present.
Should it not seem enough, fees charged by XDEFI on swaps are 0.25% the amount, on top of the applicable network fee. Not bad if compared to MetaMask’s 0.875%!
Wallet with a token
The presence of a token is definitely the most substantial difference.
MetaMask users have been waiting for the release of a token for a long time and over the years there have been many rumors about it. We are pretty sure that this upgrade will come sooner or later, however, for the time being, XDEFI seems again to be a step further.
XDEFI’s token ($XDEFI) is an ERC-20 token designed by Delphi Digital, by far the most popular tokenomics researchers in the industry.
$XDEFI allows users to receive a share of the revenue coming from in-wallet swaps, participate in the governance, fund projects and play to learn. More information can be found here.
Thanks to all these features, the typical Web3 business model is therefore implemented, where revenue is redistributed among the token holders and there’s a virtuous circle benefiting the whole community.
In light of all this, it is clear that in terms of token strategy XDEFI shows a major advantage over Metamask.
For sake of completeness, it is worth mentioning that XDEFI is not the only crypto wallet that comes with its own token. Among the ones we’ve mentioned, Trust Wallet also has its own ($TWT), which may be considered partially comparable in terms of market cap ($168 million against $XDEFI’s $36 million), but the key difference is that $TWT is just a governance token.
Designed for NFTs
XDEFI stated that “Blockchain wallets will be the Instagram of NFTs in the near future”.
Users can view and manage their NFTs directly by a single display in their wallet, with many NFT-linked features to be implemented in the next months.
With the NFT mass adoption witnessed over the past year, we believe that this feature represents a real gem.
Conclusions
In building an open, trustless and privacy-focused financial system, the “be your own bank” paradigm brought by Web3 inevitably comes with quite a few challenges for users.
Asset-management tools such as wallets must therefore keep their focus on the user experience, constantly monitoring their needs and desires.
In the current arena, characterized by an increasingly tough competition, XDEFI seems to have accomplished that, identifying the shortcomings of the Red Fox and entering the market with an innovative proposal in terms of usability and multi-chain capabilities.
During the past two years, the number of unique crypto wallets increased at a rate of around 20 million per year, making the count stand at around 80 million today.
MetaMask’s amazing performance continues to grow steadily and although seeing other wallets reaching these numbers might seem impossible, we must consider that in terms of mass adoption it’s still early days.
In a dynamic and ever-changing market like crypto, monopolists should always keep in mind that things can turn around very quickly.
Iconium Team