Wallet providers emphasize security as top hurdle to overcome

OKX, Phantom and Braavos execs chatted about the future of crypto wallets and more importantly, what needs to change for success to happen

article-image

epic_images/Shutterstock modified by Blockworks

share

Crypto wallets are becoming an even bigger entry point for new users than centralized exchanges. 

That’s according to Phantom co-Founder and CEO Brandon Millman who spoke Monday at the Permissionless conference in Austin, Texas.

And that’s why the phrase that anyone who’s been paying attention to crypto for half a minute has come across — “how do we onboard the next billion users” — is fundamentally flawed in Millman’s view.

“The space really needs to focus on…retention of users, and not actually trying to onboard all these net new users,” Millman said. “It doesn’t matter if you onboard a billion users if your retention is zero, because then you end up with no users.”

Having good security in place is the first step toward getting people to stick around. That’s because if they fall victim to a phishing scheme, it makes it dramatically less likely for them to persist in crypto.

However, the assembled panelists seemed eager to move away from seed phrases, a security measure that’s so rigid it can lock the end user out of their account. 

Look no further than Stefan Thomas, a programmer who has hundreds of millions of dollars worth of bitcoin trapped in a wallet to which he lost the password.

Braavos co-founder and CEO Motty Lavie went as far as to say that seed phrases are “almost the root of all evil.”

Braavos, a smart contract wallet, uses two-factor authentication, biometric authentication and a seed phrase, widening the ways users can access their assets. This, essentially, is a form of account abstraction, which can allow users to recover their funds in the event of losing their seed phrase. 

A subsequent panel weighed the evolution of account abstraction and its benefits — chief among them being gasless payments. 

Stackup co-founder and CEO John Rising described gas payments as a “huge barrier of entry that has now been knocked down by smart accounts” and paymasters.

“A paymaster is an entity that exists on-chain that can basically sponsor transactions for people. So if you have a marketplace, and you want creators to publish things to your marketplace, you can effectively pay for gas for that,” Rising said.

Still, even if account abstraction became the norm, panelists said crypto wallets would need to evolve to handle customer issues in a more standard manner. 

As Lavie put it, people will inevitably make mistakes. They’ll click on links they shouldn’t click on and they’ll transfer funds they shouldn’t have transferred. 

Read more: Researchers flag security concern for users of certain crypto wallets

Millman and fellow panelist Jason Lau, OKX’s chief innovation officer, emphasized that providing customer support through standard, time-tested systems is the way to go. 

“For some reason, crypto and Web3 don’t really take much inspiration from all of the customer support techniques that have been developed over many decades on Web2 and instead opt for sending people into a Discord channel,” Millman said. 


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Monad Report Graphic.png

Research

Monad represents an ambitious attempt to address the scalability challenges faced by existing EVM chains. By leveraging innovative consensus and execution mechanisms, including pipelined consensus-execution and optimistic parallel execution, Monad aims to achieve performance metrics of 10,000 TPS and 1-second finality while maintaining full EVM compatibility. This approach positions Monad as a potential evolution of the Ethereum ecosystem, offering enhanced scalability without sacrificing the familiar developer or user experience.

article-image

Bitwise took the initial steps for an XRP ETF Wednesday

article-image

Plus, enrollment for the Donald Trump-backed crypto project is underway

article-image

On Solana so far, there are two main competitors: Jito and Solayer

article-image

Plus, Sui-eet liquidity surge and USDC’s new home on Base

article-image

The Web3 community is stacking bricks when it should be building bridges