Smart wallets have been developing rapidly. Here are several things that are required for them to go mainstream. 

From inside the crypto industry, it is clear that smart wallets are developing very quickly. When I first tried Argent, arguably a smart wallet due to multi-sig functionality, a few years back, I had to pay over US$200 to set it up. Gas fees were high and we were clearly in ETH-to-the-moon euphoria. Obviously, a normal human being is not going to pay $200 for a smart wallet, so a lot of work has to be done.

And so it was done. 

Smart wallets and major crypto activity migrated to L2s, becoming faster and more reliable. It is now possible to transact for 1 cent when the same transaction a few years back would cost $100, a very solid 10,000x improvement! With various improvements such as EIP-3074 for gas sponsorship, and many others, wallets became even more seamless and easier to use. That’s the technology we employ at Moai as well — making the wallet truly free to use, where the transaction fees are covered, and implementing various safety features that make onboarding about 10x faster than when you had to write down the seed phrase before you’d even know what you need it for.

But even more needs to be done.

Traditional (and I mean leather and textile here) wallets in themselves are quite dumb invention. A traditional wallet carries money, cards, or photographs (are these NFTs?!) and protects them from the elements, but does nothing beyond that. A smart wallet can and should do a lot more, because it is programmable in nature. I put these features in three broad categories: Opportunities, Social Recovery, and Protection.

Opportunities. A smart wallet should do more than just store money or be able to swap tokens. It should nudge you intelligently if the token you are holding is ripping or tanking, whether your USDC sitting idle can earn you some interest in liquid staking (or better yet just do it automatically if permitted… free money!), provide the option to participate in prediction markets, staking, and more, and overall help you grow your capital or invest it, wisely or unwisely, with your permission. Imagine a wallet that can employ an AI agent to take a portion of your portfolio to buy Base memecoins with specific parameters. If your risk is low, maybe you can allocate 5% of capital to this. If you are adventurous, increase allocation higher. Same with vaulting prized assets. If there are some assets that appreciated considerably, a smart wallet can automatically move them to your designated cold storage. 

Social Recovery. This has been talked about for many years by many, including by Vitalik in his recent post, but basically, accidents happen. It is important your wallet can be recovered and protected, with some social interaction. Maybe even between your crypto friends — i.e. if you swap or share money with certain people over and over again (real people, your other wallets), several of them can form a weak bond that can vouch for you to recover access if lost. Weak bond would mean that if you send money to one wallet, this wallet cannot singlehandedly sign a transaction to lock/unlock the wallet, but a group of several such parties can nudge a wallet in the right direction. Specific parameters can be set for people who are highly technical, and “easy mode” can be implemented for most.

Protection. Lastly, it’s not a secret that the way blockchain is designed is becoming untenable for many. The ability to spike tokens or NFTs to with malicious code makes transacting with them dangerous or being able to see every single transaction should be considered a bug. Privacy and provenance should go hand in hand. While various blockchain foundations are reworking the basics, the smart wallets can help temporarily by providing protection. For well-known malicious tokens, these should be isolated and removed from a wallet (many are already doing that part), for the spammy tokens, i.e. the ones that many active users are airdropped, while there are no protections on a blockchain level, these should be sent to “trash” addresses. Same for NFTs, anything that you didn’t ask for should be sent back, preferably with a note “don’t ever send this again”, and a smart wallet can have several levels of action that can be taken to protect the tidiness and integrity of a wallet. 

Some of these measures might take weeks to develop, some months. Some ideally require foundational blockchain changes, such as moving to zero-knowledge proofs or mixers being built right into every transaction, which might take years at the current stage. However, safe, secure, and smart wallets will make people richer and their lives easier and more fulfilling.