For the first time in crypto, there is a clear path to hundreds of millions of monthly transacting users.
It won’t happen for any of the hardcore crypto reasons like “democratizing finance” or “decentralization”.
It will happen because the upcoming crypto UX is 10x better than web2.
Current web2 UX is actually horrible - we are just used to it. We all have 30 different financial app accounts, wait days for bank transfers to clear, hunt for and paste email confirmation codes, rebuild our social graph in each new app, and generally grind our way through the Internet.
It’s as if we are calling a taxi dispatcher, hoping the taxi shows up, and then awkwardly paying afterwards in the middle of traffic, but soon we will be able to just tap a button on our phone. The crypto tools coming online now make the Internet so much more usable that people will demand this new level of user experience from apps, even if they never know it’s crypto under the hood.
Near-instant, low-gas L2s are an obvious level-up. But there are four more unlocks that will push us well over the threshold of “better than web2”:
Passkeys are passwords or private keys that you don’t have to remember, can’t be stolen, and don’t have to be typed in. They are easy to create, are stored securely on your devices and cloud backups, and can be called back up later to sign messages or transactions easily using your device’s PIN or biometrics. Amazon, Google, LinkedIn, Shopify, Uber, and more all support passkeys now.
Web wallets are “cross-app embedded wallets”, a phrase coined by the
With smart contract accounts and paymasters, gas will often be abstracted away, multistep transactions will be bundled up into one, and account recovery will be much more user-friendly. Users will be able to grant very constrained permissions (“session keys”) to specific apps to transact for them (like they give some apps the ability to tweet for them) so transactions can be one click with no confirmation pop up.
Like the promise of the original social apps, new social protocols like Farcaster are creating unruggable social graphs tied to users’ onchain addresses. This means any app that is aware of your address can build a personalized and social experience for you, as soon as you sign up.
For the next Friend.tech, Nikita Bier special, or Airchat, you’ll “Sign in with [Coinbase / Capsule / MetaMask / Binance / etc]” as easily as you sign in with Apple or Google.
There won’t be 24-word backup phrases, wallet app downloads, or broken WalletConnect flows. There won’t be any “input the 6 digit code we emailed you” or typing in 4 different passwords for your Google account until you get the right one. It’ll be a simple confirmation using a passkey - even easier than today’s standard SSO flow.
Immediately when you enter, the app will be personalized to you, pulling in your onchain history and your social graph. Gone will be the days of dark patterns pushing users to share their contacts - your friends will already be there.
You won’t need to wait 72 hours for your ACH transfer to hit the next Robinhood app. You won’t need to transcribe your credit card. You won’t need to copy and paste your new app-specific address into your other wallet to transfer funds. Your funds will already be accessible via your web wallet.
You’ll go from no Bracket.Game account to betting on the same sports teams as your friends in 30 seconds instead of 3 days. Visit-to-activation rates will go from 1% to north of 10%. Product managers everywhere will rejoice.
Crypto wins because it makes the Internet more usable, and every web2 app will be forced to adapt. Finally, we’ll all have a rational answer to “why build this on crypto?”.
P.S. What this means for you:
Exchanges must reinvent themselves onchain to keep up, creating web wallets for their userbases. See Coinbase Smart Wallet as an example (choose the blue “Create a wallet” button instead of “I already have a wallet” when prompted).
Wallet apps that want to appeal to the mass market should add a web wallet offering.
Embedded wallet providers should offer cross-app experiences, like Capsule today, Dynamic’s upcoming global wallet, or Privy’s upcoming global wallet.
Apps should stop trying to recreate their own social graphs and use Farcaster.
In this cross-app address-aware world, acquiring users will be more efficient with affiliate programs like GMX’s and Lido’s, and dapp creators would be wise to add their own or use providers like Spindl and Fuul.
Thank you to Nitya Subramanian, Wilson Cusack, Noam Hurwitz, Itai Turbahn, Bobby Thakkar, and Morley Zhi for feedback on this article.
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Kyle McCollom
Great article ! It is exactly what we're doing with Nexus. @kyle please give me your feedback on nexus.frak.id
I love the "one address >>> 200 embedded addresses" narrative going around right now. Wrote about this back in April:
Full article: https://paragraph.xyz/@kyle/crypto-will-10x-internet-ux
I'd say 100x actually. Great article!
This would make things easier
I despise embedded wallets with a passion lmao
Is this frentech also farcasters client?
Simplified reasoning on why passkey-based web wallets will win: - Builders will prefer it because their activation rates will skyrocket. - Users will prefer it because it's significantly easier.
Well said 🙌 I’d wish for sooner rather than later 😊 777 $degen
How does backup and recovery work with passkey based wallets?
Passkeys can be saved to iCloud or 1Password - recovery is very easy. You will be able to add additional signers over time to your web wallet.
Really varies by provider! /capsule has a non-passkey based backup in case you clear storage or lose your phone, but in some cases unfortunately you’ll lose the wallet
that's quite the vison for a craved new onchain world. How long to gain traction, do you think?
A while. We need more web wallet providers and a ton of funded wallet accounts. https://paragraph.xyz/@kyle/crypto-will-10x-internet-ux
I DON’T THINK ENOUGH OF YOU REALIZE HOW HUGE THIS IS. Stop what you are doing and grok how much the internet changes because of passkey-based web wallets. Think about how your product needs to change. Think about how your defensibility changes. Think about what this unlocks for you.
How to think about it: https://paragraph.xyz/@kyle/crypto-will-10x-internet-ux
This is such an exciting technology. Plans are in motion on Passkeys for the polkadot parachain frequency.
just got so stuck in the loop trying to mint the One of Wun Coinbase NFT saw on x > x browser > open in safari > mint > have a wallet > no, make a new one > create "smart" wallet > no eth > swap on coinbase > auth > open coinbase retail app > stuck > retry > same loop > quit 🥵 let me use dawn in safari man
okay worked fine w rabby on desktop lol 👍 https://wallet.coinbase.com/nft/mint/eip155:8453:erc1155:0x71fB5C4f01564491Ba35eC7844157507642FfC38:0
No
are u the pm at cbw :|
The implication that I'm not is honestly a little offensive
1. Creating that wallet was 10x easier than any other wallet creation. 2. Yes - you have to create a new wallet, but this is for offchain users today. 3. Funding a wallet is still hard, yes. But you just have to do it once at first with a cross-app web wallet vs every time with silo’d embedded wallet.
agree with all of these although i still experience issues w passkeys sometimes - like they don’t work or save right or something my google passkeys never work lol
Makes sense - passkey UX will improve in the coming couple years, too. See Apple's newly announced password product.
You as a crypto native don’t want to create a new wallet, but I bet you will switch in ~2 years bc the UX will be so good. Channel your inner newbie and squint to see how good this flow will be relative to wallets as they are today. https://warpcast.com/kyle/0x4ac81454
yes - i wasn’t disagreeing just legit asking bc i forgot why u like them so much lol yes i am married to my onchain history are there any other smart wallets besides CBSW rn? i can’t stand CBW
woah .. too many things to do before to mint
Fun thought experiment lately: Now that a passkey-based web wallet (CB Smart Wallet) is live, what new app ideas will take off? What will merit a CB exchange user coming onchain? What will your offchain friend get pulled in by?
To inspire your ideas: https://paragraph.xyz/@kyle/crypto-will-10x-internet-ux
gunna
Money making opportunities or digital innovation