MetaMask is a well-deserved crypto hero

If you only have a few minutes of free time, here is what investors, operators and founders can learn about MetaMask.

  • Crypto wallets are no longer a niche market. Three years ago, there were 31 million crypto wallet users; today, there are nearly 80 million. Although there is still a long way to go to fully realize the potential of web3, products like MetaMask are far from esoteric. It alone has 21 million users.
  • MetaMask is a big business. In 2021, the company’s revenue exceeded US$200 million. This is thanks to its “exchange” feature, which allows users to exchange their cryptocurrency without leaving the product. 
  • Consumers have different expectations. Clients like MetaMask are built for developers. Given the origin of encryption, this makes sense, but as consumers with lower technical content begin to get involved in web3, the design premium is higher.
  • Building defensiveness is tricky. Because encrypted wallets extract data from the blockchain, there is no user lock-in. Within minutes, users can switch from one wallet provider to another without losing data. This means that providers must find other ways to build defense capabilities. Winning the developer is one of them. 
  • Competition is heating up. Now, MetaMask is the king. However, many competitors are vying for the throne. Coinbase provides a wallet, and Block (fka Square) may follow suit. Insurgents like Rainbow, Phantom and Argent should not be underestimated. 

Disclaimer: I want to take a moment to remind readers that I am not a reporter. Instead, I am a writer and investment analyst. The generalist exists to explore the future and define its company. It is not an investigative news organization. As part of my process, I told the story of how great businesses started. In today’s article, you will notice that this piece of history is controversial. I have tried my best to be as thorough, objective and fair as possible, and state the facts to the best of my ability.

Bruce Wayne sits across from the dining table of Harvey Dent, Gotham City’s handsome District Attorney. With unmarried lover Rachel Dawes and his own charming date beside him, Wayne listened to Dante’s enthusiasm for his speech. He was defending Batman’s vigilance, but he didn’t know that the man behind the mask was sitting in front of him. 

“When their enemy is at the gate of the city, the Romans will suspend democracy and appoint someone to protect the city. This is not considered an honor. It is considered a public service.” 

“Harvey, the last person they appointed to protect the Republic was named Caesar. He never gave up his power,” Dawes retorted. 

“Okay, okay… You either die like a hero, or you live to see yourself become a villain.” This scene outlines the perspective of Christopher Nolan’s 2008 movie The Dark Knight. The distance between admiration and hostility, heroism and evil is a thin line breaking-difference is only a matter of time. 

It is also a suitable framework for MetaMask. Although it is the most widely used wallet in the crypto space, responsible for guiding tens of millions of users to the web3 world, this bulky product has annoyed many of the industry’s most ardent supporters. 

The result is a self-contradictory company that can elicit radically different opinions. Supporters will point to the admirable universality of MetaMask and the jaw-dropping 2021 revenue of more than $2 million, which shows that MetaMask is just getting started. At the same time, doubters prepared eulogy, treating the company as the Yahoo of web3, waiting to be eclipsed by Google. 

Just like in Nolan’s movie, the differences between these positions are not as unpredictable as you might think. 

In today’s article, we will analyze the position of MetaMask in the encryption field, and outline its origin, function and importance. We will also uncover its obvious flaws, think about possible next moves, and list those who have begun to challenge the throne. In particular, you will hear the following: 

  • origin. The history of MetaMask can be traced back to the first Ethereum Devcon ever. This is also a controversial story. 
  • Consensus system. The parent company behind MetaMask has undergone many evolutions.
  • product. Despite the powerful architecture, MetaMask’s front-end experience may confuse novices. 
  • Traction. Facts have proved that this is an explosive year for MetaMask. It generates hundreds of millions of dollars in revenue and has a profit margin close to 100%. 
  • future. We are in the early stages of the encryption revolution. Wallets like MetaMask will have to adapt to technological and social changes. 

Prehistoric steam

Miami

This is an unlikely location for important meetings. Florida is known for its happy togetherness and silver-haired snowbirds, but it is not always known for technological innovation. When it comes to the story of Ethereum, the Sunshine State may be more commendable. 

In January 2014, a rather broken group met at a beach house in Miami. Although they chose this state to attend the North American Bitcoin Conference at the Cleveland Hotel in South Beach, the real purpose of their visit was to discuss a different crypto project: Ethereum. 

A few months ago, the then 19-year-old little horse Vitalik Buterin ( Vitalik Buterin ) wrote a “white paper” outlining what he saw as the possibility of an “air computer”. His work attracted support and attention, including those who joined him in Miami. He came to the beach house with two other talented developers: the scruffy and enthusiastic Gavin Wood and Charles Hoskinson with glasses. Businessmen Anthony Di Iorio and Joseph Lubin also participated in the discussion. 

If Buterin effortlessly applied gravitation to the convener, then Lubin must seem to be the most off-track. The Toronto native has worked in Buterin for 30 years and attended the meeting after being invited by Di Iorio. Although Lubin’s engineering background means that he quickly grasped the consequences of what was discussed, his age and size mean that he reads more like a Wall Street suit than a software disruptor. 

As it happens, Lubin once worked on Wall Street. After graduating from Princeton University with degrees in electrical engineering and computer science, where he shared a room with future cryptocurrency investor Michael Novogratz, Lubin worked as a research scientist for seven years before joining Goldman Sachs as a vice president. 

However, any financial person who thinks Lubin is lack of creativity will misunderstand him. Several other episodes illustrate the tendency to not stick to the rules. After graduating from university, Rubin tried to become a professional squash player; after the 2008 crisis, he considered becoming Colonel Kurtz, considering buying a small piece of land in Peru as a post-apocalyptic haven. Finally, after falling in love with Jamaican singers, he founded a ballroom record company.

All of this shows that Rubin may seem like an “adult in the room”, but his history shows an adventurous and open attitude that will surprise anyone who judges him quickly. 

During the team’s stay in Miami, Lubin not only ensured his pioneering position in the Ethereum revolution, but also established his business acumen to balance the brain and emotional core of Buterin (V God). This will prove Lubin’s career and a decisive moment in the history of Ethereum. 

Developer Conference 0 

In 11 months, many of the same characters will find themselves crossing the Atlantic Ocean at another meeting. Devcon 0 is the first official forum of Ethereum. It was held in Berlin, and the backbone of Buterin, Wood and other early believers gave speeches. 

By then, the Ethereum team has made a core decision: this will be a non-profit endeavor. Under Buterin’s leadership, this choice shattered the leadership team and sent some of the first people to find a new pasture. Although still close to Buterin, Lubin is one of those people who have begun to look beyond the project and turn to more commercial avenues. Around Devcon 0, he started a new adventure: ConsenSys. The company aims to provide funding and discovery for businesses built on Ethereum, helping the adoption of the network and bringing its benefits to consumers and businesses that are not getting started. 

In a conference room in Berlin, the predecessor of a star asset of ConsenSys was born. Joel Dietz is a fanatic among the many converts. With the fluffy hair and childish face that made Hugh Grant a star in the nineties, Dietz has established a certain presence in the ecosystem. Not only did he think about the future of cryptocurrency in Bitcoin Magazine, but he also initiated a series of gatherings for Ethereum enthusiasts in Silicon Valley. 

In addition to these activities, Dietz is also working on one of his own projects—or rather, some of them. In our exchanges, Dietz described himself like this, “I have always been a person busy with multiple projects.”

One of the projects is Swarm, a Bitcoin-based crowdfunding platform. He is obviously also working on a series of encrypted browser extensions. It turns out that this allowed Dietz to act on one of the ideas circulating during the meeting. He recalled it like this:

There is a lot of discussion on Devcon 0 about the need for a JavaScript client and some web3 interfaces, which bridge the world of standard web applications and the world of Ethereum clients.

In one of the conference rooms, Dietz sat down with Buterin and Wood and made a simple pitch: he should get one of the recently announced Ethereum developer grants and create a JavaScript-based browser extension. 

Buterin doesn’t seem to be very convincing. Dietz recalled that he was very interested in this idea and even gave it a name: steam. Despite not committing funds, Dietz left Berlin with another project. 

After returning to California, he began to use the network he established to carry out his work. He wants to talk to “all JavaScript developers who have performed any kind of demonstration on the Ethereum client” in the state. In the end, it certainly won’t take too long-according to Dietz’s recollection, there are no more than four demonstrations like this. Among them is a group of Apple employees, led by “JavaScript hacker” Aaron Davis. 

An orange blond hair later turned into dreadlocks, Davis is known in the cryptocurrency world by his pen name “Kumavis”. Like Dietz, he realized the potential of blockchain early on and started experimenting through construction. In our communication, Kumavis mentioned that he came up with the idea of ​​an Ethereum wallet after planning a crowdfunding campaign and realizing that he needed a way to “spread the link”.

Dietz and Kumavis decided to join forces to create Vapor-initially on an informal basis. As Dietz said, Kumavis is very interested, but hopes that this initial project can raise funds before he leaves Apple to work full-time in the security environment. The third member, Martin Becze, has been living in the joint office building where Dietz helped to operate and assist the Ethereum Foundation, and he also jumped on board. 

In order to raise funds, the trio tried to enter the place that powers so many unicorns: Y Combinator. 

In the app video available on YouTube, you can see Becze, Dietz, and Kumavis explaining the exact content they are trying to build. 

Although full of enthusiasm, this is not the clearest tone. But without the established language we now have, how would you describe what they are building? The word “wallet” is not mentioned in the one-minute clip because it has no meaning today. Instead, the team described the content they are building as “combining the browser with the blockchain.”

It is commendable that this publicity by Y Combinator aroused enough curiosity that they sent out an interview invitation, but was subsequently rejected. Dietz provided the email received by the team, sent by YC partner Trevor Blackwell. This is a great artifact from the early days of web3: 

MetaMask is a well-deserved crypto hero

In hindsight, how do you feel about our smart contract adoption now? But Blackwell’s position is held by most technicians, even those who are good at predicting and funding the future.

Even without YC’s support, the founder of Vapor continued to work on the project, but cracks began to appear.

Post-YC: The tricky area

So far, the trajectory of the Vapor story is fairly clear. But it is about to fall into the rabbit hole and sink into the shadows. We will go out the other side, but we must first try to pass a more vague narrative. 

While researching this article, I tried to talk to the three founders of Vapor, successful contributors to MetaMask, and others in the wallet field. Although I can hear a lot, there are still missing parts. I did not talk to Joe Lubin and Daniel Finlay, the latter is a ConsenSys developer and considered one of the founders of MetaMask. I also did not receive a reply from Martin Becze, the third member of Vapor.

This means that the next part mainly relies on the testimony of the two founders of Vapor, Joel Dietz and Kumavis. They are different. 

After YC was rejected, Kumavis continued to work on building Vapor. He soon discovered that he was the only one of the three who made a contribution. Becze focuses on other Ethereum-related activities, while Dietz ostensibly participates in other projects. “I completed 100% of the work,” Kumavis pointed out. 

Dietz himself seems to have confirmed that Kumavis was the main contributor, and an independent comment stated that he “completed approximately 90% of the work specific to coding and browser extensions.” For his part, Dietz initially pointed out that he “provided funding for early development,” referring to paying for office space and team meals. Kumavis made it clear that Dietz “never paid any fees” and asked him to provide a receipt. 

When asked for more details on the use of his funds, Dietz stated that he paid for sushi lunch and dinner, which was the “only direct financing” he provided. Regarding office space, Dietz led me to this TechCrunch video, which highlighted his role as the “dad” of Love Nest, a hacker home in Palo Alto. He pointed out that Becze lives in Love Nest and his rent is paid by the Ethereum Foundation. Although Dietz’s inference is not completely clear, it seems to be because the work related to steam took place in Aichao, and he indirectly funded its development. Dietz agreed that Kumavis didn’t get any benefit from working at Love Nest. He said, “[He] hasn’t left his day-to-day work, so he has never actually worked in our office.”

Then there is the issue of grants from the Ethereum Foundation. On Devcon 0, Dietz apparently talked to Buterin and Wood about accepting Vapor’s funds. After returning to California, he began to prepare a grant application of $30,000. According to his recollection, Dietz wrote 60-70% of the grant, and Becze added the rest. A version of this document can be downloaded here, and the site is ostensibly hosted by Dietz. Dietz could not confirm whether the document was the final version received by the Ethereum Foundation or an earlier draft.

Although not included in the grant document—perhaps this suggests that it is not a final copy—Dietz and Kumavis both mentioned a clause allowing Dietz to pay. Specifically, Dietz stated that he should receive 10% of the $30,000 grant for his contribution to the Vapor project. 

For Dietz, this seemed to be a fair return for the dinner he paid for and the time he spent writing the grant. In a message, he pointed out that $3,000 was “approximately the amount of expenses I have borne for the project.” He clarified that this figure includes the cost of his flight to Devcon 0 before the formation of Vapor. According to his estimates, those sushi dinners cost him about $700. 

This is seen as a cause of concern for Kumavis. He did not understand why part of the grant was used to pay for one of the donors. For Dietz, he said, “He has a plan to give himself a large sum of money, not as a salary. It doesn’t make any sense.” Kumavis quoted a message from Dietz — I did not review — he said He expects 15% of the appropriation, not 10%. 

Has this grant been paid?

Again, this matter is controversial; it may be something that only the Ethereum Foundation can officially unlock. Dietz said yes. The basis for his statement seems to be that Kumavis later received funding from the foundation for the development of the Ethereum wallet. What he meant was that Kumavis received a reward for the work provided by him and Becze in writing. 

Dietz seemed to suspect that part of the trick was because he was surprised that Kumavis had left the project. As he said, he found himself deleted from Vapor’s Github organization and Slack channel, the former was renamed “Metamask”. This experience made him feel like he was pushed out of the door unfairly. He said: “I think you can say that I was forced to leave.”

For Kumavis, this separation is less dramatic and controversial. He did delete Dietz from Vapor’s Github and Slack, but that was because Vapor didn’t go anywhere. Due to his co-founder’s lack of effort and frustration that the product was “not suitable”, he decided to sever the relationship and start over. He separately applied for new funding from the Ethereum Foundation. It was this submission that was later awarded, which means that the funds received are at his own discretion. I have not seen the version of the second grant application. 

Kumavis used $30,000 to support him in building a new project from scratch: MetaMask. After the money ran out, he continued to work alone for a while, but without a salary and newborns, he decided to hand over the project to ConsenSys. At that time, it was just a “sloppy team of hackers”, and it felt appropriate. 

After joining, Kumavis hopes to strengthen the firepower of the new project. For this, he turned to Dan Finlay, a friend and former colleague of Apple. Finlay’s impact seems to be immediate and memorable. As Kumavis said, it is surprising that Finlay brought a fox logo to the project-today, it is the business card of MetaMask. Kumavis emphasized the freshness of this effort and its non-reliance on Vapor’s code. He said: “Since we have just started from scratch, we have the fox before any work functionality.”

Now, we can emerge from the other side and return to the warm sun of undisputed truth. The steam is dead. MetaMask appears under the banner of ConsenSys, and its future is defined by Kumavis, Dan Finlay and Joe Lubin.

History: The versatility of ConsenSys

To understand what MetaMask has become, we need to understand its adoptive parent company more clearly. However, ConsenSys did not make this description easy. In the course of its seven years, it has changed its methods many times to adapt to changing market dynamics and drastic changes in operations. 

Lex Sokolin, chief economist at ConsenSys, explained the various stages of the company and singled out three different transitions. We will study how these different changes affect the development of MetaMask.

Phase 1: Cryptocurrency Burners

ConsenSys, which Kumavis joined, is trying to become a start-up laboratory that brings together outstanding technicians and provides them with financial support and discretion to build everything needed for the crypto ecosystem. 

Although the spirit is noble, it creates an environment with little structure. As Sokolin pointed out, Rubin funded 100 companies in hundreds of different ways during this period, “some of which are very loose.” 

Mike Demarais, the CEO of Rainbow, another crypto wallet provider, vividly captured this aspect of ConsenSys, “[This is] a crazy place. It’s a bit like a paid Burning Man festival.” Demarais is paying close attention to the company. , And hired many people working under its sponsorship. 

This suits and hinders MetaMask. 

On the one hand, it allows Kumavis and Finlay to continue the project. Initially, the team thought that MetaMask would be a simpler project and build faster. Sokolin said: “It has become a never-ending project. In a good way.” If there is a stricter deadline or end status, MetaMask may not become so powerful. 

On the contrary, the looseness of ConsenSys means that the project has little vision. Although Kumavis and Finlay are very talented, they see MetaMask as a development tool, not a consumer project. Brandon Millman, CEO of Phantom Wallet, worked with the MetaMask team during his previous work at API provider 0x. He emphasized this clear preference and the logic behind it: 

Obviously, the product was built by developers for other developers. This makes sense, because most users of Ethereum were developers in the early days.

But while it may make sense to focus on developers in 2014—and have lasting benefits—the lack of long-term plans for consumer use hinders MetaMask. Today, many complaints stem from the lack of intuitiveness of the product. Many of these decisions seem to have been determined from the beginning. 

Phase 2: Cut and survive

After the prosperous 2017, cryptocurrency fell into a two-year winter. Bitcoin has been trading at a high price of 19,000 US dollars, plummeting to nearly 3,000 US dollars; Ethereum fell from nearly 1,400 US dollars to 84 US dollars.

Inevitably, ConsenSys was hit hard. Not only has the value of its holdings plummeted, but confidence in the entire cryptocurrency effort has also faded. More popular than ever, a person who is ostensibly knowledgeable declares that they see the huge potential of blockchain, not cryptocurrency. 

ConsenSys turned to serve such pseudo-skeptics. Instead of watering dozens of startups that are struggling to blossom under its absent-minded care, it focuses on providing knowledge and services to large institutions to explore the blockchain revolution. Over the next few years, banks, media companies, and governments all depended on ConsenSys for consulting services. Sokolin said that the company has cooperated with ten central banks to provide advice on digital currency projects. 

However, ConsenSys is not a picture of financial health. At the end of 2018, the company laid off 13% of its employees to improve its financial situation. MetaMask survived this period, showing that it has established itself as a core part of the infrastructure. In the same year these reductions occurred, MetaMask had more than 1 million downloads—not bad for a project that Y Combinator abandoned a few years ago. 

Phase 3: Split and streamline

Starting in 2020, ConsenSys began to reorganize itself. In order to raise funds, the company split itself into two separate entities: “ConsenSys Mesh” and “ConsenSys Software”. Everyone has their own focus. 

ConsenSys Mesh will serve as an investment entity, overlooking the business portfolio and providing financing for the new company. 

“ConsenSys Software” will bundle the company’s leading technology assets into a clearer product. Sitting under this new banner are Infura, Truffle, Codefi, Diligence, and of course MetaMask. After ConsenSys purchased a commercial blockchain platform from JPMorgan Chase, Quorum will join the quintet in August 2020. 

MetaMask is a well-deserved crypto hero

In order to promote change, the company layoffs again, layoffs 14%. At least, as a strategic strategy, it seems to have paid off. ConsenSys Software announced a $65 million round of financing in April 2021, followed by a $200 million recharge in November. 

Although it must be helped by the white-hot cryptocurrency market, the support from the third point and blue chip financiers such as Marshall Wace also shows confidence in the new structure of ConsenSys.

For MetaMask, rearrangement brings a logic. On the one hand, ConsenSys seems to be keen to promote true synergy between its six different attributes-a benefit that still has enticing theoretical significance when it manages its software salmagundi. Since there are fewer products to focus on, it should be able to build a real bridge. 

Equally important, it should eventually receive more funding. ConsenSys not only does a better job of raising funds, but it no longer needs to allocate funds among a large number of products. As the star of the product portfolio, in addition to the development platform Infura, MetaMask will become a real priority. 

Such clarity came too early. The attractiveness of MetaMask reached overdrive in 2021, making it one of the most popular blockchain applications in the world. ConsenSys needs to prove that it is a suitable butler. 

Definition: What makes an encrypted wallet?

Before we further study the prospects of MetaMask, it is worth taking a moment to more specifically define the functions of encrypted wallets and what users can get from them. 

Parsing web3 primitives is usually tricky, and a single analogy rarely captures the whole picture. With this in mind, let us use five analogies to unlock encrypted wallets. In the end, we will master their function, position and importance in the ecosystem. 

1. A wallet is like…a wallet.

2. A wallet is like… a bank account.  

3. The wallet is like… a passport. 

4. The wallet is like… a browser. 

5. The wallet is like…a magical inventory. 

A wallet is like a wallet

This is easy. Encrypted wallet gets its name because its functions are the same as ordinary wallets. They are designed to protect your funds and make them available for consumption. Just like you might bring out a reliable wallet at your local coffee shop, when you are ready to buy NFT on OpenSea, you need to log in to your MetaMask. 

A wallet is like a bank account (or a fintech application). However, this is not the whole picture. There are two main reasons:

1. The encrypted wallet does not actually keep your assets. 

2. Encrypted wallets can do more than just physical wallets. 

Let’s take a look at these. First, while traditional wallets can indeed hold your money—a crumpled $10 tucked next to the Metrocard—crypto wallets do not. Your Bitcoin or Ethereum is not actually stored on MetaMask. Instead, these assets exist on the blockchain. Your encrypted wallet just manages a “private key”, essentially a secret password, anyone can use it to manage funds.

In this respect, it is not much different from a bank account. When you start the JP Morgan Chase app, enter your password, and then check your balance, you are not actually observing the money itself, but presenting it digitally.

If you want to open a project like Personal Capital, the analogy will be clearer. It shows your entire investment portfolio but is not responsible for keeping it. The relationship between crypto wallets and crypto assets is similar. 

Secondly, compared to a physical wallet, you can engage in more types of activities from the bank. The physical wallet allows users to efficiently manipulate two commands: addition and subtraction. You can put money in (plus) or withdraw (minus) money. 

Encrypted wallets are different in this way and are more similar to bank accounts. In addition to increasing or decreasing funds, you can also use your encrypted wallet to earn interest by collateralizing, issuing loans, paying friends or performing any different operations. Although these are not implemented in the wallet, it is the intermediary that facilitates the formation of these relationships. 

Just as you can use your Chase account to obtain a mortgage, you can use your MetaMask account to obtain an encrypted loan. 

Wallet is a passport

Web3 is an online parallel universe. It needs to understand different terminology, different cultural norms and different currencies. Although you can participate in part of the crypto economy without a wallet like MetaMask, it is necessary to participate in many attractions in the field. 

For example, to use a decentralized exchange like Sushi, you need to have a wallet with which you can interact. If you want to take advantage of the absurd and possibly unsustainable interest provided by Olympus, then the same is true. Buying an NFT on OpenSea definitely requires one, just like playing the world’s most popular encrypted game Axie Infinity . 

Companies like MetaMask provide this kind of access to keep your identity along the way. Although you can surf the decentralized network anonymously (or under a pseudonym), you can also attach iconic information, such as NFT or Ethereum name, to mark your identity. The wallet is a passport, representing a sense of identity and opening a new world.

The wallet is the browser

Due to their usefulness in manipulating assets, wallets are usually where crypto activities begin. For example, if I want to trade Luna with Ethereum, I can do it through MetaMask. Similarly, if I want to send money to a friend, I might start with a wallet instead of Coinbase. 

This gives the wallet a position of power. Just like a web browser, encrypted wallets regulate our experience and interaction with the blockchain, between us and the actions we want to take.

Wallets are magical inventory

One of my favorite abstractions comes from Sokolin. As he described it, the wallet is a “magic inventory”. That’s because they contain not only currency, but also show your financial, social and artistic assets and relationships.

For example, in my wallet, you can find:

  • Some cryptocurrencies . Mainly Ethereum, its function is closest to fiat currency. I use it to buy other currencies and NFTs, or to pay for gas costs incurred by using the Ethereum network. 
  • An Ethereum domain name . I purchased mariog.eth through Ethereum Name Services, an encrypted domain name provider , and this is used as an identity on the chain. 
  • Some visual NFT . Of course, I own a Philosophical Fox and several other NFTs.
  • Tokens created . Earlier this year, we minted GENERALIST tokens as part of crowdfunding, multiplayer media, and NFT experiments. 
  • Some tokens from DAO . As part of my research on DAO, I added some. I own tokens that symbolize membership and governance rights.

MetaMask is a well-deserved crypto hero

This is a very dazzling mix, and it shows how powerful crypto wallets are compared to their equivalents in the real world. To better understand how this combination fits together, let’s turn to MetaMask’s products. 

Product: Fully functional but flawed

Although MetaMask is known for its consumer services, it has two other stakeholders: developers and institutions. 

consumer

More than 21 million people use MetaMask. The vast majority are consumers. For these users, MetaMask implements four core functions: 

1. Management . Users can see the tokens they hold and manage their private keys. 

2.  Transfer . MetaMask provides an interface for users to send tokens to others or move tokens in their own accounts. 

3.  Procurement . Users can use their MetaMask wallet to purchase tokens or NFTs. 

4.  Swaps . The recently added MetaMask allows customers to remotely exchange tokens through other exchanges. It proved to be a huge source of income. 

5.  Signature . With MetaMask, you can verify different transactions, such as joining DAO or minting NFT. This is done by “signing”, which is shorthand for verification.  

MetaMask extends this functionality in two forms: browser extensions and mobile applications. The latter was recently added and will be released in the fall of 2020. Both are fairly barebones experience and require a large number of users. 

Let’s take a look at the experience journey. First of all, this is what MetaMask looks like in a browser. The fox icon is located in the corner. Once logged in, users can access a mini-portal that displays their balance and provides quick access to three key functions: purchase, send, and exchange.  

MetaMask is a well-deserved crypto hero

A more complete view provides more information and shows the rest of a person.

MetaMask is a well-deserved crypto hero

Users who press ” Buy ” will be prompted to open a mode that links to different encrypted portals and provides direct deposits. 

MetaMask is a well-deserved crypto hero

Pressing ” Send ” will take you to this rather incomprehensible screen, which can be used to move tokens between your accounts or send them to another party.

MetaMask is a well-deserved crypto hero

On this topic, you can view your different accounts in MetaMask by clicking on your profile picture in the upper right corner By doing this, you can also add other accounts, import accounts, or connect hardware wallets. These are small USB-sized devices that have the same purpose as devices such as MetaMask, but are offline, so they are unlikely to be penetrated. (Of course, you can still lose them.) 

MetaMask is a well-deserved crypto hero

Click “Exchange” to call up MetaMask’s quasi-exchange function. In exchange for fees, the wallet will look for a place to exchange one currency for another at the best possible price. For example, through swaps, you can use your ETH to trade SUSHI and set a “slippage tolerance” for how much price fluctuations you are willing to bear. As mentioned, this little feature is an extraordinary money-making tool.

MetaMask is a well-deserved crypto hero

Finally, when a certain kind of on-chain transaction needs to be verified, MetaMask will start to act. For example, when you navigate to OpenSea and try to purchase NFT, MetaMask will pop up, asking you to “sign” and confirm the operation. 

MetaMask is a well-deserved crypto hero

OpenSea and MetaMask

Although powerful and restrained, MetaMask does not feel like a simple product, nor is it a fully functional product. Navigating between accounts feels a bit dangerous. Although MetaMask tries to simplify transactions, the confusion of encryption terms, maximum values, time estimates, and gas information can be confusing even for intermediate users. Although it can access relevant data, users can’t see the NFT they purchased anywhere—other services provide more complete functionality.

Although it has been brewing for seven years, MetaMask is still a long way from Amazon’s seamless one-click checkout.

It should be noted that this is only one aspect of the MetaMask product. Although its front-end may be flawed, MetaMask’s back-end is excellent. The company has invested a lot of energy in its architecture and painstakingly made the safest products possible. This craftsmanship makes MetaMask a favorite of developers. 

Developer

MetaMask’s confusing consumer experience may not be the point. More than we may realize, MetaMask is a developer’s priority product. 

Lex Sokolin emphasized this point. Although he pointed out that the team’s first task is to improve the core product and strengthen security, he pointed out that “the second priority of the team is developers.”

As he described, MetaMask exists to a large extent to provide cryptocurrency developers with an interface to consumers. The idea is to form a benign flywheel: as more and more developers use MetaMask, products become more valuable, attract more consumers, and thus attract the next wave of developers. 

So far, this plan has been executed very well. MetaMask has integrations with more than 17,000 destinations in the encryption field. 

In order to make itself attractive to builders, MetaMask has written accessible documentation that makes it easy to take advantage of the product. This is the real point of separation from others in the field-even Coinbase, despite its wealth, does not provide the same level of clarity. Francesco Agosti, CTO of Phantom, mentioned the effectiveness of MetaMask here: 

I think they have also been good at building and implementing their developer API as a standard rather than a proprietary interface in an open way. I also see that they take security very seriously and open source many of their tools for security, which I appreciate. 

Insurgents, which we will discuss later, may succeed in providing a smoother user experience, but none seems to be as honed as a developer.

mechanism

Earlier this year, MetaMask announced its next major move: to provide support to institutional clients, including funds, market makers and traders. Although the core interface looks similar to marketing materials, behind the scenes, MetaMask adds security, custody, and transaction features. 

In terms of security, MetaMask appears to be using Codefi, one of its ConsenSys brothers. Although ConsenSys has been criticized in the past for creating too many isolated products that are difficult to communicate with each other, in this case, they seem to work together, and Codefi’s “trusted and automated compliance” supports the MetaMask organization (MMI). 

In terms of hosting, MetaMask works with providers BitGo, Cactus and Qredo-it will definitely need to add other large companies to strengthen its products. 

Finally, MetaMask’s institutional marketing website pointed out that the simplified transaction process will simplify operations and save transaction costs.  

MetaMask is a well-deserved crypto hero

In summary, this seems to be a strong first attempt to provide services to large enterprises, and it relies on the advantages of MetaMasks. ConsenSys has been thinking carefully and has established a good reputation and network among large organizations; it should be able to use these relationships to benefit MMI. 

Traction: MetaMask supersonic

The weaknesses of MetaMask products should be accompanied by appropriate context. Although the team has time to stand on its side, there has never been the most beneficial workplace structure underneath it. In addition, in the past year, MetaMask has experienced rapid growth in scale, which will disrupt smaller services. 

In a little over a year, MetaMask’s monthly active users increased by 2100%, from 1 million to more than 21 million. Although it is undoubtedly good news, it is hard to imagine how much pressure this puts on the MetaMask system and the people who maintain it. 

When commenting on the inadequacies of MetaMask, Sokolin commented with a tired, annoyed smile: “People should be happy about this. This is an incredible pressure for the team.” 

MetaMask’s surge is not only related to usage-the company has also rapidly expanded its revenue. In October 2020, the team launched the aforementioned “swap” function. As mentioned earlier, Swaps allows users to exchange their currencies, and MetaMask executes transactions on a separate exchange. As payment for doing so, MetaMask withdrew 0.875% of the fee. 

Facts have proved that this is a very sharp move. Despite charging fees that some people consider “excessive”, MetaMask succeeded in monetizing swaps very effectively. Research firm Delphi Digital reports that MetaMask’s revenue through this feature will reach $200 million in 2021. In contrast, popular DeFi products like Sushi only made $70 million in the same period. 

 Delphi Digital defiantly concluded its analysis of MetaMask’s revenue: 

Now consider this: Metamask’s customer acquisition cost (CAC) is a huge zero. Metamask has no token incentives or emissions, so their income has almost no cost. Their profit margin is close to 100%. Imagine if they had a token.

Such advice is not out of date. MetaMask has tried to launch tokens many times in its history. Recently, Joe Lubin posted a suggestion on the $MASK token on Twitter: 

MetaMask is a well-deserved crypto hero

Does tokenization make sense for MetaMask?

It doesn’t seem like a certain thing, on the one hand, MetaMask has not publicly stated a clear idea of ​​what functions the token will provide. Past discussions have clearly mentioned such a token that allows customers to vote on potential new features, known as the “token weighted backlog.” According to Demarais, this is the “weakest value proposition” for such a project.

In addition, there is a risk that tokens will only add short-term heat to the project. In our discussion of OpenSea, we outlined how Rarible ‘s $RARI token temporarily allowed them to dominate the NFT market-but it did not last.

OpenSea without tokens is more in line with the needs of consumers to become stronger, focus on their products and surpass them. Demarais pointed out, ” Having a token does not make you win. It can improve your abilities .” 

After 18 months of rapid development of fees, MetaMask does not look like a company that needs to cheer up, but more like a company that needs to be reset. Millman, CEO of Phantom, talked about the potential $MASK token: 

Personally, I am a little skeptical. What MetaMask needs to do now is to focus on improving their core products. Bringing a broader “community” into some token governance process will only slow down development and iteration. I think everyone agrees that we need more cycles to get the wallet product right.

In general, MetaMask is commendable for surviving the super drive of 2021 and effectively monetizing it. However, in order to stay ahead, it needs to adapt to new challenges.  

The future: where did the wallet go?

No industry is developing faster than cryptocurrency, and it changes meaningfully every day as new companies, technologies, and financiers continue to emerge. We are in the first minute of the first game, and there are more crazy days ahead than behind us. 

This means that, by definition, crypto wallets are in their infancy. They are not even semi-formed things, designed to serve use cases that are subject to change, supported by technologies that may be tampered with. This volatility brings both risks and opportunities. 

We can expect four direct impacts on the evolution of wallets in the web3 field: 

1. There will be greater competition. 

2. There will be greater adoption. 

3. Cross-network demand may increase. 

4. There will be more use cases. 

Each one will affect the future of MetaMask. We will unpack these packages and carefully consider the current position of the market leader. 

Greater competition

When MetaMask was officially launched in 2016, it had the advantage of being in an area where competitors were extremely rare. In the following years, others joined the competition, but no one succeeded in overthrowing MetaMask as the most commonly used service in the space. 

This may not be the case forever. Competitors have emerged from multiple angles, established players have joined the wallet service, and the insurgents hope to take advantage of MetaMask’s loopholes. 

Coinbase is the most obvious participant in the first category. The cryptocurrency exchange also offers a wallet product whose design is similar to its core product. Coinbase Wallet supports NFT and connects to the main exchange, simplifying the transaction process.

Although it is a friendly entrance, it feels that Coinbase is unlikely to be a winner in this field, at least for everyone except the most casual users. Although MetaMask aggregates different exchanges and finds the best prices for you through Swaps, Coinbase has little incentive to conduct meaningful searches. This is just one example of how the company’s core products can subtly limit the utility of the wallet. 

The Jack Dorsey company Block, which was not called Square until this week, may face similar problems. Although Block has not yet provided a wallet, there are rumors that it is developing a wallet in the Bitcoin field, sponsored by the sub-brand Spiral. Although it seems that the obsession with Bitcoin surpasses all other challengers, Spiral or similar entities may enter the Ethereum-centric world dominated by MetaMask. Likewise, while a potentially useful entry point, real users may eventually be annoyed by any default power Block provided for its encrypted exchange service.

Decentralized exchanges and other crypto projects also play a role in this area. According to Rainbow’s Demarais, both Uniswap and Aave may launch mobile wallets. From his perspective, at least, these organizations will succumb to the same problem-using wallets as a way to support different business units, rather than a truly unique entity. 

This has left many upstarts, of which Rainbow is the most prominent. For Demarais and his team, the script is simple: make a wallet that ordinary consumers can use, and provide new experiences worthy of education and support. 

Phantom uses a similar approach, but uses different wedges. Instead of supporting the Ethereum ecosystem, Millman and Agosti decided to take advantage of Solana’s rebellion. 

Today, Phantom is the first choice for Solana users, and this method obviously pays off. The latest data from the team shows that Phantom has 1.5 million monthly active users and 100,000 new installations every week. It has raised 9 million US dollars from Garry Tan and a16z. 

Argent is another outstanding participant, receiving $16.2 million in funding from leading companies such as Paradigm, Hummingbird, and Index. Argent focuses on the Ethereum ecosystem and can easily access 20% of APY through DeFi protocols such as Aaave and Compound. According to a source, Argent has strong security features and robust architecture from a technical point of view. 

There are other participants that deserve more discussion in another article. Trust, Pillar, Dharma, Frame, Balance, Torus, WalletConnect (an SDK), etc. play an important role in the ecosystem. In addition, there are several unannounced projects that have caused a sensation. 

If there is a space that grows fast enough to accommodate multiple winners, it is encryption. However, although this dynamic means that MetaMask will not worry too much about competition, the locality of the blockchain makes it easier to switch to new suppliers than in other industries. Since all data is stored on the chain, users can easily exchange one wallet for another without losing the context. This “wholesale exit”, as Demarais said, is a victory for consumers, but it reduces the defense capabilities of players in this field. Since many projects are open source, they can be forked and recreated, which is exacerbated by the fact. 

All in all, the dynamics of the crypto space make MetaMask likely to face many competitors and easily mixed consumer groups.  

Wider adoption

A large part of the reason MetaMask will face so many competitors is because encryption is entering the mainstream, bringing a wave of new users, including consumers, institutions, and developers. 

Let’s look at consumers first. Three years ago, there were an estimated 31 million crypto wallet users; today, there are nearly 80 million. 

MetaMask is a well-deserved crypto hero

statistics

Compared with the use of other technologies, these numbers still pale in comparison. In 2018, the World Bank estimated that 3.8 billion people have access to traditional banks, and there are currently 4.6 billion active Internet users. Will we eventually see a similar penetration of crypto wallets? 

No matter how high it is, players in this field need to attract a large audience. MetaMask does have one advantage in this regard: name recognition. Although its product is not perfect, it is the default provider. Demarais said a lot and pointed out, “It has become a verb. It has become a brand. This is our challenge.”

In order to replace MetaMask, Rainbow has adopted an active counter-positioning. Although MetaMask feels strange and profound, Rainbow has the flexibility and color of a social media challenger. This is combined with a consumer-friendly voice and inclusive spirit. Regarding consumer adoption, Jackson Dame, Rainbow’s community leader, said: 

The future of Web3 and the joining of the next 100 million users will require a more user-friendly and intuitive experience. I think many people in the ecosystem will not use these words to describe MetaMask.

It may not be too late for MetaMask to catch up. The company should have enough dry powder to recruit talented designers; if it can convince them, they will have enough space to do the best job. Part of the challenge may be that MetaMask’s approach is deeply ingrained, and the product is so mature as a developer that it is impossible to make a real transformation. 

According to Demarais, “MetaMask will not be an app on my brother’s home screen.” Kumavis, Finlay, and Lubin would hope he was wrong. 

As mentioned earlier, MetaMask seems to be much better positioned in terms of institutions . The company’s long history is likely to perform well. Demarais said of its initiatives to provide services to institutional clients, “I think it’s very smart… [MetaMask] The fact that [MetaMask] hasn’t changed in five years is almost conservative and a good thing [for institutions].”

The product ‘s historical attention to developers should also come in handy. Although products such as WalletConnect make it easier for application developers to provide integration with many different wallets at the same time, MetaMask is usually the first port to call when adding such features. Although the current team does not seem to be particularly prepared for the consumer revolution, Kumavis and Finlay are the best in the world in understanding what tool developers might want next. 

Even Demarais is optimistic about the potential of MetaMask and pointed out, “I believe in Metamask as a development tool.”

However, Phantom’s Agosti believes that just winning one electoral district is not enough. In the discussion about the defensiveness of space, this is his opinion: 

Wallets do have a virtuous circle and various network effects. Developers integrate popular wallets, and developers build applications that attract users to make wallets more popular. In an indirect way, the adoption of developers has been the main driving force for the growth of wallets such as Metamask. Users do not download Metamask to use Metamask; they download Metamask because they want to plant or buy NFT. 
No matter who can win the heart, both users and developers will benefit most from this virtuous circle.

More networks

A year ago, Solana was trading at $1.80. At the time of writing, its price is slightly less than $200. Such an exciting rise is just one sign of the project’s rise in a short period of time. In the next few years, we may see many others repeat Solana’s trajectory, that is, it feels like we are moving towards a multi-chain and multi-network future. For example, we can choose Ethereum as one type of interaction, Bitcoin as the other type, Solana as the third type, and Terra as the fourth type.

This proliferation has had an impact on MetaMask and other wallet manufacturers. The correct move is unclear. Should these companies accept the reality of multiple networks and expand their products? Or better to redouble their efforts and specialization to build a rich feature set for a network?

Adding a new chain requires a lot of work. Sokolin said: “It is very, very difficult to add a new chain.” It not only increases the technical complexity, but also increases the possibility of user confusion. A certain level of knowledge must be required to exchange between different networks according to the type of transaction, and this kind of education takes time. 

But if users are constantly swapping between different chains, the lack of such a feature may make sense. Francesco Agosti neatly sums up this dilemma: 

If there are several chains with comparable market shares (number of users, number of transactions), and these chains serve similar types of applications, then I think multi-chain wallets are a better experience. If there are significant differences between how the chains work, the user base of the chains, or the use cases provided by these chains… then the answer is not clear. Multi-chain wallets will have difficulty competing with wallets that target specific niche markets on specific chains.

Currently, MetaMask supports Ethereum and its ecosystem. For now, it doesn’t need to do much other things. But if projects like Solana and Terra continue to prosper, it may need to expand their scope. 

More uses 

The concept of a universal wallet may slowly disappear. As more exchanges and interactions occur on the chain, products may be dedicated to them. There are already certain wallets that have won certain niche markets.

Jackson Dame emphasized how Gnosis Safe has become “the de facto choice for almost every DAO seeking self-custodial assets.” The multi-signature function of the product makes it particularly suitable for DAO’s public financial structure. 

We can see a similar trend in the game. There are already some wallets claiming to clearly serve this field, Wombat is an example. Its bonuses for playing blockchain games and rich NFT support attracted nearly 1 million users. 

Over time, there may be many such sub-sectors that need services. Agosti once again encapsulated this potential well: 

In the next 5 years, there may be a massive wave of encryption use cases, expanding the total addressable market of wallets by an order of magnitude…The winners will be those who benefit the most from these waves or create waves themselves.

MetaMask shouldn’t be expected to capture all of these, but it will want to ensure that it will not be washed ashore. So far, the company is not the most agile or fastest shipper. 

By the end of “The Dark Knight”, Gotham was in chaos. Driven mad by the death of Rachel Dawes, the kind-hearted District Attorney Harvey Dent started a brutal atrocities until Bruce Wayne in a cloak Wayne) only stopped when he pushed him to the brink of death. In order to protect the city from the psychological harm of the upright Dante being exposed as a killer, Wayne and Gotham City Police Chief Gordon developed a plan together. Batman will fall and take responsibility for Dante’s crimes. Gotham will sleep better, believe in morality, kindness, and not so fluidity. 

The film ends with a conversation between Commissioner Gordon and his son. When his son asked Batman why he ran away without doing anything wrong, Gordon explained, “Because he is the hero Gotham City deserves, but not the hero it needs now.”

MetaMask is a crypto hero. For more than six years, its team has been committed to creating a product that may not be beautiful but effective. An important primitive that can be relied on and trusted. By doing so, MetaMask has opened web3 to tens of millions of users and thousands of developers. Demarais succinctly described the company’s contribution: “We wouldn’t be here without MetaMask.”

Such an important contribution deserves respect and reward. But this does not mean that the whirlpool of public opinion will be friendly to MetaMask. As more and more consumers flood into this field, they will expect the level of polishing and design that the front end does not have. Until this gap is truly resolved, complaints of one kind or the other will continue to exist. 

MetaMask may not mind, it has withstood a lot of tests, withstood the changes in the parent company’s structure and the unpredictable cruelty of the crypto market. As Commissioner Gordon said when talking about Batman’s exile, “He can accept it.” If there is a company that can tolerate being unpopular but still useful, it’s MetaMask. It may not be loved, but it is acceptable.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/metamask-is-a-well-deserved-crypto-hero/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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