[Research] The Web3 Wallet Landscape: Analyzing 75 Web3 Wallets

The web3 wallet market has been heating up in recent years, with many players trying to capitalize on the lack of good user experience, still so common in this industry. From self-custody wallets to wallet-as-a-service infrastructure providers, this market seems far from consolidation.

Wallets can have specific goals and features, depending on the type of user they aim to reach. Some are less intuitive and more geared towards the "DeFi degens." Others are more focused on specific assets, like NFTs.

Which are the biggest and most funded Web3 wallets?

Before we start, here is an important disclosure: Data for this research was gathered until December, 6, 2023.

Web3 is, overall, a very funding-reliant industry, with billions of dollars spent to fund blockchain companies in the last few years. That’s also true for wallet providers.

As we can see, there is a battle to capture the attention and the pockets of Web3 users. For years, it sounded like Metamask was flying solo.

Data gathered from Metamask/Consensys news
Data gathered from Metamask/Consensys news

From November 2020 to March 2022, the Metamask wallet grew its monthly active users from 1,000,000 to 30,000,000, according to Consensys. However, increasing competition, specialized wallets, and multichain features have been the name of the game in the last few years.

Although we may be coming out of the bear market, and the volume of transactions in Decentralized Exchanges is far from the peak of almost 300 billion dollars in May 2021, volume in DEXs (Decentralized Exchanges) is still at 30 to 70 billion dollars per month, a good proxy of how people are still using web3 wallets and trading crypto on-chain, even during a bear market.

Data until December, 6, 2023
Data until December, 6, 2023

It’s tricky to get on-chain data about wallets because a lot of them don’t have a tag in blockchain transactions since they are focused on privacy, so it’s difficult to know exactly if that specific wallet was involved in a given transaction.

However, this doesn’t mean we can’t analyze the market with other types of data.

Web3 Wallets Landscape Research

For this research, we gathered data from 75 different wallets, and, for each one of them, we asked these questions:

  • Does it have a KYC process?

  • Does it offer a self-custodial option?

  • Is it Multichain?

  • Can I add funds with debit/credit cards?

  • Does it have a browser extension?

  • Does it have card-issuing features?

  • Does it have a mobile app?

These questions were answered with YES or NO.

We also gathered the following data from each wallet company:

  • Headquarters (Country)

  • Headquarters (Region)

  • Number of Employees

  • Total Funding (in USD)

  • Monthly Website Visitors

  • Founding Year

  • Twitter Followers

After collecting the data, we had roughly 1,117 data points to analyze. Let’s extract some insights from it.

Where are Web3 wallet provider companies located, and how big are they?

As we could expect, the US leads the number of companies behind web3 wallets. Maybe the biggest surprise is Singapore, with 12 companies. This greatly represents the efforts of Singapore to build a renowned web3 ecosystem. The UK has 6 companies, with Switzerland 4 and three Asian countries also in the highlights: Hong Kong, Vietnam, and Taiwan.

However, when we analyze companies by their headquarters region, North America gets the third place, behind Asia and Oceania, and Europe. Interestingly, the ratio of wallet companies in Europe that require a KYC process and/or have card-issuing features is bigger than in other regions.

We can also analyze web3 wallet companies based on their number of employees.

Only 2 companies (Coinbase and BitGet) have more than 1000 employees. The majority, almost 49%, have between 11-50 employees, which indicates that the market is attracting builders and not just huge corporations and existing exchanges or web3 infrastructure providers.

And how much money have these companies raised until today? Since sometimes it’s not that easy to get that kind of data, for some wallets we had to insert the tag ‘Undefined or $0’.

As we can see, 22.6% of the companies analyzed raised between $10 and $100 million in funding. Just 3 companies raised more than $ 500 million in funding until this date. Unfortunately, we didn’t find data about funding for 36 companies available in our dataset.

Some of the most notable funding rounds were Fireblocks $ 550M Series E and Consensys $ 450M Series D.

As we could expect, US-based web3 wallet companies represent more than 50% of the companies that raised at least $ 10,000,000.

Also, our research shows that these companies collectively raised $ 5,497,535,000 in funding.

And these are the top10 web3 wallet providers, in terms of fundraising:

Some insights here:

  1. A relevant number of institutional providers in the Top 10 (Fireblocks, Anchorage, BitGo)

  2. Sky Mavies and Dapper are among the biggest fundraisers, both focused on building a wallet ecosystem for their own blockchains (Ronin and Flow, respectively)

  3. Metamask builder Consensys is the second largest fundraiser, raising more than 700 million dollars to this date (Important: The funding refers to all the Consensys ecosystem, not just Metamask).

As we talked about before, getting web3 wallet data in the blockchain can be tricky, since they don’t necessarily leave a trace. However, that doesn’t mean we can’t try to get some signals on the popularity of these wallets.

When we plot the top 10 web3 wallet providers by monthly website visitors, we got some interesting results:

Source: SimilarWeb
Source: SimilarWeb

As we could expect, we have some outliers in terms of web traffic, since Coinbase and Bitget are much more than just a wallet, so their websites/apps will attract traders, institutions, and more. It’s interesting to see players that are not that popular in terms of news, but that attract a lot of visitors every month, like Exodus, XPortal, and Kukai.

Lastly for this session, we can also analyze how old are these web3 wallet providers. Is there a correlation between bear or bull market and the launch of this kind of business?

As we can see, the 2016-2018 crypto cycle produced more than 40 of these companies. Interestingly, the 2020-2022 cycle produced less than half of that.

Which are the most common features of Web3 Wallets?

Now we will enter a new section in our research, where we explore the features of these web3 wallets. The first aspect we analyzed was “Does it have a KYC process?”. Important: Some wallets don’t have an upfront KYC process, but when the user uses a third-party application, like MoonPay, to 'purchase digital assets and fund their wallet', it will be necessary to pass through a KYC process. However, in our case, we are taking into account wallets that have an upfront KYC process, not the MoonPay/other providers one.

Our research found that almost 75% of wallets 'don't require users to complete a KYC (Know Your Customer) process before using the product'.

Then, we analyzed how many of them offer self-custody solutions. Another important point: some of them offer only self-custody, so users are 100% responsible for their assets. However, some companies have a mixed approach, offering self-custody for users but also custody services.

As we can see, 92% of the web3 wallet providers analyzed offer self-custody as an option for their customers.

How about chain offerings? How many of these wallets are multichain?

Overall, they are, with more than 77% of wallets providing multichain storage and trading options. For those who are not multichain, we can find specific use cases, like wallets very focused in a single ecosystem, like LeapWallet for Cosmos, for example.

We also found that 65% of the wallets analyzed have integrations that allow users to top up their wallets with a debit or credit card transaction, also known as offramping, using providers like MoonPay, Wyre, Transak, Ramp, and more.

And how can users access these applications?

Only 36% of the wallets analyzed offer a browser extension for users to access their wallets, a trend that was started by Metamask. However, these wallets are aware of the reach and easy-of-use of smartphones, so 78% of them offer a mobile app.

Then, for our last question, we analyzed how many of these wallets provide card-issuing services, and we discovered that only 9.3% of them are providing this kind of service, which may indicate a huge opportunity in the industry right now.

Our research also shows that almost 95% of these companies are focused on providing solutions for the end consumer, with just a minority focusing on enterprises.

The Web3 Wallets Market: Is there room for growth?

When we analyze Uniswap (the biggest Decentralized Exchange by volume) daily volume, we clearly see that users are not leaving this space and are actively using wallets to trade digital assets and participate in decentralized finance activities. From December 2022 until December 2024, we have 3 days where Uniswap volume was bigger than 6 billion dollars in traded volume, reaching more than $12 billion in March 2023.

Are Smart Contract Wallets the future?

One of the most interesting and exciting areas of development in wallets right now is the so-called Smart Contract Wallets. These wallets provide additional features when compared with “traditional web3 wallets”, such as recovery options, multi-signature requirements, and programmable transactions.

Two of the most important players in this field right now are Gnosis, which focuses on multi-signature access, and Argent, which focuses on the StarkNet ecosystem. Out of the 75 wallets analyzed, only 5 could be described as “Smart Contract Wallets”.

However, this number is likely to go up in the following years, since this trend is heating up and more users and companies are asking for different methods of recovery. Also, multi-signature is an important feature when we think about compliance and huge organizations.

On-Ramp Data: What can this tell us about wallet activity?

Using Arkham Intelligence, we spotted the addresses and got data from some of the biggest on-ramp crypto providers in the market, like MoonPay, Ramp, and Transak. This is a good proxy on how users are interacting with wallets and blockchains.

We analyzed in total 8 addresses that, according to Arkham Intelligence, belong to those entities. Also, for this research, we analyzed just data from the Ethereum blockchain and the period between 2022-01-01 and 2023-12-12.

Here are some hot takes:

  • Although we have some outliers, the sum of the transfer volume of these hot wallets consistently exceeds $2,000,000 per day throughout 2023. That number was almost below $ 2,000,000 from March until November 2022. Additionally, this value consistently surpasses $3,000,000 per day starting in October 2023.

  • The 7-day moving average indicates that the daily volume was very constant and stable during 2022. However, it has been increasing since November 2022 and got a boost since September 2023.

  • The total volume of transfers in these 8 hot wallets, from January 1, 2022, to December 12, 2023, reached $1,260,653,279.85, more than a billion dollars in less than 2 years.

This shows us that, although 2022 was a tough year for crypto, daily total transfers of these selected wallets were consistently above $ 1 million, and this amount started to increase at the end of 2022 and showed consistently high values in 2023.

We can also analyze how this money is moving. When we analyze just deposits made using these hot wallets, we have some interesting findings.

More than 90% of all deposits were related to Binance wallets, which indicates that users are using these third-party solutions to buy crypto and use them in centralized exchanges. This is a great indicator of how dominant Binance is as a centralized exchange in the crypto space.

However, if we exclude Binance, we can have more insights:

A lot of the transfers are related to centralized exchanges, such as Bybit, FTX (RIP), Bitmart, Mexc, and more. However, it’s interesting to note that 32.4%, or almost $ 21,000,000 of the deposits were related to Stake.com, a crypto-friendly betting website. Rollbit, another betting website, amassed almost $4M. If we take into account just betting websites, that would be almost $25 million in deposits.

Of course, this doesn’t represent the entire market, since we are analyzing just 8 of these wallets, but it’s overall a good proxy to understand what wallet users are spending their digital assets on and how they are cashing out, even if they need to use an intermediary for that.

Web3 Wallets: Where We Came From, Where We Are, and Where We Are Going

If some years ago the Web3 market was dominated by a handful of wallets, since 2017 the number of wallets has been growing. The features and offerings are also changing, from institutional wallets to consumer self-custody wallets focused on the “DeFi Degens”. We also see some of these companies trying to attach financial services, like card-issuing, into their offering, but as we saw, this number today is less than 10%, which indicates a huge market opportunity.

Although the US dominates the market, other players have been stepping up, like Switzerland and Singapore. Also, the market for Smart Contract Wallets seems promising, although the number of wallets that can be defined as that is still very low. However, we believe this number will grow exponentially in the next few years.

When we analyze Uniswap, the biggest Decentralized Exchange in the market, even during 2022, a widely known bad year for crypto, it reached more than $ 6 billion dollars in volume in just one day. The bear and bull market sentiments are very close to how many transfers users make using hot wallets, as we saw, transfers were stable during 2022, placed at $ 1,000,000 per day (number related to only the 8 selected wallets we analyzed). Even if we think that we are in a bear market, $ 1,000,000 per day is not bad at all. However, in 2023 this number started to grow, hitting almost $ 3 million dollars per day on average. These users are mostly sending money to exchanges (Binance is the dominant player), but are also using it for other purposes, like betting and gaming, in websites like Rollbit and the giant Stake.com.

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