Wallets are dead, long live wallets.
The death of seed phrases is upon us. There’s no question that the structure of early generations of wallets, like MetaMask, is clunky. Storing seed phrases and private keys are not intuitive steps—they are decades behind the seamless user experiences we enjoy on the internet today.
In Web2, it takes just seconds to sign up for a new application using single sign-on authentication. Users can click a single button to create an account via existing social media or Google credentials.
The industry has bridged this gap to some extent by enabling Web2 logins. Users can sign up using their Google account, and a wallet is spun up in the backend. This implementation, however, resulted in app-embedded wallets. For example, a wallet created on Hyperliquid can’t be used to trade on Uniswap. We sacrificed composability for smoother onboarding.
Wallets needed to evolve. We needed wallets that could do both—offer seamless onboarding and composability. Thankfully, a new generation of wallets, like @usecapsule, does just that. You can spin up a wallet using Web2 credentials and use it across multiple apps. Capsule also allows biometric identification by tapping into passkeys.
Passkeys are a cryptographic authentication method that replaces the need for passwords. They enable the use of biometrics or devices for authentication, like FaceID or a PIN on your device. Similar to crypto wallets, passkeys operate with two keys: a private one that stays secure on your device and a public one that’s shared with the website or app to authenticate the sign-in.
In the context of crypto, passkeys eliminate the need to memorize seed phrases. You can use FaceID to confirm a transfer or your fingerprint to start trading on a DEX. They also make account recovery possible, further streamlining onboarding and enhancing the overall user experience.
MetaMask has 30 million users, while social media platforms boast 5 billion users. Tapping into that user base and leveraging crypto primitives opens up a design space for entirely new applications and experiences.
For example, a fitness app could spin up wallets and pre-load them with NFTs that offer discounted subscriptions to top fitness influencers on Instagram. Or consider a use case like @rdatadao, run by Commonwealth, which gives points and voting abilities to users who port their Reddit data to be used for training Large Language Models.
Tools like Capsule bridge the gap between the market that exists today and the one that could emerge in the next decade. It’s the beginning of the end of seed phrases, and that makes us optimistic about the future.
Full piece in the link below.
The death of seed phrases is upon us. There’s no question that the structure of early generations of wallets, like MetaMask, is clunky. Storing seed phrases and private keys are not intuitive steps—they are decades behind the seamless user experiences we enjoy on the internet today.
In Web2, it takes just seconds to sign up for a new application using single sign-on authentication. Users can click a single button to create an account via existing social media or Google credentials.
The industry has bridged this gap to some extent by enabling Web2 logins. Users can sign up using their Google account, and a wallet is spun up in the backend. This implementation, however, resulted in app-embedded wallets. For example, a wallet created on Hyperliquid can’t be used to trade on Uniswap. We sacrificed composability for smoother onboarding.
Wallets needed to evolve. We needed wallets that could do both—offer seamless onboarding and composability. Thankfully, a new generation of wallets, like @usecapsule, does just that. You can spin up a wallet using Web2 credentials and use it across multiple apps. Capsule also allows biometric identification by tapping into passkeys.
Passkeys are a cryptographic authentication method that replaces the need for passwords. They enable the use of biometrics or devices for authentication, like FaceID or a PIN on your device. Similar to crypto wallets, passkeys operate with two keys: a private one that stays secure on your device and a public one that’s shared with the website or app to authenticate the sign-in.
In the context of crypto, passkeys eliminate the need to memorize seed phrases. You can use FaceID to confirm a transfer or your fingerprint to start trading on a DEX. They also make account recovery possible, further streamlining onboarding and enhancing the overall user experience.
MetaMask has 30 million users, while social media platforms boast 5 billion users. Tapping into that user base and leveraging crypto primitives opens up a design space for entirely new applications and experiences.
For example, a fitness app could spin up wallets and pre-load them with NFTs that offer discounted subscriptions to top fitness influencers on Instagram. Or consider a use case like @rdatadao, run by Commonwealth, which gives points and voting abilities to users who port their Reddit data to be used for training Large Language Models.
Tools like Capsule bridge the gap between the market that exists today and the one that could emerge in the next decade. It’s the beginning of the end of seed phrases, and that makes us optimistic about the future.
Full piece in the link below.
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