MetaMask: The Hero Crypto Deserves

Agosti: Wallets do have virtuous cycles and network effects of sorts. Developers integrate with popular wallets, and developers build applications that attract users, making the wallets more popular. In an indirect way, developer adoption has been the main driver of growth for wallets like Metamask. Users don't download Metamask to use Metamask; th... See more

Would tokenizing make sense for MetaMask? It doesn't seem like a slam dunk. For one thing, MetaMask hasn't publicly articulated an explicit idea of what functionality a token would serve. Past discussions have apparently mentioned such a token allowing customers to upvote potential new features, called a "token-weighted backlog." According to Demar... See more

If ever there was a space growing fast enough to accommodate multiple winners, it is crypto. But though that dynamic means MetaMask won't fret too much about competition, the endemic nature of the blockchain makes switching to a new provider much simpler than it does in other industries. Because all of the data is stored on-chain, users can fairly ... See more

MetaMask's surge is not simply about usage — the company has also scaled revenue rapidly. In October of 2020, the team unveiled the "Swaps" feature outlined above. As mentioned, Swaps allow users to exchange their currencies, with MetaMask executing the transaction on a separate exchange. As payment for doing so, MetaMask extracts a 0.875% fee.

Competition is heating up. Right now, MetaMask is king. There are plenty of rivals gunning for the throne, though. Coinbase offers a wallet, and Block (fka Square) is likely to follow suit. Insurgents like Rainbow, Phantom, and Argent are not to be underestimated.

Agosti: If there are several chains with comparable market share (# of users, # of transactions), and these chains serve similar types of applications, then I believe that a multi-chain wallet is a better experience. If there is a significant difference between how the chains work, or the user-base of the chains, or the use-cases those chains provi... See more

Building defensibility is tricky. Because crypto wallets pull data from the blockchain, there is no user lock-in. In a matter of minutes, a user can switch from one wallet provider to another with no loss of data. That means providers have to find other ways to build defensibility. Winning over developers is one.

Crypto wallets are no longer niche. Three years ago, there were 31 million crypto wallet users; today, there are close to 80 million. While there’s a long way to go before web3 reaches its full potential, products like MetaMask are far from esoteric. It has 21 million users alone.

MetaMask is a big business. In 2021, the company surpassed $200 million in revenue. That is thanks to its "Swaps" feature, which allows users to exchange their cryptocurrencies without leaving the product.

Consumers have different expectations. Clients like MetaMask were built with developers in mind. That made sense given crypto's origins, but as less technical consumers start to dabble in web3, a higher premium is being placed on design.