2024 EDITION

The
WalletConnect
Pulse
Crypto Consumer Sentiment & Usage

Contributions from:
02 | Table of Contents

Table of Contents

About WalletConnect Dapp Usage

About WalletConnect Pulse Insights from Rarible

Insights from the Founder

Foreword from the Founder
Insights from dYdX
Executive Summary
User Security
Insights from Ledger
Insights from the CTO
Wallet Usage
Future Outlook
Insights from Safe
Insights from the CEO
Insights from OKX
Insights from 1kx Glossary
03 | About WalletConnect

About WalletConnect
The connectivity
unlocking the future
of web3.
WalletConnect is the web3 communications protocol enabling
interoperability between wallets and dapps across chains. Having been
integrated by over 500 wallets and 6,000 apps, it facilitates millions of
end-user connections each month. Today, it is also empowering
developers to build engaging web3 experiences with a suite of SDKs:
Web3Modal, Web3Wallet, and the recently launched Web3Inbox app that
facilitates human-readable message delivery between apps and users.

To learn more, please visit walletconnect.com.

04 | About WalletConnect Pulse

About WalletConnect Pulse

The WalletConnect Pulse: Crypto Consumer Sentiment & Usage report
examines the attitudes, behaviors, and preferences of today’s crypto consumer.
To uncover these insights, an anonymous crypto consumer survey was
conducted in partnership with YouGov, the market research and data analytics
firm, with respondents from both YouGov’s panel and the WalletConnect
community. 

This study collected 477 online survey responses across the US and the UK from
January 23 - February 6, 2024. In order to qualify for the survey, respondents
had to be at least 18-years-old and have a wallet. We further reduced the sample
set to remove those who initially indicated they had a wallet but later in the
survey indicated they did not have a wallet. This left us with 299 responses.

In evaluating survey respondents’ satisfaction with web3 products and services,

we utilized Net Promoter Score (NPS) methodology in this report. Using a scale
spanning from “Extremely Dissatisfied” to “Extremely Satisfied” with five
options, we calculated scores by subtracting the percentage of detractors from
the percentage of promoters. This approach ensures clear and concise
interpretation, enabling easy comparison of insights among participants.

Gender Country US (Age)

18-24 36.7%

56.2% 43.8% 54.5% 45.5%

35-54 32.2%

55+ 31.0%

Male Female US UK

UK (Age)

I’m extremely familiar with crypto;

19.7%
18-24 11.5%
both know and try the latest tech
25-34 20.9%
I’m familiar with crypto and explore 32.1%
dapps when I have the time
35-44 15%
I’m not familiar with crypto and 34.4%
trying to learn 45-54 18.4%

I’m not familiar with crypto, 


nor am I that interested
12.4% 55+ 34.2%
05 | About WalletConnect Pulse

Crypto Consumer Profile

z
To gain deeper insights beyond our overall survey participants, we analy ed specific subgroups

—recent wallet, Dapp, and web3 users—exploring variations within our consumer data.

Defined as Defined as having

having created used more than two

their first crypto wallets in the last

wallets since three months and

2023. as actively hunting

for new crypto

experiences.
9%
The The

Newbie Cryptonaut 8%

Defined as users Defined as

who’ve engaged having bought,

with DeFi in the traded, or sold

last three NFTs in the last

months. three months.

11% 19%
The DeFi The NFT

Degen Ner d

Defined as those Defined as those

who have used who have

web3 social and bought, sold, and

community apps
 traded in the last

in the last three three months.

months.

46%
The 10% The Tra der
Socialite Type

v 50% of respondents are active users that explore the latest tech and Dapps, 34%
While o er

said they are not too familiar but keen to learn more. Now, let's delve into the data, exploring the

habits and preferences of these unique crypto personas.

Disclaimer

This material is for informational purposes only. It should not be relied on to provide legal, tax, financial, investment, or

other types of advice. We do not guarantee or warrant the accuracy, completeness, timeliness, suitability, or validity of

the information in this report and will not be responsible for any claim attributable to reliance on or errors, omissions,

or other inaccuracies of any part of such material.

06 | Foreword from the Founder

Decoding the crypto

consumer landscape

Pedro Gomes

Founder and President, WalletConnect

It’s unbelievable but true: crypto – as a market, as an industry, as a diverse set of

ecosystems running on different blockchains – is not even 15 years old. Yet, in
such a short period of time, it has contributed new ways of thinking and
innovation to match. A paradigm shift is taking place, in real-time. 

That’s what we, the builders, believe. That’s also what we see. Bull and bear
market cycles aside, adoption is trending up. But unlocking the goal of
mainstream adoption requires that we understand what the crypto consumer –
the end user we are building for – feels and thinks, too.

We have our gut feeling as to what the opportunities are. From web3-native
communications to blockchain-enabled gaming to simpler, safer wallets, 

there’s a significant focus on making crypto more user-friendly, intuitive, and also
delightful. DeFi remains the king of crypto use cases, but bringing in a greater
spectrum of users will require a broader range of sticky, feature-filled
experiences.

We also all have our hypotheses on the pain points in today’s crypto experience.
The process of setting up a wallet, with confusing concepts like seed phrases
and the words of caution that come with it, can be a daunting task. The fear of
being phished must be omnipresent, with stories of scams and hacks constantly
occupying the headlines. These issues, along with many others, are surely
putting the handbrakes on broader crypto adoption.

But a gut feeling or a hunch will only get us so far. As builders ourselves, we at
WalletConnect sought to understand the current crypto experience from the

eyes of the consumer. What do they think about the current wallet experience?
07 | Foreword from the Founder

What are their favorite kinds of dapps? What do they want from crypto – and
what is blocking them from doing more?  

These are important questions, and we’ve uncovered some incredible insights.
While the majority of users don’t feel safe interacting in web3 because of
widespread experiences with scams and seed phrase loss, they are
undoubtedly intrigued by the space. This intrigue is fuelled by a desire for a new
breakthrough — a new use case, greater functionality, something that can take
this niche hobby mainstream.

The report also highlights perspectives from leading wallets, apps, and investors
on their thoughts for the current and future state of consumer crypto. Ledger,
dYdX, Safe, OKX, Rarible, and 1kx have shared their thoughts on seed phrases to
smart accounts, social to self–custody, and sovereignty to security. We’re
grateful to have them as part of the growing WalletConnect ecosystem that
today includes over 500 wallets and over 6000 apps. 

What’s clear is a desire on the part of the consumer for more interactive, secure,
and compelling crypto experiences. WalletConnect’s mission is to help
developers build engaging user experiences that can accelerate the growth of
16%
their apps and wallets. We hope that these insights will provide the
understanding and fuel for you to seamlessly innovate the future of crypto.

“ WalletConnect’s mission is to help

developers build engaging user experiences
that can accelerate the growth of their apps
and wallets.”
08 | Executive Summary

Executive Summary
The current state of web3 presents a paradox: while a
majority of users express hesitancy due to security
concerns and lack of understanding, there remains a
strong and growing interest in the space. Despite the
industry's dynamic and fluctuating landscape, the
resilience in sentiment is noteworthy. People are
increasingly optimistic and bullish about the potential of
web3, indicating exciting times ahead. This report aims to
dissect the findings from a comprehensive survey to
uncover nuanced consumer profiles, wallet preferences,
and aspirations for the future of crypto.

Key Takeaways

As we witness the approval of Bitcoin ETFs and an increased interest in

stablecoins early in the new year, an upswing in awareness and curiosity about
web3 seems inevitable. Amidst this, we anticipate a growing demand for web3-
native products and services. If developers are looking to drive greater adoption
of these web3 products and services, they must:

Build innovative yet familiar experiences that can appeal to wider audience

Consistently improve safety features while bridging the security-adoption ga

Simplify transitions for users by removing complexity and using consumer-

friendly language
09 | Executive Summary

Key Findings

>50%

of respondents express a
high level of confidence
using crypto products and
Yet, only 27% regularly use added security measures,
and 6% acknowledged neglecting to add them. 

Our survey findings emphasize the need educate
educate users on existing security measures,
addressing both their desire for heightened security
services
and potential implementation barriers.

40%

of respondents are willing

to explore new features if
they come their way

16% actively seek new web3 experiences, emphasizing

the need for creators to craft a dual strategy:
integrating innovation to attract proactive users, while
maintaining a user-friendly approach. This unlocks
valuable web3 attributes, including fractionalized
ownership and having a stake in digital products.

Top 3 crypto experiences consumers are looking for

35%
NFTs
32%
Web3 social and
messaging*
28%
Community and
governance models

*Our most web3-active survey participants chose “Web3 social and messaging” as their top pick.
10 | Insights from Ledger

“If not self-custody, why

crypto?” — bringing PKI to
billions of internet users

Ian Rogers


CXO, Ledger

I started my life on the Internet in 1990. What immediately attracted me was the

ability to communicate ideas globally, without a publisher or editor required.

Ideas and creations could spread on their merits through like-minded

communities. I saw this possibility for art such as music, and spent twenty years

working on tools and platforms to serve the only two pieces of the music value

chain that matter, artists and listeners, at Winamp, Yahoo!, Topspin, Beats, and

Apple.

16%

Bringing a consumer Internet to more than five billion people required a level of

centralization. What Apple and Google have achieved with an easy-to-use, “just

trust us” experience allowed billions of people to join “The Network States” and

empowered a new global economy. It's also left humanity vulnerable, with

identities centralized in the databases of relatively few companies. Ask any of the

increasing number of people who have had their iCloud stolen – each of them

will tell you they didn't realize how digital, centralized, and therefore vulnerable

their lives had become until it was too late. So many humans are vulnerable

today and won't realize it until rekt. 

Without decentralization we cannot have security. If you don't believe this please

tell me whose centralized database you are comfortable holding humanity's

data. Facebook? The United States? China? Apple? Google? 


I haven’t met anyone with a confident answer to this question, yet this is the

Internet we live and work on today.

Private Key Infrastructure (PKI) is crucial to this decentralization. To have

sovereignty online, users will need to be the stewards of their private keys.
11 | Insights from Ledger

With this, the Internet can move from “username/login” (Web 1), past “login with
Facebook/Google/Apple” (Web2), to “connect your wallet” (Web3). Think about
where we are today – 5.35B Internet users, 5B Social Media users, 500M crypto
users, yet only 10M users holding their own private keys in a secure wallet
solution. This is the real battle we are all fighting. If not self-custody, why crypto? 

In each bull run, new crypto or blockchain-focused companies compromise on

self-custody, security, or both. Each time they have a very rational explanation for
why this compromise is necessary, usually related to usability and “onboarding
the masses.” Each cycle results in users getting rekt and broad distrust in the
ecosystem. Little is as predictable.

“ To have sovereignty online, users will need to

be the stewards of their private keys.”

16%
Wallet Usage
13 | Wallet Usage

Wallets serve as the gateway for users to interact with the crypto space,

managing their assets, executing transactions, and engaging with decentralized

applications (dapps). Analyzing wallet usage data allows for a deep dive into how

consumers interact with their digital assets, their preferences for specific

features, and the challenges they face. This valuable information empowers

developers, businesses, and stakeholders to tailor products and services,

enhancing user experiences and driving broader adoption of cryptocurrencies.

Let’s dive into the findings:

Most consumers created their first wallet

between 2020 and 2022. 33.4%

Before 2017 15.1%

2017-2020 33.4%
26.4%

2021-2022 26.4%

2023-2024 9.4%

16%
Not Sure 15.7%

The pandemic played a pivotal role in propelling crypto into unprecedented

mainstream recognition, with the market briefly reaching over $3 trillion in

value in November 2021. Bitcoin and Ethereum achieved all-time highs, while

meme-inspired assets like Dogecoin gained significant popularity. NFTs were

sold for millions (think Beeple), contributing to a market with over $23 billion in

trading volume. Looking at download figures from several web3 apps like

Coinbase, Blockchain.com, Metamask, Trust, and Binance, among others,

Statista data shows that crypto wallet downloads even hit an all-time high

during that timeframe.

14 | Wallet Usage

59.5% only had one wallet while 5% had more than 5.

Looking more closely, we see that users in more active user groups were more

likely to have 2 or more wallets: 55% of Trader Types said they had 2 or more

wallets, compared to 57.6% for DeFi Degens, 65.5% for Socialites, and 66.1%

for NFT Nerds. In contrast, only 31.2% of Newbies had more than one wallet.

Number for wallets

How many wallets do you How many have you used in

currently have? the last three months? 


(users with 2-5 & >5 wallets)

28.3
0

11.7 1

2-5

59.5 35.1 4.2

> 5

9.2
Others

Not Sure
46.7

5.0

0.3

Many consumers have several wallet addresses,

41%

but they don’t

41%
use them all.

All signs suggest that consumers are inclined towards an all-in-one approach,

desiring wallets that provide additional features and interoperability, eliminating

the need to leave the app to get more things done.

Among those people with 2 or more wallets:


12% hadn’t used them at all in the last three months, and 28% said they’d only

used one in the last three months.

14% of our Trader Types had more than 5 wallets, but only 7% of them had

used more than 5 in the last three months.

15 | Wallet Usage

Why have multiple wallets?

The most common reason was using different wallets for different networks and

chains, highlighting an opportunity here for wallets to support multiple chains to

retain users.

32.8% of respondents with 2 or more

wallets said they had multiple wallets for

security reasons.

72.7% DeFi Degens and 80% Socialites said they use multiple wallets for

security reasons.

Mobile wallets top choice for most, except the crypto-savvy

Mobile wallets were the top wallet of choice for most respondents

22%

Over 54.8% selected mobile

while only 7% chose

hardware wallets as their

41%

preferred wallet type.

26% of Cryptonauts chose hardware as their

favorite wallet type.

16 | Insights from Safe

We won’t get to 1b+ digital

owners without a rapid
improvement to web3 UX

Lukas Schor

Co-founder, Safe

People don’t want to be “onboarded” to crypto – our lives are too busy.
Streamlining the transition to web3 is crucial in a world where people ignore
anything that isn’t simple and seamless enough. The post-FTX crisis landscape
has been pivotal, shifting the industry’s focus toward accessibility and scalability
conversations. Industry leaders like Vitalik Buterin have called for the transition
to smart accounts to improve usability and ensure the industry's long-term
survival.

16%

For the crypto community, 2024 must be the year to conquer the main barrier to
adoption — user experience. Expecting a billion users to onboard without
efficient and user-friendly UX is akin to anticipating a global shift to electric cars
without developing accessible charging infrastructure.

Seed phrases and accessibility

We will not unlock digital ownership for the masses with clunky hardware and
complicated seed phrases, especially when users are accustomed to seamless
entry with FaceID to access digital banking apps. Users must currently choose
between securing a complicated seed phrase or selecting a third-party custodian,
hindering autonomy. Smart account-enabled Passkeys will be a significant
catalyst in making self-custody more feasible and user-friendly for the masses.

Recovery models and hybrid custody

In the current crypto landscape, there’s a common belief that our custody
choices are binary: either rely on a centralized custodian and face risks like a lack
17 | Insights from Safe

of transparency and possible misuse of assets, or navigate the complex realities

of self-custody with Externally Owned Accounts, which carry the risk of a single

point of failure due to private key vulnerabilities. 

To address this dichotomy, it is essential to recognize that the existing offerings

do not adequately cater to users' diverse needs and preferences. As such, Safe

has coined the term “hybrid custody,” combining the control of self-custody with

some of the safety nets often found in centralized systems. Users have their

primary keys but benefit from trusted fallbacks for account recovery, transaction

security, compliance, or other high-risk actions.

Tools such as Safe{RecoveryHub} utilize designated recoverers, including

personal backup devices, friends, or collaborators, to provide “social recovery”.

Recoverers are given control by the users only in the case of a recovery event in

order to recover user access. This ensures privacy as users retain full control to

cancel any recovery attempt at all times.

Social logins bring web2 UX to web3

With most people accustomed to web2, social logins for wallets create familiar

access points for new web3 users, increasing usability. Therefore, providing
16%
entry to crypto through familiar login methods, such as Google’s sign-in

platform, simplifies crypto accessibility. 

While compromise on some security options and decentralization is necessary,

benefits are associated with ease of access and UX. This “trade-off” is a big step

for the industry in enabling choice, allowing users to experiment with DeFi. It

encourages newcomers to understand the system through increased

accessibility, providing access to advanced security, key management, and

credentials.

2024: The year of UX

The stage is primed for 2024 to be a breakout year, with the crypto economy

preparing to onboard the next billion users. However, we must remember that

most newcomers are more familiar with online banking interfaces than crypto

exchanges. Not only do we need to shift our focus to improving platforms and

ensuring their comprehensiveness, but we must also focus on features that will

improve UX and highlight smart accounts as a more customizable option.

Undoubtedly, this involves supplying newcomers with choice above all else.
18 | Wallet Usage

Security and user experience remain top of mind.

To identify top wallet provider preferences, we asked respondents to select their
top three considerations. Results varied very little across groups with 

user-friendliness, security, low fees, and broad network support being
important across the board. Nevertheless, it's important to highlight that
customer support emerged as a significant factor for Newbies.

User-friendly experience Low transaction fees

56.5% 46.4%

64.3% 33.3%

33.3% 44.6%

55.4% 34.5%

55.2% 54.3%

70.7%

Broad cryptocurrency and

network support
Advanced security measures
39.1%
73.9%
39.4%
64.3%

36.4%

53.6%

62.1%
Customer support

60% 35.7%

The Cryptonaut The Newbie The DeFi Degen The NFT Nerd

The Socialite The Trader Type

19 | Wallet Usage

Different user groups also experienced different problems

with their most frequent wallets.
26.1%
Getting started is
17.4%
I do not feel
14.4%
There aren't that
difficult and poorly protected from many features
explained scams and phishing

13%
The problem is not
12.7%
Too few networks
10.4%
The experience is
with the wallet but and tokens are not user-friendly
the gas fees supported

While 17.4% say their biggest problem is related to security concerns, this
number rose to 28.6% when just looking at hardware wallet users versus 15.2%
with mobile wallet users. Meanwhile, 30% of Cryptonauts said their biggest
problem was “not with the wallet but with the gas fees,” and 24% of DeFi
Degens said their biggest problem was a lack of features.

Chart of which wallet providers they had used

100
Coinbase Wallet.com or Coinbase app

90
80
70
Bitcoin.com Wallet

60
Coinbase Wallet
Binance App

Crypto.com App

Crypto.com Defi WAllet

Binance Web3 Wallet

50
Trust Wallet

40
Meta Mask

31.8
Uniswap Wallet
SafePal Wallet

28.4 26.1
Bitget Wallet
OKX Wallet

TokenPocket

30 24.4 23.7 23.1

Ledger
Others

20 15.4
9.4 9.0 8.0 7.4 6.4
10 6.0 5.4 4.3 4.0
%

While Metamask was not the wallet used by most survey respondents, WalletConnect data over the past
two months shows that Metamask is dominant among our users. Over the past six months, our data shows
Metamask and Trust have similar usage within the WalletConnect network.
20 | Wallet Usage

How can we improve wallet satisfaction and increase

wallet usage?

Choosing from multiple responses, all survey participants said that the top

reasons to use their wallet more frequently were:

51.2% 42.1% 41.8% 41.8%

More user- More security More incentives Lower gas and

friendliness features (like like points transaction fees

phishing warnings)

The outlier subgroup was the DeFi Degens with 48% saying they look to be

incentivized from their activity with points while 39% want more features like

wallet messaging and DeFi. DeFi Degens are also less worried than the average

participant about user experience (30.3% vs. 51.2%).

NFTs will continue to revolutionize consumer experiences

“ by becoming distribution platforms for both digital and physical

products and services. This will be possible thanks to the large amount

of new infrastructure that was built during the bear market. From easy-

to-deploy non-custodial wallets to new Layer 2s with low transaction

costs, the technological landscape has greatly improved over the last

two years enabling better experiences both for builders and

41%
consumers. In 2024, I also expect NFTs to become supercharged

versions of cookies, used to document every digital interaction among

people and with brands. The hypertokenization of the consumer

economy via NFTs will enable creators and IP-owners to take true

ownership of their relationship with their clients and supporters. By

tokenizing social graphs, NFTs will unlock new dimensions in digital

interactions and provide a better understanding of the breadth and

41%

depth of the connections between creators and fans.”

Sergio Silva


Senior Director - web3, Fireblocks

41%
21 | Insights from OKX

Smart Accounts: A path for

better user experiences
Jason Lau

Chief Innovation Officer, OKX

At OKX, we recognize the transformative potential of new standards like

ERC-4337, revealed at WalletCon 2023, and how it can enable better user
journeys. Smoother experiences remain a top priority if Web3 and decentralized
finance are to gain adoption.

Smart Accounts are our implementation of ERC-4337 in OKX Wallet and an

important step toward a better Web3 user experience. One area we focused on
solving was the experience and frustration of using native tokens to pay for gas.
16%
Whether it's due to a lack of native tokens or unfamiliarity with gas costs, users
faced high friction when performing transactions. 

With Smart Accounts, we are able to simplify the experience by having gas
payments be paid via stablecoins or even be paid for entirely by a third party. A
much-needed improvement that we are actively inviting users to try out. As an
example, OKX Wallet recently partnered with Circle to reimburse users' gas fees
paid for in USDC in their Smart Account. 

While we are among the first to integrate Smart Account functionality into our
self-custodial OKX Wallet, there is still a lot of work to do. Interoperability and
usability remain hurdles. 

Looking ahead, we are excited about new features like account recovery, or
leveraging batch transaction capabilities to shape simplified user flows. And,
we recently worked with the community to propose the ERC-7579 standard,
which will further enhance interoperability, especially between different
wallet providers.
22 | Insights from OKX

Ultimately, community collaborations, like ours with WalletConnect, are

extremely important to further develop Smart Account standards that will lead to
a seamless Web3 user experience industry-wide. We eagerly look forward to
working with the developer community on this - please feel free to reach out to
me @jasonklau on X.

“ Community collaborations, like ours with

WalletConnect, are extremely important to
further develop Smart Account standards that
will lead to a seamless Web3 user experience
industry-wide.”

16%
23 | Wallet Usage

Smart contract wallets are a special kind of digital wallet

for cryptocurrencies that use smart contracts, which are self-executing

agreements on a blockchain. These wallets can automate tasks like making

transactions and setting spending limits. Interest in smart contract wallets

is continually increasing, often due to factors such as stronger security

models, more control over funds, and the ability to create innovative

financial applications without relying on traditional banks. In simpler terms,

they're user-intuitive wallets that can make managing and accessing your

digital assets easier and more secure. Programmability and automation

features make smart contract wallets a key element in the evolution of DeFi

and the broader blockchain ecosystem.

(See Glossary section for more)

78% of respondents are unfamiliar or uncertain about "smart contract wallets,"

despite it being considered a developer hot topic.



Smart accounts? Smart contract wallets? Account abstraction? Whichever term

resonates with you, chances are, consumers are unfamiliar with it.

Have you heard of smart Unsurprisingly, 85% of Newbies

contract wallets? have not heard of smart contract

wallets or are not sure what they

30.1%
48.2%
are. 24.5% of Cryptonauts already

use one, and 36.7% say they are

looking forward to using one. 


DeFi Degens, NFT Nerds, and

Socialites were likely to have

12.7% heard about them but weren't quite

sure what they were. This points to

8.4%
the need for educating even
0.7%
regular crypto users about the

No, what’s that? I already use one Other

potential benefits of smart

Yes, but I’m not sure what it means. contract wallets.

Yes, and I’m looking forward to using one.

24 | Wallet Usage

Lost access to your wallet?

Allowed to choose from multiple options, over 40% of respondents said they

lost access to their wallet due to either a malware or phishing attack; a lost

seedphrase or password; or, a lost or damaged hardware wallet.

Yes, I lost my seed phrase or Yes, I lost or damaged my

password. hardware wallet.

19.1% 14.4%

34.8% 26.1%

36.4% 39.4%

Yes, I lost access due to malware or No

a phishing attack.

11% 59.5%

17.4% 43.5%

12.1% 27.3%

All Respondents The Cryptonaut The DeFi Degen

It appears that there's still a considerable journey ahead to ensure users' funds

are truly secure, underscoring the necessity for enhanced recovery solutions

and alternatives to seed phrases.

25 | Insights from 1KX

The future crypto consumer

experience: dynamic,
engaging, and meaningful
Peter Pan

Partner, 1kx

Technology alone doesn’t signal a paradigm shift; it’s what people do with it that
demonstrates real, multi-dimensional value.

If we take that as a measure, then web3 is entering its transformative era. On the
back of new, open, and global-from-the-get-go infrastructure, an Internet-native
economy and culture is coming to the fore, shaped by digital natives that simply
16%
want — and want to do — more.  

This engagement desire and expectation is the fuel behind a new crop of ideas
and innovations. As the crypto engine revs up once again, digital consumer
experiences are about to get hit with some fresh excitement.

Share and engage to build

In a way, the development of the Internet has been driven by the desire for
shared experiences that overcome the boundaries of space and time. With
crypto, these shared experiences are entering a new dimension, with new
avenues to participate, own, contribute, and monetize.  

At 1kx, we believe that digital property rights enable new social expressiveness.
Creation, participation, ownership, and sharing — these are powerful
expressions and notions that are underpinning this fast-growing digital
landscape. Systems and culture go hand-in-hand, and we’ve seen crypto make
its imprint on community and experience.
26 | Insights from 1KX

But there is more room to play. As the number of onchain apps, content, and
creators grows, there is a need for new, more immersive, and more tailored
social spaces. From onchain activity feeds that become the emergent discovery
layer for content, creators, and social to apps where collecting and owning is the
core game loop, the opportunity is ripe to disrupt community mechanisms once
again.

NFTs are far from their last gasp, too. They remain an important tool that
empowers creators and projects to monetize and build stronger communities.
The number of non-financially collected NFTs is growing, an encouraging sign
that ownership is being deployed and perceived in an increasingly multi-faceted
manner.  

Dynamic NFTs are also entering the scene to kick things up a notch. Up until this
point, most NFTs have been static assets. That’s about to change with this new
generation of NFTs, which allows for appearance, state, or metadata to change,
either programmatically or through end-user interaction. As a result, onchain
assets have the potential to be turned into recurring channels of attention,
opening up a whole new method of engagement. For more on this exciting
frontier, read my colleague Nichanan Kesonpat’s excellent write-up, “Exploring
16%
the Design Space for Dynamic NFTs”.

Pioneering a digital renaissance

Crypto and blockchain provided an opportunity to re-think and re-imagine what
the digital end-user experience could be — and it’s not done, either.

The last few years have scratched the surface of what’s possible. With the
innovations coming down the line, web3 brands and projects have the
opportunity to create deeper and more meaningful consumer experiences. 

The future is bright with white space for experimentation. The advent of a truly
digitally-native era is here.

“ On the back of new, open, and global-from-

the-get-go infrastructure, an Internet-native
economy, and culture is coming to the fore.”
Dapp Usage
28 | Dapp Usage

Dapps are integral to user interaction, and analyzing this data provides unique

insights into user experiences, enabling targeted improvements and driving

wider adoption.

From stablecoins to NFTs, how crypto ownership

impacts Dapp usage.

Navigating the diverse landscape of crypto ownership, our data shows

interesting insights into the possession of stablecoins and non-fungible tokens

(NFTs) among respondents. 

20% of total respondents currently own stablecoins

65% of Cryptonauts own stablecoins

It’s also interesting to gauge NFT interest, especially years after the NFT hype

of 2021 when single asset prices skyrocketed, with the likes of Beeple’s

‘Everydays: The First 5000 Days’ NFT selling for a soaring $69.3 million.

Though valuations have certainly steadied, sustained curiosity in this sector

suggests a lasting fascination with the broader applications and possibilities of

NFTs in the digital space.

19% of total respondents currently own NFTs

A deeper examination exposes higher NFT ownership percentages within

specific subgroups

61% for Cryptonauts

49% for DeFi Degens

44.6% for NFT Nerds

This ownership trend is particularly relevant as we transition into exploring Dapp

usage, where user engagement and preferences play a pivotal role in shaping

the crypto experience.

29 | Insights from Rarible

Democratizing digital
ownership
James Richard Fry

Senior Marketing Lead, Rarible

Our lives are changing before our eyes, the world is evolving, and a new digital
era is certainly upon us. With AI advancements accelerating at light speed, digital
currency seeing a new and seemingly more sustainable resurgence, and
blockchain technology evolving in ways we’ve all been dreaming of, there’s just
no arguing it.

The concept of ownership is a fundamental pillar of society. In many ways, it

always has been, but in this digital era, there’s a shift here that brings a new sense
of hope for what ownership might mean for the masses. 16% Individuals are growing
weary of being renters in every aspect of their lives. Home prices, car prices, and
education prices all skyrocketing at unprecedented rates has led to an
exhausting reality – the very concept of ownership is slipping through our fingers.

We need a revolution.

There is massive potential in the power of the blockchain, not just as a

technology, but as a transformative movement that redefines the essence of
digital ownership, interaction, and creativity. And there is a revolution brewing.
Beneath the PFPs, artwork, and airdrops, there’s something more that is
resonating within the web3 community. As cliche as it might sound, we are all
very early. Not just early adopters, but early experimenters, learning and
testing what the boundaries of true decentralized ownership could mean on a
greater scale.

NFTs as we know them today are being used in just a fraction of the real use
cases we’ll see in the coming years. In the future these tokens will be an integral
part of everyday life, as common as emails, representing not just assets, but also
a new language of value, ownership, utility, and identity.
30 | Insights from Rarible

It’s true that this shifting paradigm comes with many pain points. We have an
uphill battle in facing a major education hurdle, continual needs for better user
experience, for easier onboarding… the list goes on and on. But if you’re reading
this, then you are likely in the same camp as many of us in web3. We’re builders.
We aren’t afraid of being at the forefront of the wilderness, blazing a new trail.
And we’re quite seasoned at what it means to do the legwork so that others will
have an easier path. It’s what we do.

“ This revolution isn’t just for the “degens”.


It’s a revolution for everyone. And it has the
potential to change everything.”
Most importantly, this revolution isn’t an optional one. It’s a critical movement
that has the potential to democratize the very idea of ownership at the deepest
level. It’s a revolution that isn’t just for the tech-savvy or the early adopters, but
rather a revolution for the masses, for the everyday members of society, for the
“normies” who deserve a chance at the hope of true ownership.


16%

So where does that leave us as we look forward to what 2024 brings the space?
Many called last year “Layer 2 Summer”, but as the market continues to gain
momentum, so will the demand for faster, more efficient blockchains integrated
into marketplaces across the ecosystem. The next wave of Layer 2s and Layer 3s
will make “Layer 2 Summer” look like a warmup drill. For good reason too,
because in order to truly democratize ownership for the masses, we must
improve infrastructure to support the influx of volume that will come along with
this revolution. Only then will we be ready to help the world fully embrace what is
possible.

This revolution isn’t just for the “degens”.


It’s a revolution for everyone.

And it has the potential to change everything.
31 | Dapp Usage

From inactivity to enthusiastic participation.

All respondents
Delving into user engagement across 7.4%
various segments, our survey shows 22.4%
that over 25.8% of total respondents 20.7%
claimed to not “normally use crypto
22.1%
products or services.”
25.8%

The Cryptonauts
O ver 74% of Cryptonauts, the most 43.5%
active users, claimed to be using 30.4%
crypto products or Dapps once a 8.7%
week or more.
13%

4.3%

The NFT Nerds

Coming in second are the 12.5%
NFT Nerds, who said that 41.1%
over 53% use dapps once 28.6%
per week or more.
10.7%

7.1%

The Newbies
Meanwhile, it appears there's 10.7%
room for improvement in retaining 3.6%
the interest of Newbies, as only 32.1
3.6% said they are utilizing apps
28.6%
once a week or more.
21.4%

Every day Once a week Once a month Once every few months

I don’t normally use crypto products for services

32 | Insights from the Founder

Standards set the scene for

wallet innovation: What's Next?
Pedro Gomes

Founder and President, WalletConnect

In the fast-paced world of web3, where innovation seems to occur at breakneck

speed, standards quietly play the role of the slow burn behind wallet innovation.
As the Founder and President of WalletConnect, I've witnessed firsthand the
evolution of Ethereum's wallet user experience since 2017. Ethereum, with its
open and diverse ecosystem, presented challenges in crafting a seamless user
experience that aligns with the ethos of decentralization. 

The solution? Standards that bring wallets together and ensure a consistent,
interoperable experience, laying the foundation for16%
future innovations.

In any thriving ecosystem, consistency and interoperability are paramount.

Standards provide the scaffolding upon which innovation can flourish, acting as
the glue that binds disparate elements together, fostering collaboration and
ensuring a user-friendly experience that doesn't rely on proprietary solutions.
This not only facilitates seamless interactions within the decentralized world but
also creates an environment where users, regardless of their level of technical
expertise, can engage with blockchain technology in a manner reminiscent of
familiar web2 experiences.

Ethereum wallets with EIP-3074 and EIP-6963

Introduced in 2020, EIP-3074 holds the promise to become a transformative
force, potentially reshaping the user experience by addressing critical aspects of
wallet functionality. While discussions have surrounded its potential impact, the
current prominence of EIP-3074 reflects ongoing conversations rather than
concrete implementations, other than Polygon expressing interest and adopting
elements of the standard. This marks the first evidence that EIP-3074 might gain
traction and be adopted in other places, shedding light on its potential to
33 | Insights from the Founder

simplify the wallet experiences for broader user accessibility and streamline the
verification process to create a more user-friendly authentication experience.
However, it's essential to acknowledge its pending status.

Meanwhile, EIP-6963 recently marked a significant milestone, achieving final

status as an Ethereum Improvement Proposal. This proposal, addressing the
challenges of browser extension wallet conflicts, introduces Multi Injected
Provider Discovery, allowing multiple wallets to coexist seamlessly. Such
advancements exemplify the collaborative spirit driving web3 innovation and the
continuous pursuit of enhanced user experiences.

“ Standards are the silent architects of wallet

innovation.”

More standards with game-changing potential

While these standards have made waves, I recently shared on X my favorite
Ethereum wallet standards, including EIP-1271 – which
16% I like to call the “Power of

Attorney” in Smart Accounts. EIP-1271 enables Smart Contract-based accounts

to sign messages. Put simply, it provides a secure mechanism for verifying
signatures from Smart Contract-based accounts, eliminating the traditional
need to find a correlation between a signer and its address.

I also appreciate EIP-4361, known as "Sign-in-with-Ethereum," for its user-

friendly authentication, and recognize the importance of EIP-6963 in improving
Multi Injected Provider Discovery, contributing to a more streamlined and
efficient wallet ecosystem. However, it's essential to keep an eye on other
upcoming standards that promise to shape the future of wallet innovation.
EIP-5003 and EIP-7212, among others, stand out as potential game changers. 

Standards are the silent architects of wallet innovation. They set the scene,
providing the necessary framework for collaboration and growth. As we navigate
the dynamic landscape of web3, it's crucial for wallet developers to stay attuned
to emerging standards, recognizing that the slow burn of innovation is the
driving force behind the continual progress of the decentralized ecosystem.
34 | Dapp Usage

There’s an appetite for novel Dapp experiences.

Understanding users' active pursuit of new experiences is crucial for Dapp
creators, informing the development and design of applications. Aligning with
user preferences and behaviors enhances engagement, satisfaction, and
retention, contributing to the overall success and adoption of Dapps.

While only 16% actively search for novel experiences, 40% express a
willingness to explore new elements if they come their way. 

This implies that a balanced strategy for Dapp creators, incorporating both
innovative features for proactive seekers and ensuring a user-friendly approach
for those more receptive to spontaneous exploration, could be beneficial.

Yes: I'm constantly hunting for Neutral: If something interesting comes

new experiences my way, I check it out.

16.4% 40.8%

14.3% 42.9%

39.4% 39.4%

30.4% 44.6%

27.6% 58.6%

25% 40%

Not really: I use what I use and

that's it.
All Participants
42.1%
The Newbie

42.9%
The DeFi Degen

21.2% The NFT Nerd

25% The Socialite

13.8% The Trader Type

35%
35 | Dapp Usage

Gauging crypto sentiment

Interestingly, the majority of users express a relatively satisfactory sentiment

about their crypto experiences, reflected in the overall Net Promoter Score

(NPS).

All respondents

30
Extremely satisfied

0 70
Somewhat satisfied

39.1
Somewhat dissatisfied

Extremely dissatisfied
-100 100

The NFT Nerds

30
Extremely satisfied

0 70
Somewhat satisfied

59.5
Somewhat dissatisfied

Extremely dissatisfied
-100 100

The Newbies

30
Extremely satisfied

0 70
Somewhat satisfied

8.9
Somewhat dissatisfied

Extremely dissatisfied
-100 100

Meanwhile, 72.9% of users who self-identified as “extremely familiar” said they

are either “somewhat” or “extremely” satisfied. This suggests that a higher level

of familiarity could be correlated with a more positive perception of crypto

experiences. Heightened familiarity may lead to a smoother and more

satisfactory experience, as these users are better equipped to handle various

aspects of crypto transactions and security measures.

36 | Insights from the dYdX

The framework for mass

adoption - abstracting away
user pain
Nathan Cha

Marketing Lead, dYdX

In my humble opinion, the vast majority of value/interest in crypto lies in

speculation and trading. Whether people want to invest in the hottest new
blockchain technology by purchasing tokens or speculate on trending altcoins
with derivatives, there is always an opportunity to make money. That being said,
the crypto industry is still pretty immature and has not reached a point of
adoption from the masses. I often find myself wondering if we as an industry are
too focused on winning market share instead of expanding
16% the size of the pie
overall. I believe that mass adoption of crypto will not happen until we as an
industry and builders abstract away most of the pain points in accessing the
services users want, and we are not yet close to achieving this goal.

Today, there are countless L2s on Ethereum, standalone appchains/L1s, crypto

wallets, bridging services, etc. that are exceedingly complex and difficult to
understand for the average outsider and even for some of the more seasoned
crypto veterans. Innovation and experimentation are great; it’s essential for the
growth of our industry. But if we are being brutally honest with ourselves, how
much of this has made the experience for the end user easier? Let’s take a step
back and consider the user journey for someone investing in other assets
besides digital currencies.

If I want to trade equities in the stock market, I can open up my TD Ameritrade or

Robinhood account and simply type in the ticker for whatever stock or derivative
I want to purchase. This is true for a range of different investment vehicles in the
stock market ranging from individual stocks, ETFs, and even tangible assets like
gold or silver. They are all readily available and I can trade them in one place after
depositing my funds. But what about in the world of crypto?
37 | Insights from the dYdX

Oftentimes, if I want to buy a digital asset with a smaller market cap, I can’t
acquire it easily. I need to first purchase collateral on a centralized exchange,
send those funds to a separate wallet, bridge those assets to a new chain,
connect to a decentralized exchange, and then finally swap for the token I
wanted in the first place. Admittedly, this is an oversimplified explanation of how
this process actually works. Staking, lending, and other services enabled by
crypto often have similarly tedious processes to onboard as well. How is it
reasonable to expect the average retail user to want to do all of this or even
understand it all? If crypto is to overtake or replace traditional finance or web2
services one day, this is something that we need to seriously consider. The
purpose of innovative technology is to make life easier for users, not harder.

“ The protocols that abstract away all the

complexities will be the ones to win in the
long run.”
The protocols that understand this deeply and abstract away all these
complexities will be the ones to win in the long run. Every day we see new crypto
protocols claiming to be superior for one reason or another (faster speeds, lower
fees, better security, etc). This is wonderful because the improvement of the tech
stack will enable better services. However, I foresee that the future of crypto will
be chain agnostic. All that will matter is if it’s the best possible product
experience. End users will not care what chain a product is built on or how
things are enabled on the backend as long as it’s easy to use and secure. Users
will be able to access all assets across all chains with a single wallet and tedious
processes like bridging will be abstracted away from the user experience. Non-
native crypto users won’t even need to know what specific blockchains they are
interacting with because all of that will be accomplished under the hood. All a
user will need to do is deposit funds on a single website or platform to
accomplish everything they need with ease. And once we achieve this level of
simplicity for the user experience, crypto will have cemented itself as the
industry of the future.
User Security
39 | Insights from the CTO

Crypto security will obviously

be better than web2, and
here’s why
Derek Rein

CTO, WalletConnect

In November, I got scammed in crypto for the first time. I lost ~$1000 which is a
lot of $$$ for a startup operator like myself. Our survey showed that around 40%
of users have either lost crypto or been the victim of a scam or phishing attack.
This number is unacceptable, and drives away otherwise interested users –
contributing toward a poor overall reputation for crypto. 

The possibility of getting scammed causes anxiety16%for most, which is terrible UX.
We’ve seen this movie before though: this is like the internet was before Apple
invented the App Store, which came with sandboxed environments that made
scammers' lives harder.


Below are the key points I believe to be the core innovations that usher in a more
anxiety-free crypto UX:

1. Scam list adoption

This is the lowest hanging fruit: prevent users from connecting to scams.
Automatic scam app detection is not trivial but many service providers have
cracked that. At WalletConnect we already work with Blowfish, Chainpatrol, and
Hexagate, and invite others to join us. These scam lists are surfaced through our
Verify API that we see wallets increasingly adopting. Wallets can either flag
warnings or completely block connections to these apps. A basic step but
important step to protect their users. 


2. Message and transaction simulation adoption

Message/transaction simulation is both a security and UX feature. It’s a simple

idea: show the user a human-readable digest of what the transaction does, e.g.
40 | Insights from the CTO

‘send X ETH and receive Y USDC’ in a swap. On a technical level it’s difficult
but there are now multiple strong simulation APIs. Wallets can also use
Simulation APIs to flag malicious contracts which provides further peace of
mind to end users.



3. Session Key adoption

Currently, when you connect a wallet and sign a transaction it can drain your
account. Session Keys enable a more ‘OAuth-y’ flow that allows to limit
permissions, e.g. to limit a session to $50. It also allows users to have an
intermediary co-signer who can block transactions that look phishy or require an
extra signature in risky scenarios. This will lead to more anxiety-free interactions
with apps.

4. Account Management

This survey has shown that many users have multiple crypto accounts: a day-to-
day account, a serious money account, professional accounts, gaming accounts,
family accounts, etc. Each account has different management and recovery
requirements. Today, setting up these accounts requires safely storing seed
phrases and account recovery is complex. Going forward I think setting these
profiles up will be easy and fun. Users will not have to worry about losing access
16%
or thieves being able to drain all their accounts if they get access to one.

Unlike 15 years ago, consumers aren’t afraid anymore of catching a Trojan when
using their phones. Similarly, consumers shouldn’t be afraid of getting scammed
when using crypto. The innovations making this possible are unfolding as we
speak, but it’s important that – as an industry – we make this a core focus as we
enter the next phase of crypto adoption.

“ Security is still a UX blocker for mainstream

adoption. But soon, no more.”
41 | User Security

User Security
Understanding the crypto consumer involves prioritizing user security.
Collecting sentiment data on security provides nuanced insights into consumer
attitudes and concerns. This information identifies pain points, suggests areas
for improvement, and shapes strategies to enhance user trust. Delving into
security sentiments contributes valuable insights for creating a safer and more
user-friendly crypto environment.

More than half of respondents feel relatively safe

interacting with crypto products and services

50.5%
expressed a high level of confidence, feeling
"extremely" and "pretty" safe while using
crypto products and services.

Notably, this confidence increases to around 70% - 75% for those who self-
identified as being extremely familiar with crypto: DeFi Degens and NFT Nerds.

How safe do you feel interacting with crypto products and services?

I feel extremely safe 11%

I feel pretty safe 39.5%

I feel neither safe nor unsafe 32.1%

I don’t feel that safe 13.4%

I16%
feel extremely unsafe 4%

However, concerns arise as this figure drops to 39% among Newbies,

emphasizing the considerable learning curve in crypto. This highlights a
significant opportunity to enhance efforts in making people feel more secure
and might imply potential challenges in onboarding new users to the crypto
space. This underscores the importance of educational initiatives and user-
friendly approaches to enhance the overall safety perception for newcomers.
42 | User Security

There’s much to be desired for enhanced security in wallets

and Dapps, suggest NFT Nerds

53.5%
of users believe that wallets and Dapps should
enhance user protection

66%
of NFT Nerds expressed that wallets and Dapps should
provide heightened security measures

I believe that wallets and Dapps are 25.8%

19%
doing enough to protect users.
I believe that wallets and Dapps 53.5%
should do more to protect users.
I don't think that it's the responsibility 16.1%
of wallets and Dapps to protect users.

Other 4.7%

User security expectations vs. adoption

While a majority express a desire for enhanced security features in wallets

and Dapps, practical adoption of existing tools varies.

How frequently do you use additional security measures like 2FA or

hardware wallets to secure crypto assets?

26.1% 22.7%
Only 26.8% of NFT Nerds

consistently use added security

measures like 2FA, with 6%
admitting to neglecting
10.4% them. Cryptonauts top the
charts with 42.9% consistently
adopting security measures,
8%
while Newbies came next at
26.8% 6% 32.1% DeFi Degens lag behind,
with only 18.2% regularly
Always Rarely
utilizing additional security
Often Never: Not aware
features.
Occasionally Never: I’m too Lazy
43 | User Security

The data highlights a disparity between user expectations for enhanced security
measures and the current utilization of available security tools. This suggests a
potential gap in user education and a need for encouragement to promote
broader adoption of protective measures tailored to each user group.

Less than ⅓ report losses, and optimism varies across crypto groups.

72.2% of respondents said they have never lost crypto due

to phishing or hacks.

Have you ever lost crypto due to phishing or hacks?

Yes, I have lost crypto due to a 14.4%

phishing attach or scam.
Yes, I have lost crypto due to 14.4%
16% wallet app, or bridge hacks.

No 72.2%

Other 0.7

Less than 30% of participants reported experiencing losses in crypto funds due
to malware, phishing attacks, or difficulties with seed phrases, passwords, and
hardware wallets. Notably, among Cryptonauts, this figure rises to 49%, and
among DeFi Degens, it surges to a significant 58%.

35% of respondents express optimism about a decrease

in phishing attacks and hacks

65% ofarerespondents
declining
believe phishing attacks and hacks
44 | User Security

Are phishing attacks and hacks increasing or decreasing?

A nuanced perspective emerges within subgroups with DeFi Degens showing
more optimism while Cryptonauts and NFT Nerds expect the number of attacks
to rise. This indicates varying sentiments within crypto user communities, which
may present an opportunity to access an area for growth for leaders looking to
tackle cybersecurity concerns head-on. While funding dried up last year,
security companies still clocked in $8.2 billion from VC deals.

I feel like the number of phishing I see no difference.

attacks and hacks are increasing.

35.1% 42.5%

39.3% 42.9%

49% 24.5%

36.4% 21.2%

48.2% 25%

31% 31%

40.7% 42.9%

I feel like the number of phishing

attacks and hacks are decreasing. All Participant

21.1% The Newbie

17.9% The Cryptonaut
26.5%
The DeFi Degen
42.4%
The NFT Nerd
25%
The Socialite
37.9%
The Trader Type
15.7%
Future outlook
46 | Insights from the CEO

Unleashing the power of 


web3 social
Jess Houlgrave

CEO, WalletConnect

While social heavyweights like Telegram and Discord have been the go-to for
crypto chatter, there's this growing buzz calling out to web3 to dive headfirst into
the social messaging scene. The time has come for web3 to revolutionize and
enrich its social fabric, pivoting towards principles of ownership, privacy, and
user empowerment. This paradigm shift places control firmly in the hands of
individuals, emphasizing decentralized ownership of data and digital identity as
an inherent right. Private keys become the keys to one's kingdom, fostering
unparalleled control and security in this decentralized arena.

16%
Privacy is not just a feature but a fundamental tenet, upheld by robust encryption
methods and decentralized storage mechanisms that shield user data from
vulnerabilities linked to centralized servers. The inherent interoperability in web3
platforms ensures a seamless user experience, allowing individuals to navigate
diverse applications with a single identity or wallet. Monetization takes on a new
dimension as content creators tokenize their work, engaging directly with their
audience and receiving compensation in cryptocurrency. Beyond mere
functionality, web3 social platforms embody a philosophy of community-driven
governance, user incentives, and reduced reliance on intermediaries,
envisioning a landscape where the user is at the core—a departure from the
siloed structures of web2.

But, it's not just about decentralized platforms; it's about putting the user in the
driver's seat of their digital journey.

Web3 social app Orb stands out as a prime example, placing ownership and
creator monetization at the forefront. Leveraging the Lens Protocol, Orb aims to
unlock a transformative experience where users have complete control over
their identity within a decentralized social community. Orb also empowers users

47 | Insights from the CEO

with customizable monetization options, which positions it as a noteworthy

player in shaping decentralized social experiences.

Another example is Farcaster, a decentralized social community akin to Twitter,

which has recently witnessed remarkable growth. Farcaster went from around
5,000 daily active users (DAU) on January 28 to an impressive 24,700 by
February 3 – a staggering 400% increase in one week. This surge correlates
directly with the introduction of “Frames” on January 27, leading also to an
extraordinary uptick in daily 'casts,' reaching over two million as of Feb. 3—a
remarkable 1,000% increase from the 200,000 recorded just a week earlier.
Frames is transforming user interaction and facilitating activities like minting
NFTs, making transactions, claiming tokens, reading external blog posts, and
answering surveys—all without the need to sign a transaction or leave the app.

Recognizing the significance of user engagement, WalletConnect saw an

opportunity to strengthen connections between dapps and their users by
launching Web3Inbox last year. Web3Inbox is a groundbreaking web3-native
communications tool, designed to seamlessly connect dapps, wallets, and users
through push notifications, fostering better engagement for applications with
their communities. 

16%
These evolving social applications provide a glimpse into the many dynamic
developments reshaping the web3 social space. As our crypto community
progresses, these initiatives hold the promise of establishing web3 social as a

“
vibrant and indispensable element of our decentralized future.

It's not just about decentralized platforms;

it's about putting the user in the driver's seat
of their digital journey.”
48 | Future Outlook

Future Outlook

Our data shows a bullish outlook on web3 remains, with more than one-third of

participants expressing optimism regarding the development and adoption of

crypto and web3 applications.

of Cryptonauts indicate being

Over 30% "very optimistic.”

Users demand more NFTs, web3 social, and messaging

Looking ahead, a clear consensus emerges as the top 3 desired crypto

experiences users are looking for: more NFTs, more web3 social and

messaging, and more community and governance models.

More NFTs 34.8%

16%
More web3 social and messaging 31.8%

More community and governance models 28.1%

More DeFi 26.4%

16%
Other 13%

Looking at the subgroups, we see

Cryptonauts (57%)

DeFi Degens (55%)

Socialites (62%)

are most excited about the prospects of web3-native social and messaging

development s

49 | Future Outlook

Opportunities for education, user-first innovations, and

more offerings
User groups widely agree that the industry is often tied to trading and
speculation, creating an opportunity for educational efforts showcasing the
broader utility of web3.

Trading and speculation Not user-friendly enough

25.4% 22.7%

39.3% 25%

34.8% 13%

18.2% 36.4%

30.4% 26.8%

20.7% 20.7%

23.6% 20.7%

Not secure enough Too limited in its offering

21.4% 13%

17.9% 24.2%

26.1% 19.6%

20.7% 34.5%

25%

All Participants The Newbie The Cryptonaut The DeFi Degen

The NFT Nerd The Socialite The Trader Type

50 | Future Outlook

Understanding web3 through

expert insights and consumer data
The WalletConnect Pulse report offers a comprehensive snapshot of the current
state of web3, examining consumer sentiment and usage. Despite concerns
about security and a learning curve, there is a growing interest and optimism
within the crypto community.

The study unveils diverse consumer profiles, from Newbies to NFT Nerds, each
with unique preferences and challenges. Three key findings underscore the
report's insights: over 50% express confidence in using crypto, but only 27%
regularly use security measures. Additionally, 40% are open to new features,
with the top three desired crypto experiences being NFTs, web3 social and
messaging, and community and governance models. The report also
incorporates valuable insights from industry leaders on self-custody, UX, smart
accounts, digital ownership, standards, security, and web3 social, among others.
These diverse viewpoints enrich the findings, providing a holistic understanding
of the challenges and opportunities shaping the future of web3.

As the industry evolves, web3 leaders must focus on user-friendly

experiences, enhanced safety features, and educating users to bridge the gap
between potential and adoption. The bullish outlook suggests exciting times
ahead for web3.
51 | Glossary

Glossary
Airdrop: A method of distributing new tokens or coins to existing holders of a
particular blockchain currency, typically for free or as a reward for holding
another type of token. Airdrops are used to gain attention, new followers, and
drive decentralization of the token holders

Account Abstraction: A feature that aims to simplify user experiences by

making all accounts operate in a similar manner, whether they're controlled
by a private key (like Externally Owned Accounts) or a piece of code (like
smart contracts). This can enable users to pay transaction fees with tokens
other than ETH and improve security features

Externally Owned Accounts (EOAs): Accounts on the Ethereum network

controlled by private keys, without any associated code. EOAs can send
transactions (transferring ETH or tokens and interacting with smart
contracts) and are controlled directly by the user, not by a contract

Passkeys: A new authentication standard designed to replace passwords,

16% 16%
enhancing security and convenience. Passkeys are a type of cryptographic
key that can be
22%
used across different devices and platforms,
22%
without ever
being stored on a server, making them resistant to phishing attacks

Phishing: A cyber attack that uses disguised email or other communication

methods to deceive the recipient into providing sensitive information, such
as passwords and credit card numbers, or to install malware

Private Key Infrastructure (PKI): A cryptographic system that manages the

creation, distribution, and storage of digital keys, encompassing public and
private keys. PKI ensures secure communication and authentication in
various online transactions and interactions

Private Key: A secret alphanumeric code that proves ownership of a digital

asset and allows the asset to be transferred. It should be kept secure and
private, as anyone with access to it can control the associated assets

Public Key: A cryptographic code that allows a user to receive

cryptocurrencies into their account. The public key, derived from the private
key, can be shared with others to receive assets but cannot be used to send
assets from the associated account.
52 | Glossary

Seed Phrase: A series of words generated by a cryptocurrency wallet that

gives users access to the cryptocurrency associated with that wallet. Also
known as a mnemonic phrase or backup seed phrase, it acts as a backup to
access your digital assets
Session Keys: Temporary encryption keys used for a single session or
transaction, enhancing the security of digital communications by ensuring
that each session has a unique key for encryption and decryption
Smart Contract: A self-executing contract with the terms of the agreement
directly written into lines of code. They automatically enforce and execute
the terms of a contract when predetermined conditions are met
Smart Contract Wallets or Smart Accounts: Wallets that operate as a smart
contract on the blockchain, offering more flexibility and features than simple
EOAs. They can support features like recovery options, spending limits, and
permissions set through smart contract code
Wallet:
16%
A digital tool that allows users to store, send,
16%
and receive digital
assets like cryptocurrencies.
22%
Wallets can be software-based 22%
(online,
desktop, or mobile) or hardware-based for increased security
Custodial Wallet: A type of wallet where the private keys are held by a third
party, such as a cryptocurrency exchange or wallet service. Users trust the
custodian to manage their digital assets securely
Non-Custodial or Self-Custodial Wallet: Wallets where the user has control
over their private keys and therefore full control over their assets without
relying on a third party. This type of wallet emphasizes user responsibility for
security
Wallet Provider: A service or platform that offers cryptocurrency wallets to
users. Providers can offer various types of wallets, including both custodial
and non-custodial options
Wallet Address: A unique identifier that represents a destination for a
cryptocurrency payment, similar to an email address or a bank account
number. Wallet addresses can be shared publicly to receive funds but do not
reveal the identity of the recipient.
The connectivity
unlocking the future
of web3.
At WalletConnect, we are dedicated to leveraging these valuable user insights
to continually enhance our protocols and offerings. Our commitment is to
provide secure, user-friendly solutions that empower individuals to navigate
web3 with confidence. Whether it's launching web3-native communication
tools or advancing interoperability functionality, we aim to bridge key industry
players together. As the industry progresses, so do we and our partners, all
dedicated to fostering a seamless and optimistic journey for users engaging
with crypto and web3.

walletconnect.com