The future of Web3 adoption lies in user-friendly crypto wallets with simpler sign-in options and recoverable passwords, moving away from the complexities of seed phrases.
The crypto industry is facing a significant challenge in achieving mainstream adoption, primarily due to the complex nature of current Web3 wallets, particularly the reliance on seed phrases. These intricate recovery methods are one of the main barriers preventing broader cryptocurrency adoption.
A leading figure in the discussion, Bumblefudge, who serves as the janitor-in-chief at Chain Agnostic Standards Alliance (CASA)—a blockchain developer organization focused on fostering widespread adoption—has emphasized the need for change. During his keynote speech at the Web3 Summit 2024 in Berlin, Germany, he stated:
“Seed phrases are not going to work for the other 95% of the world. However, the solution lies in the establishment of boring, yet essential, standards and governance.”
Currently, the process of onboarding new users to the crypto space remains daunting, requiring the setup of a wallet with native gas tokens and the management of non-recoverable seed phrases before any transaction can take place on a network. To appeal to mainstream users, Web3 wallets and decentralized applications (DApps) must adopt more user-centric features, starting with the elimination of complex seed phrases.
Bumblefudge further explained that achieving this goal would require industry-wide collaboration between wallet providers and developers. He noted:
“No one wants to document their usage methods because they’re all competing with each other. Everyone seeks to claim the best parts of the implementation. As a result, nothing will be interoperable or secure.”
Without standardized collaboration, wallet providers will struggle to create interoperable and more user-friendly solutions, such as passkeys. Bumblefudge added:
“We need to shift our focus towards user needs rather than what the blockchain or DeFi protocols demand. Establishing standards for user expectations is crucial.”
The removal of friction points is a sentiment echoed by other key players in the industry. Chintan Turakhia, senior director of engineering at Coinbase, highlighted that to onboard the first billion users onto the blockchain, more beginner-friendly applications are essential.
Turakhia, speaking at EthCC, stressed:
“If our goal is to bring in the next billion users—and let’s start with just 100 million—we have to eliminate all those friction points.”
In line with this objective, Coinbase launched its smart wallet in early June, featuring more user-friendly options, replacing complex seed phrases with simpler account names and passcodes. Turakhia anticipates that these easier sign-in options will become the standard for crypto wallet providers moving forward.
