The future of Wallets | Panel | ETHDam 2024

[Music] all right so looks like we have 29 minutes left so hey everyone um happy ethd hope you're having a great time hope you're taking things seriously and not too seriously um welcome to the wallets panel and um okay has everyone in here used a wallet before raise your hand if you have never used a wallet raise your hand if you have used crypto but never used a wallet exactly so this is why you all should be here um for this panel so um I have some talking points by the way but we're going to kind of go with the flow if that's all right with everyone um why don't you guys just go down from proximity and introduce yourselves Paul you first hi everyone my name Mike check hi everybody my name is Paul P CEO and co-founder of edge um as you know this is a wallet panel we are self- custody wallet although as we'll kind of talk about a little later I've started to really hate that term because it doesn't really tell what an application does um since there's many things that in the crypto World a self- custody app could do um but yeah I've been um in the space now for about 11 years um and been building for about 10 and both excited about what the space has become but also um very surprised uh relative to what it was in the early days of just kind of Bitcoin so that's where I'm at hello everyone this is Sami uh happy to be here as a amsterdammer for for several years already so great to be here on the stage so working as a head of marketing at trust wallet if you don't happen to know what is trust wallet uh it's one of the most trusted and secure web tree wallet and cryp we crypto wallet and web tree Gateway um we have uh more than 80 million us resar globally so far trust wallet was founded in 2017 as the first mobile self custody multichain wallet and excited to be here to speak about security and privacy as well uh one of the recognition is the the ISO certification which we received earlier this year as one of the first self custody wallets so great to chat today with our fellow uh wallet teammates here hey guys okay it's working uh so I'm the CEO and co-founder of xifi wallet we were the first multichain wallet extension um yeah we've been here for a little while we now the wallet that supports the most chains out there and we proud of it and a lot of stuff will happen next next year going to touch on that during the the panel absolutely and um personally I'm a user of two out of the three I need to download trust wallet but hopefully by the end of the conference I'll have some feedback for you yeah so um real quick um um this was a suggested Point um what role do crypto and web 3 wallets play in 2024 and so this is a very open-ended question um obviously but um crypto and web 3 wallets what kind of role do they play anyone got any thoughts on this anyone want to go first it's kind of an open-ended one yeah happy to go well I guess um so most of the people in the world that are holding crypto are not on boarded yet in self custody they're using like centralized venue whether it's like a centralized exchange or some sort of centralized venue such as TR back apps ruin Hood whatever it is um so as a self- custody wallet you Essen essentially the very first interface that you're going to interact with as a user before you even like think about interacting with Unis swap or any other DBS right so our role is somehow to make the onboarding of um the people that are jumping into on chain activities and that's a lot of responsibilities obviously uh from a security standpoint but also from a ux perspective so I would say that like this is a critical piece of infrastructure probably one of the most important piece of infrastructure when it comes to uh a blockchain technology um which is somehow like um probably not as loved as other part of our space and uh I was like actually upstairs and I heard like the previous panel was why the the wallet sucks plenty of reasons for that and we can go through them uh U which I don't think it's completely true either uh but yeah I think it's an essential piece of infrastructure right like with the first thing with the getaway to crypto um so I think it's pretty important cool who's next yeah if I bu on what Emil was saying like like you like you said uh centralized exchanges are the entry point for many users uh then when you know what has happened in the past year for example in case of FTX and few other players you you know and you have heard this for example during the previous panel as well uh not your keys not your crypto so that is unfortunately the there has been situation where the users needed to learn the hard way but at the same time the industry knows and it's a best education situation as well that you really need to go to self- custody if you want to mitigate your risks self- custody is the true way for you to to own your crypto obiously then if you if you speak about the user experience again like what Emil said if I'm going to my let's say to my family or to my friends and many of them say like so how does self cust work they understand the concept of it your keys your crypto and then they say like so where do I put my email address and my password what's this seat race thing here and then the first thing they say like I actually don't trust myself I cannot trust myself actually uh storing these seat phrases how what if I do lose it then obviously you will lose your your keys so I think we as a wallet we are in a critical phase to do the Innovation uh to make sure that uh we will help users to trust themselves in in this case we provide Innovations when at self custody the the security information is always stored at the user front not at the the provider side um and Trust wallet for example uh just earlier this year we introduce our smart wallet or Aon abstraction wallet called Swift wallet which basically ties to security information to us as pass keys and that means that it's better user experience they can trust themselves as long as they keep their iCloud or Google Drive passwords pass Keys safe and then we can onboard the users and finally uh in many markets like southeast Asia they don't have even access to centralized exchanges to onboard to crypto web tree in the first place so those users will get the the first touch point to self custody automatically and that why the user experience uh Innovation and the security and privacy aspects are critical to make sure that um we can make it smooth and users can trust themselves I'm going to rephrase I think what some of my colleagues here mentioned as far as like the exchanges and centralization I think our mission of wallets especially in 2024 is to end exchanges basically get people completely off of them make and really the focus in how to do that is feel just like them the go as opposed to training um there's a lot of people here and no offense to the organizers of this conference because they're really big on education I used to really be big on education in the early phase of crypto I've actually thought that ironically it's kind of part of the name of our company Edge and you know we have this quote unquote education blog but I think we need to get away from focusing on that as the solution and instead simply deliver what people are already used to but now in the wallet space or what I'd prefer to say is the self- custody space because everything's a wallet like coinbase had a USD wallet which is nothing more than a damn bank account so so in the self- custody space we need to just simply make it feel familiar so that people don't have to ask the question or go to a workshop and take a half hour course on how to use and get onboard into crypto they do what they would feel comfortable with if they were to go to a a kraken a coinbase A binance or to a PayPal or a venmo that I think is our mission make it that familiar um maybe it's not an email because we care about privacy but it's the closest thing we can get in that familiarity space um and then we then we're able to onboard people and get them off all the centralized Services yeah for sure and that kind of get people off exchanges talking point is a little bit on it's a couple questions down we kind of address that but um time to Pivot into fud or rather uh recently there was a proposed or passed uh piece of legislation in the the EU that would add some extra challenges maybe to the crypto space and how they operate in terms of custody versus self- custody Anonymous accounts versus everything else and um obviously from like the you know I I read the piece of legislation uh most people probably haven't most people just see somewhere on Twitter X whatever you call it that oh they're they're banning privacy they're banning Self-Cut there just there's some like General like ideas out there right and so as annoying as it is to sort of address this kind of thing um do you guys want to kind of take crack out it like what's going on and how does this affect you and what are some of the challenges that this new regulatory landscape in this one in particular but also just across the world right moving forward how does that how do you kind of navigate that that world who wants to go first I'll happily take this one I think because um there's what you see from the uh from the reporters and then what the actual legislation says and of course then there's the third level uh layer which is what people are predicting the next level of um compliance is going to require so to the best of my knowledge and who we've talked to feel free to correct me if I'm wrong guys is that the transactions from a centralized custodial service um to a self- custody address U need to be kyc meaning uh a custodian needs to know who it is sending money to and that that address is owned by a specific person that they have personal information about and so generally already true with a lot of exchanges which are most of the custodial Services um they're already KY seeing users so how do they actually prove though that when they send funds out to a self- custody wallet that that's the users's wallet now ironically this is something that actually our company's been dealing with for sixish years now where we do an address proof we just in a way it's kind of silly we just simply sign with a private key a message that says we own this public key which is this public address and then that address goes to the exchange and the exchange can say okay well we have quote unquote proof that this user owns the address and we can now send funds to it so the technology is there it's been around for years and it's more of a bit of a technical inconvenience that now all of the exchanges that you might interact with might need this proof but the protocol is there it's been baked into a handful of different Walts including Edge and so I don't think that that's a huge lift it's just once again an inconvenience um The Proposal that possibly they would ban self- custody to self- custody on it's not impossible countries could have Draconian measures but at the same time they're probably realizing that that wouldn't end any of what they're actually concerned about from the Viewpoint of elicit activity because you could download a a fully open- Source self- custody app compile it yourself and the elicit actors will probably go through that problem go go through that challenge of doing so so once again I'm not too concerned about the existing best of my knowledge restrictions that are getting in place because a small technical update can um can actually fix that and in a way it actually makes me a little bit happy I've never been happy about regulation so this is one of those very very few instances where I'm a little happy because there is a class of custodian services that are not exchanges they're fully stal wallets especially in like the Bitcoin lightning space there's a whole bunch of them those products are effectively dead like no one's going to be using those fully agreed they would be fully dead under this kind of Regulation because they would have to kyc whatever entity it sends funds out to which means you can only send funds to yourself so in in a way it is going to drive people to the self- custody solutions from the Viewpoint of being able to Simply send and receive and and I fully agree with you on the fact that like if you because your service you should be regulated as a bank is there was no reason why not so I think it does make sense ultimately like it was only like regarding like a officially licensed crypto Services uh that had basically now to report on big transactions I mean that that's nothing to do with like self- custody wallet being banned or anything that I've read on X or Twitter um I agree with you I think in some sort of jurisdiction that some points on or not that there will be like some some regulations on selfed wallets it's not just now uh so let's see what happens we you know we I'm sure we all have I mean I know we all have like legal departments we all monitoring what's happening let's see what happens first probably going to be trust uh paying before anyone else yeah well one one thing uh obviously not being any any expert on the regulatory M matters but uh indeed right now it seems like uh the the regulation proposal explicitly mentions that software ws and Hardware wallets are excluded self cust to self cust is not in the scope but it's only basically when an operator is hosting a wallet so basically centralized Exchange in this case so I don't see that really much is changing at this point but obviously these uh F news they are really attractive and getting a lot of uh interest there but it's also a good opportunity to to educate users but I think uh uh I think always when there's regulatory changes is also a good way to increase the mass adoption and uh and uh Paul actually mentioned a really good example of um what they have been doing I think in the future I would foresee especially knowing that centralized exchanges are still critical on RAM channel for people to join self custody there should be probably a standardized Soul pound kyc token which allows uh the the sending side to actually very verify that there's actually a kyc completed it matches the one in their own record so I think it's really really critical actually in the security and privacy field as well that uh there's going to be Innovation it increases the use user experience when user experience is good users will call to self cust so that's my narrative today nice yeah u in in like a sentence do all three of you think that this is actually for your companies personally good or bad for business or neutral what do you think I think it's bad only because it just costs more engineering effort and when I mentioned that one little benefit it's just a little nugget I think that if I had to say you know above or below 50% you know is it 50% above 50% good or bad it's still below 50% good so it's still net negative um but you know you try to see the Silver Lining that's probably the best way for me to describe it but still a net negative because it's inconvenience we could be spending our time doing better things than creating these address proofs and changing apis and you know Integrations so still net negative in my eyes uh from my point of view I would I wouldn't necessarily assess it from our point of view obviously I AG create that any engineering resource you might want to put it in certain aspects but I always take a look at it from user point of view is it beneficial for the users if the option is that the uh would be unclarity for users to to to perform this and we have an engineering solution to do it I think it's good for for majority of the users um that that's how I would frame it so if we can help users to come to self City then it's a good thing yeah I'm roughly line all right um so one thing was Paul sort of alluded to with all ending centralized exchanges type thing talk about Dex Integrations and as far as I know for example thorchain is integrated across all three wallets currently and there's a few other cross chain um protocols coming up and so uh what do you how do uh Dex Integrations factor into the wallet road map in the future and right now yeah I'm happy to take this one um well obviously like we were the reference wallet from Tor chain were incubated by them originally so um for us it was like a priority to support like Tor chain itself um ultimately when we build the wallet we built it in a really chain agnostic way and we didn't just want to support like a larger way of chains we also like wanted to allow people to communicate between the different ecosystem that were integrated and obviously like a solution such as Tor chain was really important now um when we first essentially built our routing API there was no equivalent there was Rango early on but we were kind of already like like more or less at the same like uh level of of development since then so since then we we've basically built an aggregator of aggregator with the routing API right so like we have like obviously Tor chain that was the first one being integrated but then we also integrated zerox unit swap 1 inch socket all the bridges that come with it uh um osmosis IBC transfer are integrated in it and like we have Mev protection stuff I mean lot of stuff coming into the routing API itself so the idea is for the user to be able to go into the wallet swap within an ecosystem any assets he wants to swap Bridge from an ecosystem to another any asset he wants to Bridge and not necessarily have to use three different wallets and interfaces to achieve the same thing I'll give you an example like if if you are currently like using like Phantom and uh uh you are trading mem coins or whatever you're doing um and you seeing Bas that's great now there was B and we know that like there was dig like all these different like coins that are being created on on on on B I want to go on Bas you have your Phantom B not supported by Phantom they don't have a customer PC you need a metam you need to download a new wallet um and since like Phantom is not going to allow you to bridge directly within the wallet to base you're going to need to interact with the third party interface and you suddenly have used like three different interfaces uh uh two different wallets and probably like put 15 clips into it uh uh and and and also like you probably have met some issues like with funding a given address in gas uh before you can Bridge so that that's kind of what we want to solve uh on top of not having to deal with DB transaction signing popups and and and other things like that so for us it was very much like a a huge Focus um and we will continue developing roing API to make it as you know performant as possible and it's it's a lot of work we we un interface but a lot of the thing happen in the in the back and I love when Paul said like uh improving our API because you know that's the kind of things we have to build ourselves and I'm pring Edge wallet as well trust you guys have like like a reable wallet and you two like Anda that uh uh but you know when all of these wallets have been there for a while actually and when we all started API providers were not catering for the needs of multichain wallets and we either had to combine like different apis which leads to several point of failures and and an overall Dev experience that is absolutely disgusting uh uh um and I think that like most of us like have worked on our own API indexes so again like we in interface but as you said with the rooting API there was a lot of stuff happening in the back end actually uh and under the hood um to answer your question yes yes who else I think if you think about where does Dex integration facture into our product Ro map I would always take it to the one step further like if you if you think about your we are now I I just speak about because now we're hopefully in the beginning of the next pool run and you're expecting that the next billion years will come to self custody as well the first thing if they would land to a wallet that you just see your balances which are zero because you don't have anything and the first thing you need to go to that browser and these is just never have been navigating in world of web tree they're like so what do I do they're like okay I don't know what I'm supposed to do let me go back to to the centralized exchange but when we have been not only Dex Integrations but we have Integrated onr Solutions we have a bunch across uh globally different providers supporting different users different onramp channels uh obviously the the Dex Integrations are critical so we we support same chain in same chain swaps like 1 in and T chain like the rest of the wallets here as well it's all about uh just making sure that uh they can meet their use cases they can buy the crypto they can swap the crypto uh they can uh uh get into the world and then when they get the the con Fort like how self Custer Works they can actually hold and do actions then we open them and they can go to the full full full web tree as well if they want another example of our success story if I just can mention here is that we just recently uh integrated the the eth St in it taking with um Kiln and um I cannot even remember the numbers right now but we are one of the the the the the most uh tvl captured wallet together with Kil and that's the the the use case that we we basically in matter of weeks just went to I think it's 20 20 million in uh ET right now being Stak and the key is that users can just do basically one click they have their eth they click on the homepage that I want to St my eth they confirm they choose the the the node provider and basically of they go so this is the the the the flow like it's not only about the deck Integrations but just providing the the native inte Native Solutions through the apis that users can meet their uses cases and maybe later we still have time to speak about the security features we have integrated but the same idea there as well so pick off one of those Concepts that you uh I'll build on one of the concepts that was mentioned as far as the Fiat on and off ramps a lot of people get into crypto that's the first thing that they need they need to they need to get into crypto and the general Integrations that we've seen over the past years are are little to one-sided meaning there's maybe buy support where people can purchase and almost never is there self support um we have focused on both sides almost entirely when um Edge um but to build on that if you think about when you go to an exchange the experience is vastly different to the average wallet when you just simply want to trade the first you do is you typically deposit and then once you've deposited then you can very quickly trade um and that's vastly different in in wallets it's like you buy and you swap which is a slow much slower operation espec especially cross chain it also doesn't give you a lot of the different type of order features that an centralized exchange will give you um such as a limit order or maybe even leverage um stop limit orders so fundamentally if we really want to end the exchanges we have to go much much faster in the order types and we have to be able to to provide the kind of order types that the true Traders um are looking for and so once again those stop limit orders limit orders potentially a little bit of Leverage as well or possible and the nice thing is that defi is really starting to allow for this um early on we couldn't you know it was challenging just to go from Bitcoin to ethereum um now we can take fact like tokenized Bitcoin or synthetic Bitcoin that might be created on a chain such as thorchain and quickly transfer that and create limit orders for it and actually provide and and create Market orders um and provide liquidity not via an amm but with um order matching so really once we start to mirror a lot of the experience that you get out of a fully centralized exchange we really broaden the market and there is so so much more liquidity to be had and transaction volume to be had once you start tapping into the more frequent Traders which by and large wallets don't really do I think you guys could probably agree we're not tapping into the more frequent Traders we're tapping into the oh I want to buy some and you know a couple weeks later my friend I said I should get this token all right I go get it and I sit on it for a while and that's some liquidity that's some transaction volume um but until you get to the people that are you know it's kind of like their side job to start trading whether you call them the Deens or not they are providing liquidity to the system once you give them the features that they're looking for and the costs that they're looking for now you've really exploded the use case of getting people off exchanges providing liquidity to the dexes which really starts to steamroll the use of self- custody and really pull a lot of the liquidity off the centralized exchanges which now transitions everybody so that's what I'm excited to see but it's a a bit of a long road ahead but I know what our Target is it's not just let's provide a whole bunch of features it's let's provide the features that really get people off the centralized Solutions yeah well let's look at some of the questions real quick um I did have one other but I'll I'll save that for for last the spicy question but yeah um if you guys could put up some of the question so far on the screen I don't know if we can oh see some action upstairs he's running for it he's pressing buttons get my phone there we go so let me just look at this so the top one here use open source and reproducible wallets like Unstoppable wallet trust wallet of propriety since binance bought it in 2018 I don't trust it well that's that's not a question do is every ra show of hands does everyone know what a question is I'm just kidding I I can make a comment on that one yes absolutely go for it TR true like there there's there is some truth there let's put it that way so yes trust wallet was bought by binance earlier uh we have our roots are in the binance ecosystem that's that's true nowadays we are a a separated entity but when it comes to open source we actually like when when Victor the founder initially set up trust wallet like it was completely open source but that there was an issue there that uh suddenly there was there was like hundreds of trust wallets basically uh because it was open source and that was really a tool for scammers to kind of uh lure in users they thought that that's actually a legit trust wallet so what we did there we we did the balance between that let's keep the key uh information open source that's basically our wallet course so that's basically where we have all of our private key security mechanism that's fully fully open sour so anyone if you whoever put the question here like you can go and check our kith Hub repository it's it's fully uh transparent from the from the from the beginning until now and it's going to be completely open source so we never going to be completely we are never going to be closed on the wallet cross side so that will be there but for the remaining we just decided to do the best for the industry and best for the users because if we were fully open source we just saw that that's actually doing more damage for the user than any benefit but wallet cor will always maintain open source um happy to chat with you afterwards as well let's let's let's take this offline and uh I can assure you about the SEC aspect as well so I'll chime in with a bit of a different take um we're we're just about fully open source you could compile Edge from our GitHub yourself and run it yourself and so nothing is obscured um and from the Viewpoint of protecting users we've seen uh clones and I don't know that closing source code prevents the Clones because they can still see what your app looks like and create one that looks I by and large identical no one's going to look at the real version and the fake version side by side to see if it's Pixel Perfect so I will disagree with the statement that you close source to protect users from copycats because it's very easy to copy a wallet even if you cannot see the source code um and that has been done so um we stay open source for that level of transparency and auditability uh we think that's important to cryptocurrency space crypto was born out of that ethos and so we're going to retain that okay let's hit on this one on top and please keep me honest for time right um so what do you think is the optional I think they meant optimal but what do you think is the optimal setup between cold and hot wallets what benefits and risks do you see in Integrations between both sorry I was playing a bit with it and I think I turn it off uh I couldn't turn it back on uh so I mean like look as soon as you support like a different type of Hardware wallets um and you're also allowing people to create hot wallets people can do whatever they want I I we we we we kind of like always recommend for people that have a lot of funds and holding on to them like for a long term period to use like a ledger or treasure with uh uh the wallet extension I think it's important to mention that for people but I know a lot of Traders and dend that are not going to you know use aot Hardware wallet because in terms of execution just T more time and they just they just want to use hot wallet for that and they move the funds around uh B on like you know like if for one day you're trading with one the hot wallet at the end of the day whatever you do you put it back in the in the hardware wallet so I think you need to to to give the both options to to the users and and let them use the way they want ultimately you know like but we need to C for the needs from that standpoint as well um we've been working on an MPC backs uh uh uh feature so you'll be able to log in with your social logins into the wallet um which is is um debatable from a security point of view much better from a ux perspective there was always a compromise to be F like between like a ux and security ultimately like uh yeah uh as as as a wallet Builder like I would always recommend people that have like more than than a few grants on a wallet to use a hardware wallets I think uh goes with saying yeah cool we have time for one more we good all right so I'll take examp privilege for the last one uh referencing the previous um is that mine you want this one mic check mine's working all right centralization guys all right so referencing there was a mention about like the wallet suck and so the question is why do the wallets today suck or do they any have the one that works so they suck because they are by and large not what you've ever used before and I think that difference and change um effectively creates that alienation and probably the biggest challenge in wallets that I'm seeing in the industry um is that no matter what you do it's going to be different for one of two categ ories of people you build one that does a lot of this abstraction and hides the keys you will piss off the people that have been giving you 30 minute howtos and educational content on how to write down 24 words and put it in a secure place or etch it into steel those people are going to be upset and say that this is a piece of garbage um and then if you build a thing that's write down 24 words or Etch in a piece of Steel then you're going to alienate all the people that are used to venmo so no matter what you do the wallet's going to suck and this actually has roots in history in personal computers in that the original Mass adopted personal computer being the Apple 2 required you to put a dis into the drive type commands on a Texton screen to launch a program which might not run unless you open the box and upgrade the bo upgrade the hardware and there were full hourlong classes on how to use a personal computer and then the Macintosh came out and suddenly you could click on an icon but you couldn't see the command line anymore you couldn't upgrade the computer and people said no don't ever buy this thing because you're going to have to run a program that you and you'll need to upgrade it and there won't be enough memory and so computers sucked and I think that's the phase we're in with cryptocurrencies you're going to piss off somebody and you just don't know who it is that you're going to piss off with whatever you build so that's a challenge and I invite people to try to see the Macintosh Alternatives as opposed to latching on to the Apple twos my addition to that one is that or if I summarize the key is the user experience yes it's not as good as it could be but it's much better than a few years ago basically I would just like that it's like my grandma could basically just log in and feel comfortable she's using anyway already uh tablet to have Skype call so I would like that it's it's in a level that she could use it set up her wallet and basically get started and secondly I think the security is uh uh nonn non-negotiable so basically it means that if anyone is scrolling the the the the crypto Twitter and they see there's lot of airdrop opportunities if they accidentally click any any scam links we need to have across all of the wallet security measures in place that they they don't accidentally sign any uh smart contract approvals that their wallets would be trained so we just need to make sure that we have all of these foundations in place like for example trust wallet has security scanner which does this already but we need to to make sure that users will feel safe that whenever they are Never Getting In World of web tree uh they are fully secure but getting started feeling secure thereafter that that those are the two key points awesome thank you so much gentlemen I'm sorry we got to keep going uh also you broke all the mics so I got to kick you off stage I'm sorry I broke the panel last time thank you so much again for for this [Music]