Bringing the global crypto and blockchain communities together in Istanbul, Turkey, the Binance Blockchain Week 2023 was a clear indicator that the Web3 ecosystem continues to grow regardless of price movements.
Despite being a Binance event, the conference housed several key players from the crypto industry.
Among them was Trust Wallet, a decentralized Web3 wallet provider acquired by Binance back in 2018. Since its acquisition, Trust Wallet has been widely seen as “the wallet arm of Binance.” This is why the Binance Blockchain Week visitors were caught off-guard when the crypto exchange announced its own Web3 wallet.
Trust Wallet CEO Eowyn Chen — a former vice president at Binance — clarified that “Binance focuses on the centralized, while Trust Wallet works toward the decentralized ecosystem,” adding that Trust Wallet has a neutrality that can serve and partner with anyone in the crypto industry.
“We think that keeping that independence and distance is the best way to keep the culture and the talents running for its own mission.”
Trust Wallet was born in 2017 during the initial coin offering craze due to the need for an accessible mobile wallet, Chen said. “It was the only developer-focused extension wallet out there,” she added. The Web3 wallet focused on onboarding users and developers to a decentralized blockchain world.
“Recently, we became a sister company of Binance rather than operating under Binance because we can have a better playing field,” Chen explained. “We can still partner with each other, and Binance Web3 Wallet is the result of a strategic partnership.”
“Scammers provide better customer support”
Compared to fixing the user experience, solving the security issues across Web3 is trickier, according to Chen. Unlike the app-focused user experience, she noted that security vulnerabilities can occur on blockchains, decentralized applications, smart contracts or even at the code level of a wallet.
Scammers account for the lion’s share of security issues because of the social aspect of fraud, in which social pressures can influence users to ignore security warnings and their better judgment.
Chen said that Trust Wallet’s security team has observed how scams have become much more sophisticated and has begun to provide a customer support experience that guides users who have fallen victim to scams.
Preventing scams and fraud is an incredibly difficult problem to solve: “It’s a community issue; it’s a people issue that requires education. Education takes time, takes effort — no-return effort.” Chen added:
“It takes a community and the whole industry to figure out how to better educate people. That’s the hard part. It’s not a technology issue; it’s an operational problem.”
The smaller scale of new Web3 startups also poses a security challenge for the industry, Chen stated. “I was talking to a security expert yesterday, and they said that many of the new projects choose not to do security audits.” Even if small Web3 projects do security audits, they tend to use less rigorous providers or pick the one with the lowest fee to avoid delays in rollout while saving money, according to Chen.
Web3 competition heats up
In a keynote address, Chen said, “Trust is the best user retention strategy in the bear market.”
User retention is more critical for Web3 due to the open nature of the ecosystem. “The competition probably increased 10 times because there are no barriers to leaving a specific product or service.”
Users can simply take their private keys and move their funds or activity to another service.
However, user retention strategies should not depend on creating a closed ecosystem out of fear of users leaving. Chen stressed, “We actually built trust with the users.”
The firm’s strategy has paid off. Chen said that even in the bear market, Trust Wallet has grown its total downloads by about 60% for the past two years — surpassing 70 million downloads in total. Its market share for weekly active wallet users also doubled from 20% to 40% on mobile.
“When things stand through time, and the project and the team are able to prove that they can handle challenges, they can handle mistakes, and they make people feel comfortable to stick with.”
Whether the Web3 industry is ready for the next billion users depends on the risk appetite and profile of Web3 companies, according to Chen. “Does Web3 offer enough utility and use case scenarios that people are willing to give it a try?” she asked rhetorically, “That’s the key question before onboarding the next billion.”
Blockchain as a universal value transfer system
When asked what her favorite thing about Web3 is, Chen said that her attraction to Web3 is rooted in two main factors: the first is blockchain’s potential to become the value transfer system for the internet. While the internet fulfills the free transfer of information, blockchain builds upon that and allows the transfer of values.
Secondly, she believes in the idea of nonfungible tokens (NFTs), regardless of individual collections’ market performance. “We shouldn’t be just influenced by the sentiment of the market price of the NFTs,” she said, adding, “The tokenization of ownership that gives access to more people is still something that could be valuable, that we can figure out a better mechanism to realize.”
Chen said that innovation around NFTs and utilizing blockchain as a value transfer system will create real value for society.