Recently, Dan Romero, founder of Farcaster, a project once hailed as a promising Web3 social platform, stated in an open letter that after 4.5 years of exploration, the "social-first" approach has proven unworkable. He added that the company will now focus entirely on wallet product development because "every new and retained wallet user is a new user of the protocol." This star project, which has raised $180 million in funding and is valued at nearly $1 billion, provides a significant commentary on the battle for entry points in the Web3 industry with its near-admission of failure. This shift reflects the core difference between Web3 and Web2. In the internet age, social networking is undoubtedly a super gateway for traffic aggregation. Facebook connects 2.9 billion users worldwide through its social relationship chain, and WeChat, based on social networking, has developed full-scenario services such as payment and office work. Social attributes have become the "traffic cornerstone" of internet products. However, the core of Web3 is value interaction rather than information transmission. Users' primary need when entering the ecosystem is to manage digital assets and complete on-chain activities. This makes wallets, which handle private key management and asset interaction, naturally entry-level products for Web3. Farcaster's transformation is essentially an endorsement of this logic, but is this truly the end for Web3 entry points? Why are wallets becoming increasingly important? The core value of wallets stems from their irreplaceable role as on-chain interaction entry points. Unlike the account and password systems of internet products, in the Web3 world, a wallet address is a user's unique identifier, and a private key is proof of asset ownership. Whether configuring crypto assets, participating in DeFi, or using on-chain applications, all operations must be verified through wallet signatures, making the wallet the "first gate" for users entering the Web3 ecosystem. Especially with the explosive growth of on-chain users in the past two years, the strategic value of wallets has been further amplified. With the maturity of Ethereum's L2 technology, the resurgence of the Solana ecosystem, and the entry of traditional financial institutions, the scale of active on-chain users continues to expand. Dune data shows that in the third quarter of 2025, there were 830 million active crypto wallet addresses globally, of which 82% initiated on-chain transactions within 30 days, and the number of DApps connected to wallets increased by 117% year-on-year. Meanwhile, the rise of DEXs and the erosion of CEX market share further highlight the irreplaceable nature of wallets. Since 2025, the market share of DEXs has increased from 10.5% at the beginning of the year to 19% at the end of the third quarter, while the share of the futures market has also increased from 4.9% to 13%. Global DEX spot trading volume reached $1.43 trillion in the third quarter, a 43.6% increase compared to the previous quarter, setting a new historical record. The core logic behind this shift is users' pursuit of autonomy over their assets. By connecting wallets to DEXs, users no longer need to entrust their assets to exchanges, realizing "My assets, my control." This trend is driving wallets to upgrade from tools to ecosystem gateways. Furthermore, the deployments of traditional financial institutions further confirm the industry position of wallets. For example, Bank of New York Mellon has launched a custodial wallet using MPC (Multi-Party Computation) to provide secure asset storage services for institutional clients. BlackRock went even further, stating that its goal is to replicate everything in traditional finance today into digital wallets. The entry of these traditional institutions has not only brought incremental users to the wallet market but has also propelled wallets to become a core bridge connecting traditional finance and Web3. Giants Compete: The Layout and Game in the Wallet Market Faced with the strategic value of the wallet market and the challenges faced by CEXs, crypto industry giants have launched comprehensive deployments, with the development paths of Coinbase, Binance, and OKX forming a new landscape for the industry. As a US compliance benchmark, Coinbase's wallet product is deeply integrated with its own exchange ecosystem, allowing users to seamlessly achieve a closed-loop operation of "fiat currency purchase - on-chain interaction - asset transfer back". With the reform of the Base chain this year, the Coinbase wallet has become the main interaction portal on the chain, attracting developers and users through fee subsidies and other means, forming a comprehensive platform integrating finance, messaging, content creation, and decentralized applications. Binance, leveraging its scale advantage, has built a "full-scenario wallet ecosystem," integrating public chain interaction, staking, Launchpad, and other full-chain services into its wallet products. Inspired by OKX's open ecosystem, Binance launched seamless CEX-DEX trading in August 2025, allowing users to directly access liquidity from relevant DEXs through their wallets without cross-platform asset transfers. Among the wallet strategies of the three giants, OKX's forward-thinking approach is the most pioneering. As early as 2023, OKX broke free from the limitations of a single public chain and established a "multi-chain priority" development strategy. Its wallet stably supports asset storage and interaction across 130 public chains, making it one of the wallet products in the industry with the most supported public chains. Meanwhile, with the OKX wallet's core code fully hosted on GitHub, its open-source transparency has earned the trust of developers worldwide through its open and standardized API interfaces. Currently, it has integrated with thousands of decentralized applications, forming an ecosystem matrix covering almost all on-chain activities, and open source has become a new trend in the industry. OKX was also one of the first institutions to support direct wallet connections between exchanges. It is said that it built a technical team of hundreds of people and spent millions of dollars every month to create this wallet that is so popular with users. OKX has also entered the originally crowded wallet market with a commanding lead and become a leading Web3 product. It has to be said that such foresight and willingness to invest heavily are truly rare. Thanks to OKX's early strategic planning, Coinbase and Binance also saw the opportunity and chose to follow suit strategically. This has become a major focus for major exchanges this year. Currently, almost all of them have formed their own wallet ecosystems to meet the growing demand for on-chain economic activities, which has also boosted the expansion of wallets' ecosystem status. Is the Web3 gateway landscape already set? The answer is not necessarily. While wallets have established themselves as a core gateway to Web3, it's premature to declare the situation "set in stone," as the current Web3 gateway landscape remains somewhat uncertain. Looking back at industry development, the focus of gateways has undergone two key shifts: Early on, user demand was concentrated on exchanges, with CEXs becoming the absolute gateway due to their deposit and withdrawal advantages, once monopolizing industry traffic. However, with the rise of Ethereum smart contracts and the explosion of the DeFi and NFT ecosystems, users' demand for asset autonomy has driven the focus of gateways to wallets, which are gradually taking on core functions such as DApp interaction and asset management. This landscape is still evolving dynamically. In the future, with technological iterations, the entry point landscape may further evolve. The integration of AI and wallets is already taking shape; some products use AI agents to achieve natural language interaction and intelligent risk warnings, making wallets more accessible to ordinary users. Meanwhile, the widespread adoption of account abstraction may lower the barrier to wallet use, further pushing entry points to lower-tier markets. Just as the browser as the gateway to the early mobile internet was eventually diverted to social media and e-commerce, the Web3 industry is still in its early stages. Technological iterations and evolving needs may still give rise to new gateway formats. However, what is certain is that with the trend of blockchain-based finance becoming a clear priority, the core value of wallets will continue to strengthen. As OKX CEO Star stated at the recent Abu Dhabi Financial Week, the internet generation is creating a completely new on-chain economy, and in the coming decades, approximately 50% of global economic activity will run on the blockchain. Correspondingly, the scale of crypto asset custody by traditional financial institutions has grown by 120% this year. Behind these figures lies the continued prosperity of on-chain economic activity, and wallets, as core tools for asset management and interaction, will directly benefit from this trend. Of course, looking back at Farcaster's transformation is not the end, but the starting point for the Web3 industry to return to its core value. The internet's gateway is connecting people, while the Web3 gateway is connecting people with value (and in the future, possibly connecting machines). This core difference determines the irreplaceable nature of wallets. For industry participants, whether continuing to deepen wallet technology innovation or exploring the integration of wallets with other scenarios, user asset security and experience optimization must be the core focus. The battle for Web3 entry points may not be over yet, but wallets, with their unique value, have already become the most certain winner in this stage. So, who will be the next winner?
Catherine
Anais
Weatherly
Kikyo
Alex