A crypto wallet is the critical piece of infrastructure to access to DeFi, NFTs, and web3 in general. So design decisions are crucial in determining how people will experience the decentralized web.

For the third Wallet Wednesdays Twitter Space (which was split up into part one and part two), we gathered a group of speakers who focus on designing crypto wallets:

The ‘aha moment’ in crypto wallets

When using any app there is always that ‘aha moment’ when you realize that yes, that app is exactly what you need.

To kick off the discussion, speakers shared their views on that aha moment in crypto wallets.

Shalin Pei from Coinbase started with a contrarian note and said that there shouldn’t be any aha moment in a web3 wallet.

“A wallet is just a facilitator to help you get on with whatever you're trying to do. Play with these different apps. Try a game. Buy NFTs. The wallet should fade into the background and help you get your job done as simply as possible.”

Yet Shalin also shared a personal story of experimenting with different wallets early on in her job. After installing and trying almost all wallets that are out there, one particular wallet stood out. With that one, she was buying NFTs, supporting specific artists, and participating in DAOs.

“It felt like me in this very intangible way. Of all the wallets, I felt proudest looking at this one. There is that deep interpersonal connection that we need to figure out in addition to the functional elements.”

This convergence of wallets and digital identity was also previously touched upon in earlier Wallet Wednesdays discussions.

Sergey Chudarin shifted the conversation in a different direction: people don’t read. But they still need to learn a lot of new information in crypto.

David Wu, Growth at Phantom, has said their teams focused on helping people understand why they need to have a wallet:  

“The aha moment is when they realize that crypto is not just for hodling and trading. You can do stuff with your wallet: invest in NFTs, participate in DeFi. And when people really see that, we get increased engagement and higher retention.”

Explaining gas fees and seed phrases

Two aspects of wallet design and user experience stand out as being particularly complicated.

The first one is understanding security and the importance of the seed phrase. And after the wallet is set up, how do we explain what gas fees are and why users need to pay them. Communicating these concepts is not trivial.

Seed phrases are a foreign concept even to people who consider themselves experienced crypto users after trading on centralized exchanges, David Wu noted.

Terminology in the blockchain space is very important and it can help and confuse at the same time, Tanya Efremova said.

When choosing between calling it a seed phrase, a mnemonic, a recovery phrase, or anything else:

“It's best to use terms that the community uses the most and is most comfortable with.”

Shalin raised a slightly different question:

“What is the difference between what should be an industry standard and what should be unique in a specific wallet?”

Some things should be the same and consistent across different wallets. Otherwise, users might get confused when googling ‘what a seed phrase is’ and seeing also mentions of recovery phrases and mnemonics. They might not even realize that those are the same things.  

To counter that, Shalin even suggested a “Wallet Designers Coalition” to come up with some industry standards.

Chintan Turakhia suggested that ‘recovery phrase’ and ‘backup phrase’ sound too safe. Recovery implies that you can get it back. And backup sounds like if I lose it, I’ll be able to save myself. As a result, Coinbase has leaned toward using ‘seed phrase’ as a more technical term.

“We need to communicate that if you lose the seed phrase, that’s it, it’s done. You’re done.”

So key terms require some standardization. Yet standards shouldn’t infringe on user freedom.

Giving people more choice in Web3

Unlike in Web 2.0, in Web3 people have a lot of choices and are not locked up to a particular platform. It’s another important consideration for wallet designers.

Shalin Pei noted that while some things should be consistent across wallets, each wallet might have its own focus. For example, all dapps and wallets should have a standard, recognizable way to connect the wallet. Yet after that, one wallet might offer extra functionality for audio NFTs, and another crypto wallet might excel in DeFi.

“I love the idea that people can have multiple wallets and they can move around them based on what they feel they prefer or the types of their use cases.”

Having standards and guidelines are important for increasing adoption and make crypto products easier to use, Tanya pointed out.

David Wu raised another important point:

“Keeping the ecosystem open is super important. Adhering to certain standards and making things easy to integrate provides a lot of value for users.”

The session wrapped up with a couple of questions from the audience, including:

“Are we building for digital/crypto natives or trying to onboard the normies?”

The speakers agreed that it’s important to build for all. David Wu invited crypto wallets to take inspiration from Google Chrome: a lot of users, no matter how advanced, use the same browser with most complexities hidden. And Shalin highlighted the importance of sourcing different opinions, including from outside the degens and builders.

What’s next for Wallet Wednesdays

Originally we planned to host Wallet Wednesdays for three weeks as an experiment.

Based on the engagement and the fascinating concepts that were covered, we will likely keep the conversation going.

👉 Follow Zerion’s Twitter to catch the next session.