Juggling with Private Key Management? Switch to Embedded Crypto Wallets
The rising awareness around blockchain and cryptocurrencies has resulted in a surge in crypto wallets and its users If we look at previous year’s data, there were 84M+ global crypto wallet users, increasing rapidly. However, we expect the existing crypto wallet user base to be much bigger as cryptocurrencies are booming right now So, what could be the main reason behind the slow or we can say less than anticipated adoption of Web3/crypto wallets? The answer is bad user experience, which is mainly caused through wallet key management. ‘Embedded Wallets’ are now coming to bring a solution to the challenges associated with key-based crypto wallets Let’s dive in and understand the whole concept of embedded wallets Before that We’ll first look at the problems that frustrate crypto wallet users
The problem with traditional crypto wallets & adoption
Most of the crypto wallets that are at present in use (including MPC wallets), are associated with critical risks and challenges, with:
● Single-signature wallets –
A Single-signature wallet will make you lose your private key forever; if you upload the key to a wrong website, lose the device or forget the backup seed phrase A small mistake can ruin the entire wallet setup and lead to issues like loss of funds, inability to access important information, and similar problems
● Traditional Hardware wallets–
Efficient Transaction Management
Account abstraction-powered embedded wallets allow dApps to batch multiple user transactions into one, saving time and gas fees This feature, coupled with the ability to execute transactions directly within dApps, ensures a smoother, faster, and cost-efficient transaction execution process
Developer-Friendly Approach
Embedded wallets provide developers with critical tools like APIs, SDKs, and easy-to-use interfaces for integrating wallets into their dApps Using these resources, dApp developers can efficiently manage wallet-based features, troubleshoot transaction logs, request testnet tokens, and define team roles, all across a unified environment.
Cost Efficiency
Although dynamic recovery options is the key offering of embedded wallets, they are also optimized for novel features such as gasless or sponsored transactions, batch transactions, account abstraction (ERC-4337), and many other custom requirements By enabling this, embedded wallets remove the need for third-party services to be opted externally. Hence, application developers and users save on significant operational costs, both in short and long-run
Broader User Adoption
Embedded wallets remove complexities from blockchain’s entrypoint with concepts like email and social onboarding This makes dApps more user-friendly and approachable for all sets of users, including the beginners that are exploiting a wallet. By reducing barriers, embedded wallets attract a larger and more diverse audience, accelerating the adoption of decentralized technologies
Seamless Recovery Options
Easy recovery mechanisms, such as email-based recovery and device-linked key reconstruction, or even multi-device accessibility ensure users can regain access to their wallets even if they lose their credentials. This feature significantly reduces the risk of permanent asset loss However, a good keyless account is one that does not reveal any confidential information of an OIDC account on users’ end; like OAuth identifiers or email address.
Branding & customization option:
Embedded wallets are equipped with SDKs and stack that allow dApps to bring their intent-specific branding and customization into their user onboarding process For example, a dAPp can have features like seamless payment, enhanced storage, or a different login approach While this offers specific features for apps, it also allows them to stay competitive in the web3 ecosystem.