Our Current Web3 Onboarding Methods are not Sustainable: Solving the Single User, Multi-Wallet Customer Challenge
‘The next billion users into web3’
Mass adoption of web3 is a shared goal among builders, creators, and venture capitalists alike. People in the web3 space probably hear “this is how we’ll get to the next billion users in web3” 3–4 times a day. However, when we are not proselytizing to ourselves, the significant problems that arise from wanton onboarding should be considered more carefully to avoid further market fragmenting and incompatibility.
Amid the myriad factors that are important for us to reach a billion users such as scalability, security, infrastructure, and compelling use cases, one area is ripe for significant improvement: user experience. Today, anyone navigating the web3 space can attest to the fact that using web3 technology is far from straightforward. Onboarding and interacting on-chain still comes with pitfalls and hurdles such as memorizing cryptic strings of words, the constant risk of losing funds, and grappling with bewildering interfaces that lack empathy for end-users.
To reach a billion users any time soon will require real innovation in UX, and while strides are being made in account abstraction, one new area is receiving substantial investment as it’s believed to be a solution to the current web3 onboarding challenges.
Wallet-as-a-Service: how we’re currently bridging the web2 world into web3
Enter the proven drivers of web3 adoption: wallet-as-a-service (WaaS) companies. Magic.link is one example of these companies and they have recently secured a staggering $52 million in investment. What could justify such a sum?
The WaaS business model is simple. Their solution involves taking a step back into web2 by enabling the creation of wallets (many of which are custodial) in a web2 manner, where all you need is an email and password. By repackaging the web3 experience in a familiar web2 process, WaaS companies are onboarding web2 users into web3 with a seamless onboarding experience. Users aren’t even aware the blockchain is being used but companies and their customers can now reap the benefits of web3 infrastructure.
With hundreds of big-name brands entering web3 in recent years without the know-how to provide seamless onboarding, companies are flocking to WaaS providers like bees to honey. With onboarding improving by orders of magnitude, we’re potentially closer than many in the industry think to getting to a billion users.
Welcome to the future: a custodial, fragmented wallet landscape
So, it sounds like a perfect match, doesn’t it? Not quite. While the rush to onboard new users appears to be a triumph, and the progress has been laudable, the consequences should not be taken lightly. One of the consequences of the WaaS solution is that as web2 companies adopt these services, users end up with multiple, often custodial, wallets which are not easily unified into a coherent persona. This problem becomes more significant over time, as users accumulate more wallets on multiple chains as they interact with different companies and brands, with each wallet holding distinct assets.
Picture this: Alice is a customer of Company A and Company B and each uses a different WaaS company. As Alice, like the majority of new web3 users, is uneducated on wallets, she sets up a new wallet with each company to interact by easily signing up with an email and password. The fragmentation compounds over time as Alice sets up more wallets as required each time she interacts with a new company or brand, meaning her assets are spread across many wallets. This is an inefficiency, but interestingly, this inefficiency is a feature of the WaaS model rather than a bug: the experience has to be siloed, as Company 1 should not have access to the wallet of Alice that controls the assets of Company 2.
The experience of the internet of value will therefore effectively be akin to having 100 bank accounts with $10 in each of them. Another example specific to interoperability would be to have a different phone number for every phone company, and group of people. In order to call people using phone Company C, you would need a phone from phone company C. Infrastructure is only adopted by the masses when it makes sense to them as users.
That is a real problem, both for individuals and for the companies that service them. With this fragmented identity, trying to get a loan in DeFi or unlock token-gated experiences or discounts in eCommerce will be all but impossible. The task becomes so burdensome that most will not try, and the full potential of web3 goes untapped. To be clear, having multiple wallets in web3 helps with privacy and security, and some level of fragmentation of a person’s web3 identity should in fact be encouraged at this time. However, with the (natural) success of the WaaS model, we are headed to an extremely fragmented web3 experience.
For the companies actually onboarding their users into web3, the repercussions are vast. Companies can no longer grasp their users, as each wallet holds a fragment of their identity. In doing so, a wealth of data becomes inaccessible, as customer data is not easily unified into a coherent persona.
Marketing is now a shot in the dark
Across the globe, marketers are scratching their heads on how to deal with the paradigm shift web3 brings. The traditional marketing suite of a web2 company is being ripped up because data is moving from company silo to wallet, meaning they can no longer rely solely on having traditional email linked accounts. Tracking goes out the window, especially in light of the sunsetting of third party cookies.
Perhaps more shockingly, even companies who are trying to leverage the available web3 data are struggling. There is currently no way of understanding a complete profile of each customer, despite the wealth of data, due to the fragmented wallet landscape. As identities become more fragmented, web3 marketing will increasingly become a complete a shot in the dark, and personalization becomes a distant dream.
What we need
We must change course. We need to help people onboard with wallets in a sustainable way meaning they’re non-custodial, their assets can be ported around as a unified identity and there is the right education available so people can manage multiple wallets in a way which ensures privacy and security.
From a company perspective, there needs to be easy to implement solutions that allow customers to be understood, so we can create the level of experience they’ve come to expect in the web2 world. Targeted personalization is the key, leading to enhanced onboarding, conversion, and retention rates.
Proposed solution for companies: AddZest’s Unified Wallet Profiles
Instead of obsessing over wallets, companies need to focus on the individuals behind them. We must consolidate the myriad wallets that users accumulate across various touchpoints and devices into a unified identity. Only then can we unlock web3’s true potential.
AddZest’s Unified Wallet Profiles (UWP) addresses the fragmentation issue. Instead of focusing on wallets, UWPs consolidate the various wallets that users accumulate into a single, unified identity. AddZest identifies unique users through various identifiers like browser fingerprints, hardware IDs, wallet addresses etc., culminating in the most holistic understanding of web3 users.
The solution is easy to implement and capable of tracking a wide range of data points on users. AddZest’s code snippet, installable within 30 seconds on any website, empowers companies to track over 1000 data points on every visitor across wallet, on-chain and first party data.
Here are just a few of the insights this unlocks:
- Understand the % of your users who are web3.
- Understand whether your user is web3, before they’ve even connected a wallet.
- Understand the identity of your user across all their wallets.
- Understand the interaction touch point of users across different devices and locations.
The winners in this space will be the companies with the deepest insights into their users. Our technology not only facilitates advanced analytics but also powers use cases throughout the web3 marketing spectrum, including personalization, CRM, advertising, community and loyalty programs.
AddZest Unified Wallet Profiles are the bedrock of the future web3 marketing suite in an increasingly multi-wallet landscape.
