“What Crypto Wallets Get Wrong” by Armani Ferrante at Backpack wallet

The original video on YouTube

Armani Ferrante joins Garrett and Mert to discuss what crypto wallets get wrong. Armani is a product genius and the founder behind Anchor, Backpack, xNFTs and Mad Lads.

Summary by summarize.tech

00:00:00–01:00:00

In the YouTube video “What Crypto Wallets Get Wrong” by Armani Ferrante, the founder of several crypto projects discusses the importance of crypto wallets in the ecosystem and their role in keeping up with the fast-paced evolution of Layer 1 networks. Ferrante argues that wallets are the gateway to any L1 ecosystem and their growth potential is crucial. He criticizes the “replace one pie for another pie” mentality, suggesting instead that startups should focus on bringing other chains to their ecosystem. Ferrante also emphasizes the value of open-source wallets for transparency and consistency and uses the analogy of an iPhone to illustrate how a wallet’s capabilities extend beyond just managing transactions. He discusses the importance of distribution, identity, and customization in the crypto world and shares his background and experiences in the crypto space. Ferrante encourages developers to explore new and seemingly ridiculous ideas and emphasizes the importance of objective conversations and hard work in the competitive crypto industry. He also highlights the importance of in-person interaction for leadership and building a successful product.

• 00:00:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong,” Armani Ferrante, the founder of several crypto projects, discusses the importance of wallets in the crypto ecosystem and how they should keep up with the fast-paced evolution of L1 (Layer 1) networks. Ferrante argues that wallets are the gateway to any L1 ecosystem and their growth potential is crucial. He criticizes the “replace one pie for another pie” mentality, suggesting instead that startups should focus on bringing other chains to their ecosystem. Ferrante also emphasizes the value of open-source wallets for transparency and consistency, as they manage private keys and are the central point of trust in a crypto ecosystem. He uses the analogy of the iPhone to illustrate how a wallet’s capabilities extend beyond just managing transactions. Backpack, an open-source wallet project Ferrante is involved with, aims to provide rich developer ecosystems and on-device capabilities.
• 00:05:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the speaker compares a crypto wallet to an iPhone, emphasizing that it is not just a wallet but a blockchain computing device. He explains that the goal of their product, Backpack, is to bring all protocols and blockchains into a single user interface, creating a consumer-friendly product that functions as a platform and open ecosystem. Ferrante discusses the importance of demand generation in the competitive crypto market, specifically mentioning wallets and NFT marketplaces as the most competitive areas due to low barriers to entry and no significant moats. He believes that instead of focusing on competing with other wallets, founders should focus on growing the crypto user base as a whole. Ferrante also shares the inspiration behind Backpack, which is to tokenize code and build an application ecosystem around it, offering features like key management, user identity, and social graph.
• 00:10:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong,” Armani Ferrante discusses the importance of distribution in the context of crypto and wallets. Ferrante believes that distribution is crucial for a product’s success, citing examples like Bitcoin and Dogecoin, which gained popularity due to their innovative distribution strategies. Ferrante argues that both product and distribution are essential, and the first mover doesn’t always win. He shares his personal experience of moving from Myspace to Facebook, which he attributes to the distribution power of the latter platform. Ferrante emphasizes that Twitter’s success lies in its ability to expose new people to the platform and grow personal followings and networks.
• 00:15:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the topic of discussion revolves around identity and distribution in the crypto world, specifically in relation to wallets and social media platforms. Ferrante expresses his excitement about the potential of crypto to distribute at a new level, using Instagram and Facebook as examples due to their vast user bases. He then discusses the concept of having one identity across different apps and whether this is possible in crypto, mentioning Backpack as an example of a restrictive, pseudo-anonymous approach. The conversation then shifts to the topic of multi-chain distribution and the importance of having a presence on multiple chains rather than replacing one with another. Ferrante emphasizes the need for bringing other chains to your project rather than moving to them and using the example of the Mad Lads drop to illustrate this point. He concludes by discussing the importance of distribution in crypto and how Backpack’s focus on mobile and building a normal brand are key features to winning new users.
• 00:20:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the speaker discusses the strategic separation of brands and products in their company, using the example of separating a crypto wallet (Backpack) from their NFT marketplace (Mad Lads). They intentionally did this to distribute the non-crypto aspect of their business on a wider scale and bring users down into crypto. The speaker also mentions the importance of creating new and innovative products, such as Soul abstraction, which combines smart contracts, wallets, and NFTs, and the development of new product experiments like social graphs, messaging, and NFT-gated group chats. They also touch on the topic of native apps versus XNFTs, explaining that XNFTs are just a file format that can point to various things, including native apps, and the main difference lies in the level of friction removal for users when using XNFTs, which automatically connect to wallets.
• 00:25:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, he discusses his background in the crypto space and how he transitioned from Ethereum to Solana. Ferrante started in crypto around 2017, initially drawn to Ethereum due to its world computer concept and the potential for scaling solutions. However, he felt that the ethereum community’s focus on sharding was not the most effective way to approach scaling. Instead, he became interested in Layer 2 (L2) solutions such as state channels and plasma, which eventually led him to Oasis, a company exploring new L1 scaling methods. Although Oasis didn’t work out, Ferrante was intrigued by Solana due to its linear scaling with respect to hardware, which he believed was a more traditional and promising approach to scaling. He joined Solana during its early days, despite the challenges, and was drawn to its potential to offer infinite scaling. Ferrante emphasizes the extraordinary initial conditions of Solana, which he believes are difficult, if not impossible, to recreate.
• 00:30:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the speaker discusses the excitement and buzz surrounding the decentralized finance (DeFi) sector during the summer of 2020. At the time, there was uncertainty about the longevity of crypto, but events like the Sushi Swap yield farming craze and the SBF-Sushi Swap saga fueled renewed interest. The speaker, who had previously worked at Alameda during Solana’s early days, recounts the excitement surrounding the creation of Solana, which promised to bring on-chain, decentralized, and censorship-resistant trading to the space. With significant investment from well-capitalized backers like SPF and the influx of traditional trading firms, Solana became a focal point for traders in the DeFi space. Although Solana has since evolved to become more focused on NFTs, the speaker believes that product-market fit chooses you, and the network’s improvements over the past year have led to renewed optimism for its future.
• 00:35:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the discussion revolves around NFTs (Non-Fungible Tokens) and the role of Metaplex in the Solana ecosystem. The speaker expresses excitement about the potential of blockchain technology to revolutionize economic systems, but acknowledges the current dominance of NFTs and their role in attracting people to crypto. He notes that Solana was chosen due to its speed, but the centralization risks associated with Metaplex, which controls the entire NFT landscape on Solana, are a concern. The speaker argues that a neutral standard is necessary for competitive businesses to thrive and for the ecosystem to evolve. He believes that Metaplex exposed a problem with Solana’s lack of robust interfaces and tooling, and that the solutions are there, but the ecosystem needs to execute on them. The speaker also touches upon the importance of open standards and neutrality in the development of competitive businesses. When asked about his perspective on Ethereum, he mentions that Ethereum has pivoted towards a Cosmos-esque view of the world, with a global settlement layer and Roll-Ups on top.
• 00:40:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the speaker discusses his preference for applications having their own infrastructure layer, specifically in the context of blockchain technology. He uses Cosmos as an example of a system that allows for customization and optimization for unique idiosyncrasies of an application. Ferrante believes that there will be a few large L1s with network effects and specific use cases, but larger applications like MMORPGs or social networks may not be on the same chain. He emphasizes the empowering nature of the serverless model for developers building applications related to asset ownership or economic value transfer, and predicts the coexistence of both global state machines and roll-ups or app chains.
• 00:45:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the speaker discusses his views on the importance of customization and business products in the crypto world, specifically in relation to L2 solutions like Coinbase. He expresses his belief that the ability to customize networks and have open-source and verifiable smart contracts is a significant selling point, although it may not be as marketed as scaling solutions. Armani also shares his perspective on the importance of paying attention to ideas that are met with skepticism in the crypto industry, using examples like NFTs and Solana. He encourages developers to explore new and seemingly ridiculous ideas, as they may turn out to be valuable innovations. The conversation then shifts to work-life balance, with Armani emphasizing that there is no one-size-fits-all answer and that everyone’s goals and contexts are different.
• 00:50:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the speaker discusses the importance of objective conversations and working hard in the competitive crypto industry. He shares his personal experience of working long hours every day without burnout and acknowledges that everyone has different work styles. Ferrante also touches upon the excitement surrounding AI and crypto, and the benefits and challenges of remote versus in-person work. He emphasizes the importance of making quick decisions and having business context to make informed choices. Ferrante concludes by acknowledging that there is no one-size-fits-all answer to work-life balance and productivity in the crypto industry.
• 00:55:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong” by Armani Ferrante, the topic shifts to the importance of in-person interaction for leadership and building a successful product. Ferrante shares his belief that being in person is a significant advantage, particularly for non-engineers, and that the starting point is less important than the decisions and pivots made during the building process. He also emphasizes the importance of storytelling in inspiring people to use technology and the human level improvements it brings. Ferrante’s perspective was influenced by his experience at Apple, where he spent two weeks focusing on building presentations, which taught him the value of effective communication and user experience.

01:00:00–01:05:00

In the YouTube video “What Crypto Wallets Get Wrong” by Armani Ferrante, the importance of clear purpose and consistency in building successful communities within the crypto space is discussed. Ferrante emphasizes the need for founders to have a compelling mission and internal belief, rather than just trying to create a vibe. He also suggests that regulation could be a key lever for improving the crypto industry, and encourages aspiring founders to explore various platforms like Twitter, TikTok, YouTube, Chrome Store, and GitHub for valuable information. Ferrante expresses his excitement about the crypto ecosystem and thanks the audience for joining the first episode of Lightspeed.

• 01:00:00 In this section of the YouTube video titled “What Crypto Wallets Get Wrong,” Armani Ferrante discusses the importance of focus and purpose in building successful communities, using the example of the crypto community. He emphasizes the need for founders to have a clear reason for existence and inspiring people with a compelling mission, rather than just trying to create “vibes.” Ferrante also stresses the importance of internal belief and consistency in building a community, as people can easily detect insincerity. He concludes by stating that consistency and honesty, as exemplified by open-source projects, are key components for aspiring community builders.
• 01:05:00 In this section of the YouTube video “What Crypto Wallets Get Wrong” by Armani Ferrante, the topic shifts to improving the state of crypto and tech in general. Regulation is suggested as a lever to pull for crypto, with a clear rule set being essential. For tech in general, immigration law is proposed as a potential solution. Armani then shares his advice for aspiring founders, encouraging them to start with Twitter and explore related accounts such as xnmt_backpack and Mad Lads NFT. Other platforms like TikTok, YouTube, Chrome Store, and GitHub can also provide valuable information. Overall, Armani expresses his excitement about the crypto ecosystem and thanks the audience for joining the first episode of Lightspeed.