The idea of digital wallets is not new, but now we have moved beyond that and are talking about Web3 wallets – which allow one to sell or purchase – thereby interacting in some ways on Web3.0. “This removes any scope of human error, increases efficiency and speeds up banking functions such as processing insurance claims, real-time remittances, transparent auditing, streamlined KYC process, smooth peer-to-peer transactions, among others,” Kumar Gaurav, founder, CEO, Cashaa, told FE Blockchain, adding that this can reduce the dependency on a third-party validator or custodian or arbitrator in any kind of financial transaction, giving the actual users of the financial system power and control over their finances, data as well as privacy.
The whole e-payments market is expected to reach $4.8 billion by 2025, as per Kyros Ventures, an investment firm. Furthermore, the number of investments poured into the Web3 wallet applications is approximately $3.3 billion. Recently, the leading web3 wallet company ConsenSys – Metamask raised $450 million, bringing the company’s valuation to $7 billion.
With smooth peer-to-peer transactions and reduced intervention of a third party, financial transactions have come a long way. Experts believe that next-generation wallets will play a key role in managing assets and identities along with tokens. “Web3 wallets can foster financial inclusion by enabling global participation and eliminating geographic restrictions. The open ecosystem surrounding Web3 wallets encourages innovation and the creation of new financial services. Overall, this transition has empowered individuals, increased transparency, and spurred innovation in the financial landscape,” Gaurav VK Singhvi, co-founder, We Founder Circle, explained.
Without the need for a third-party, Web3 wallets do promise full control of the users over their transactions and assets making it more ‘user-oriented’, unlike other digital wallets. But, to what extent is it safe? Naysayers argue that Web3 wallets can be prone to smart contract logic hacks, flash loan attacks, cryptojacking, rug pulls and ice phishing. Furthermore, recently Okto, a digital payment platform, launched its in-built AI-driven, self-custodial wallet space, in partnership with CoinDCX, a crypto exchange platform, and expects to address this ‘ safety’ issue. “The ideal Web3 wallet merges the separate digital wallets used for fiat and cryptocurrencies with the autonomous zero knowledge, zero trust framework empowered by smart contracts (programs). Thus, eliminating transaction delays, errors and fraud while democratising access and returning choice and power to the consumer,” Navdeep Sharma, co-founder, ReelStar, concluded.
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