$180 million in experience and lessons: The current entry point of Web3 is not social, but wallets

Author: Blockchain Knight

Recently, Dan Romero, the founder of Farcaster, which was once highly anticipated for Web3 social, clearly stated in an open letter that after 4.5 years of exploration, the "social-first" approach has been proven unfeasible, and the future will focus entirely on wallet product development, because "every new and retained wallet user is a new user of the protocol."

This star project, which has raised a total of $180 million and is valued at nearly $1 billion, has provided important commentary on the competition for entry points in the Web3 industry with an almost "admission of error" stance.

This shift reflects the core differences between Web3 and Web2. In the internet era, social interaction is undoubtedly a super entry point for traffic aggregation.

Facebook has connected 2.9 billion users globally through social relationships, while WeChat has derived full-scenario services such as payment and office work based on social interaction, making social attributes the "traffic cornerstone" of internet products.

However, the core of Web3 is value interaction rather than information transmission. The primary need for users entering the ecosystem is to manage digital assets and complete on-chain activities.

This makes wallets, which carry private key management and asset interaction functions, naturally the entry-level products of Web3. Farcaster's transformation is essentially an acknowledgment of this logic, but is this really the endgame for Web3 entry points?

Why are wallets becoming increasingly important?

The core value of wallets stems from their irreplaceability as entry points for on-chain interaction.

Unlike the account-password system of internet products, in the Web3 world, wallet addresses are the unique identity identifiers for users, and private keys are the certificates of asset ownership.

Whether configuring crypto assets, participating in DeFi, or using on-chain applications, all operations must be initiated through the wallet for signature verification, making wallets the "first door" for users entering the Web3 ecosystem.

Especially the explosive growth of on-chain users in the past two years has further amplified the strategic value of wallets.

With the maturity of Ethereum L2 technology and the revival of the Solana ecosystem, along with the entry of traditional financial institutions, the scale of active on-chain users continues to expand.

Dune data shows that by the third quarter of 2025, there will be 830 million active crypto wallet addresses globally, of which 82% have initiated on-chain transactions within 30 days, and the number of DApps connected to wallets has increased by 117% compared to last year.

At the same time, the rise of DEX and the erosion of CEX's market share further highlight the irreplaceability of wallets.

Since 2025, the market share of DEX has risen from 10.5% at the beginning of the year to 19% by the end of the third quarter, while the futures market share has increased from 4.9% to 13%.

In the third quarter, global DEX spot trading volume reached $1.43 trillion, a 43.6% increase from the previous quarter, setting a new historical high.

The core logic of this transformation is the user's pursuit of asset autonomy. By connecting to DEX through wallets, users no longer need to entrust their assets to exchanges, achieving "I control my assets," and this trend is driving wallets to upgrade from tools to ecosystem entry points.

Moreover, the layout of traditional financial institutions further confirms the industry position of wallets. For example, Bank of New York Mellon has adopted MPC (Multi-Party Computation) to launch custodial wallets, providing secure asset storage services for institutional clients.

BlackRock has even stated that the company's goal is to replicate everything in today's traditional finance into digital wallets.

The entry of these traditional institutions not only brings incremental users to the wallet sector but also promotes wallets to become the core bridge connecting traditional finance and Web3.

Competition Among Giants: Layout and Game in the Wallet Sector

In the face of the strategic value of the wallet sector and the challenges faced by CEX, giants in the crypto industry have begun comprehensive layouts, with the development paths of Coinbase, Binance, and OKX forming a new landscape in the industry.

As a compliance benchmark in the U.S., Coinbase's wallet product is deeply integrated with its exchange ecosystem, allowing users to seamlessly achieve a closed-loop operation of "fiat purchase - on-chain interaction - asset transfer back."

With the reform of the Base chain this year, the Coinbase wallet has become the main interaction entry point on that chain, attracting developers and users through fee subsidies and other means, forming a comprehensive platform that integrates finance, messaging, content creation, and decentralized applications.

Binance, on the other hand, leverages its scale advantage to build a "full-scenario wallet ecosystem," with its wallet product integrating public chain interaction, staking, Launchpad, and other full-link services.

Inspired by OKX's open ecosystem, Binance launched a CEX-DEX seamless trading feature in August 2025, allowing users to directly call the liquidity of related DEXs through their wallets without needing to transfer assets across platforms.

Among the wallet layouts of the three giants, OKX's forward-looking strategy is the most leading. As early as 2023, OKX broke out of the limitations of a single public chain and established a "multi-chain first" development strategy.

Its wallet has steadily supported asset storage and interaction for 130 public chains, making it one of the wallet products with the most supported public chains in the industry.

At the same time, with the core code of the OKX wallet fully hosted on GitHub, its open-source transparency has won the trust of global developers, through standardized open API interfaces.

Currently, it has integrated with thousands of decentralized applications, forming an ecological matrix covering almost all on-chain activities, and open-source has also become a new trend in the industry.

OKX is also the first institution to support direct connection wallets for exchanges. It is said that they built a technical team of hundreds of people and spent millions each month to create this wallet, which is quite popular among users.

They have also entered the originally crowded wallet sector with a leading position and have become a top product in Web3. Such foresight and willingness to invest money are indeed rare.

Thanks to OKX's early layout, Coinbase and Binance have also gradually seen opportunities and chosen to follow suit strategically, which has become a major focus for exchanges this year.

Currently, almost all have formed their own wallet ecosystems to meet the growing demand for on-chain economic activities, which has also promoted the expansion of wallets' ecological status.

Is the Landscape of Web3 Entry Points Set? The Answer Is Not Certain

Although wallets have currently established a core position as entry points for Web3, it is still too early to assert that "the landscape is set," as there are still some variables in the current Web3 entry point pattern.

Looking back at the industry's development, the focus of entry points has undergone two key migrations: early user demand was concentrated on exchanges, with CEX becoming the absolute entry point due to its advantages in deposits and withdrawals, once monopolizing industry traffic.

As Ethereum smart contracts emerged, the DeFi and NFT ecosystems exploded, and the demand for asset autonomy pushed the focus of entry points to wallets, which gradually took on core functions such as DApp interaction and asset management.

Today, this pattern is still dynamically evolving.

In the future, with technological iterations, the entry point pattern may further evolve. The combination of AI and wallets is already taking shape, with some products enabling natural language interaction and intelligent risk warnings through AI agents, making wallets more aligned with the needs of ordinary users.

At the same time, the popularization of account abstraction may lower the usage threshold for wallets, further pushing entry points downwards.

Just as the browser entry point in the early days of mobile internet was eventually diverted by social and e-commerce, the Web3 industry is still in its early stages, and technological iterations and demand evolution may still give rise to new entry forms.

But it can be confirmed that, against the backdrop of financial activities moving on-chain becoming a clear trend, the core value of wallets will continue to strengthen.

As OKX CEO Star stated during a recent appearance at Abu Dhabi Finance Week, the internet era is creating a brand new on-chain economy, and in the coming decades, approximately 50% of global economic activities will operate on blockchain.

Correspondingly, the scale of crypto asset custody by traditional financial institutions has grown by 120% this year.

Behind these figures is the continuous prosperity of on-chain economic activities, and wallets, as the core tools for asset management and interaction, will directly benefit from this trend.

Of course, looking back at Farcaster's transformation is not the end but the starting point for the Web3 industry to return to the essence of value.

The entry point of the internet connects people, while the entry point of Web3 connects people with value (and in the future may also connect machines with machines). This core difference determines the irreplaceability of wallets.

For industry participants, whether continuing to delve into wallet technology innovation or exploring the integration of wallets with other scenarios, the core should be user asset security and experience optimization.

The competition for entry points in Web3 may not be over yet, but wallets have already become the most certain winners in the current stage due to their unique value.

So, who will be the next winner in this sector?