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The Future of Global and Embedded Wallets

https://www.dynamic.xyz/blog/the-future-of-global-and-embedded-wallets
The Future of Global and Embedded Wallets
The Future of Global and Embedded Wallets
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With the rise of embedded wallets, a vital topic to think through is interoperability. That is, how do siloed wallets turn into global wallets. In this blog post we explore a few paths to consider.


Note: approaches 1-3 are simpler; 4-7 more complex; discuss more on warpcast.

Definitions:

Embedded wallet: Usually an email/phone/social-based wallet (e.g. Dynamic).

Branded wallet: MetaMask, Coinbase Wallet, Rainbow, etc. (a consumer brand; has distribution).

AA embedded wallet: A layer on top of the EOA embedded wallet (e.g. Alchemy or Zerodev).

1: Key replication to a branded wallet

User starts with an embedded wallet. They replicate their private key / mnemonic phrase and import it into Coinbase Wallet / MetaMask, etc.

Pro: user can still use the embedded wallet after replication

Con: direct key interaction is risky


2: Embedded wallet WC connection

Give the embedded wallet connection capabilities via WalletConnect and allow it to connect to any 3rd party site.

Pro: straightforward for web3 users

Con: you still end up with a bunch of wallets; web2 users don't know WC


3: Asset migration

Either via EOA or AA, you “export” your assets into your branded wallet. Embedded wallet becomes less useful after asset export.

Pro: easy way to move things

Con: your embedded wallet becomes useless thereafter


4: Branded+embedded wallet

The embedded wallet becomes a branded wallet as well. User logs in with same credentials into embedded wallet that they do into the branded wallet.

Pro: email/social login everywhere

Con: requires distribution

5: Linking/unlinking signers

User starts with an AA embedded wallet. The user can link their global wallet as a new signer into the AA wallet, and view/take actions from their global wallet.

Pro: easy linking/unlinking

Con: requires wallets to show AA accounts

6: Multiple wallets with identity hub

Your Farcaster etc profile keeps track of your multiple embedded wallets. They are separate, but you have a profile in Farcaster that centralizes all of them.

Pro: Farcaster

Con: Requires significant planning

7: Secret EIP proposals

We solve this in another way with some architecture changes to EVM and other networks, and hope for the best.

Pro: it's a secret

Con: it's a secret

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https://www.dynamic.xyz/blog/the-future-of-global-and-embedded-wallets
Itai Turbahn

Itai is the co-founder and CEO of Dynamic Before Dynamic, Itai spent 7 years in product management leadership positions, and was previously a consultant at the Boston Consulting Group. Itai holds an MBA from Harvard Business School and B.Sc degrees in EECS and Economics from MIT.

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