Author: Kaori, BlockBeats

Editor: Jack, BlockBeats

MetaMask may be facing its toughest challenge since its inception.

Many encryption users have stated that they have uninstalled the MetaMask plugin, and many new encryption users who have entered the circle through inscriptions have not even heard of this name. We have noticed that MetaMask no longer seems to be as indispensable as it used to be. Faced with intensified external competition, the internal product logic of MetaMask is misplaced, leading to a sharp decline in its competitiveness. Despite the bull market in the encryption market, MetaMask is now in a crisis of survival, and its backer ConsenSys, which advocates ideology, cannot implant the user-centric product spirit into its moat.

This is the most intense market competition since the establishment of MetaMask

With the early "zero competition" environment and the support of ConsenSys, MetaMask has gained an unshakable position in the Ethereum ecosystem. However, with the rise of ecosystems such as Bitcoin and Solana, fierce competition from wallet competitors, and the continuous efforts of CEX's Web3 wallet products, MetaMask is facing its most intense market competition since its inception.

Bitcoin and Solana's Strong Rise in the Ecosystem

Last May, the Ordinals protocol gained popularity and the wealth effect began to show. The news of "ORDI per capita thousandfold" spread in various WeChat groups, followed by the appearance of tenfold coins and hundredfold coins such as $NALS, $UTXO, and $ELON in the following days. A large number of users FOMOed into the BRC market, and BRC-20 related WeChat groups, from one group to eight groups, were all full in less than an afternoon. Then, starting in October, with the expectation of Bitcoin spot ETF, concepts related to Bitcoin NFT, infrastructure, and other related concepts centered around inscriptions all saw super high gains. The Bitcoin ecosystem has risen strongly, crushing Ethereum in terms of market volume, price performance, and other dimensions.

In 2023, the "Inscription Summer" was similar to the ICO in 2017 and the DeFi Summer in 2020, injecting a lot of fresh blood into the cryptocurrency world through the wealth effect. Unlike the previous ones that started on Ethereum, this one happened in the Bitcoin ecosystem and then spread to various public chains, including Ethereum.

As an early entry point for buying and selling BRC tokens on the blockchain, the Bitcoin wallet UniSat became a well-known name in the entire cryptocurrency industry. It was one of the few early projects that truly grasped the explosive growth of the Bitcoin ecosystem. According to Dune data, in May 2023, UniSat had a daily user base of around 4,000 to 8,000 people, making it an absolute mainstream player in the market at that time.

By comparing the transaction volume of Bitcoin and Ethereum networks during the same period, it can be seen from the chart that in the second half of 2023, the Bitcoin network will be significantly more active than Ethereum. Therefore, MetaMask, which focuses on the Ethereum ecosystem, did not benefit from the traffic growth.

Other than the rise of the Bitcoin ecosystem, there is also Solana, which has taken the script of a comeback. SOL is one of the leaders in the price increase and rebound in the second half of 2023, with a market value of 43.8 billion US dollars by the end of 2023, a month-on-month growth of 423% and a year-on-year growth of 1106%. Meme coins BONK and JTO led the airdrop charge, bringing the heat of the Solana ecosystem to the forefront. The subsequent meme season even caused Solana DEX trading volume to surpass that of Ethereum, allowing the infrastructure projects of the Solana ecosystem to gain a large amount of revenue, including DEX Raydium and the Phantom wallet.

Phantom is to Solana what MetaMask is to Ethereum, specializing in the non-EVM ecosystem of Solana. Phantom has achieved great success, but it doesn't stop there. In May 2023, Phantom announced that it will also support the EVM ecosystem and allow users to add multiple other wallet products within the wallet. With Solana's strong comeback, Phantom has firmly established itself in the wallet race and has become a formidable opponent that MetaMask cannot ignore.

竞争对手弯道超车

translates to

Competitors Overtaking in the Curve

MetaMask not only faces many competitors in the non-EVM ecosystem, but also another wallet in the Ethereum ecosystem, Rainbow, targets MetaMask's target users through differentiated marketing strategies. Rainbow has launched a points program to attract users through airdrops, and also prepared points for users who have used MetaMask's transaction function. Rainbow regards this challenge strategy as "not a vampire attack, but a fox hunting activity".

Rainbow wallet uses two emojis to represent "Operation Fox Hunt".

Rainbow's special feature is that it integrates Coingecko data and displays token price changes directly on the token trading interface in the plugin. Users can view the price changes of tokens in hourly, daily, weekly, monthly, and yearly scales without having to navigate to other pages. For users, trading tokens often requires checking the price fluctuations of tokens, and this feature fits well with their usage scenarios. In contrast, MetaMask only provides token trading functionality on this interface, and users need to click "Portfolio" to navigate to the web page to view more information such as price increases.

MetaMask's competitors are not just independent wallet products, but also DEX and CEX. On one hand, Coinbase has launched its own wallet, Coinbase Wallet, and on the other hand, Uniswap has launched its own wallet, Uniswap Wallet. Everyone has realized that the wallet is the core starting point in the business scenario. By grasping the wallet, they have the traffic entrance and can form a business closed loop. In this regard, MetaMask's rival is OXK's Web3 wallet.

As mentioned earlier, Unisat became a new force in the wallet industry by seizing the opportunity of the Bitcoin ecosystem, but the biggest winner of BRC-20 is actually OKX and its Web3 wallet. The BRC20 craze sparked by Unisat continued until the end of May 2023, after which the inscription market fell into a slump due to security concerns. However, in June, the launch of BRC20 and Ordinals NFT trading by OKX wallet reignited confidence in the entire Bitcoin ecosystem. In October, the OKX Web3 wallet plugin had a download volume of 200,000, and as of the time of writing, its download count in the Google Store was 500,000.

However, after OKX Web3 wallet gained market share through Mnemonic, it also gave users more unexpected experiences. I realized this when I saw a coin buying tutorial in a certain community. Before this, I had never used any functions other than BRC-20 market for on-chain transactions on the OKX Web3 wallet mobile app. So when I saw this simple trading tutorial, I couldn't believe how easy it was to buy coins on my phone.

At first, the author couldn't even find the entrance to copy the DEX official website, but after completing the transaction through the mobile wallet, everything was as smooth as the Web2 RSS subscription service in terms of experience. However, the mobile end of the Firefox has always had a low presence, and the tool for users to access business scenarios will bring obvious experience segmentation. Specifically, in terms of product data, the registration conversion rate of new users is very low, and the completion rate of calling MetaMask for signature in the mobile business scenario is also very low.

Except for the mobile end, the plugin end of OKX Web3 wallet provides more detailed improvements compared to MetaMask wallet from the UI interface. For example, in the "Select Network" section of the wallet, MetaMask requires manual addition on the left side, while OKX Web3 wallet displays all supported networks on the right side and provides an "All Networks" option for users to view all account assets. In addition to displaying the quantity and balance, the OKX Web3 wallet also displays the current price and change of the currency on the currency display interface.

Left: MetaMask plugin interface Right: OKX Web3 wallet plugin interface

There have been reports from users in the community that there is a conflict between OKX Web3 wallet and MetaMask on the web page. When connecting to the Firefox wallet, the OKX wallet option always pops up, indicating the efforts made by OKX wallet to grab market share from users. However, what should be more valued behind this is that the Web3 industry is transforming from a crypto-punk-friendly financial game to a consumer-friendly application industry. Regardless of the posture, capturing users is the first priority for a product's long-term survival.

Developer-oriented, it's difficult to create new moats for MetaMask

Phantom wallet's CEO Brandon Millman once said, "It's obvious that MetaMask was built by developers for other developers. This actually makes sense because most of Ethereum's early users were developers."

The user education cost of blockchain products is high, and the wallet is the most basic but also the most critical step. MetaMask benefited early on from the support of the Ethereum community, and at that time, the "zero competition environment" was the best barrier for MetaMask wallet to occupy a large market share, and the cost of user education was very low because all users were developers, and developers were all users. This developer-oriented product iteration idea has given many new wallet products that focus on user experience the opportunity to share MetaMask's market share.

In MetaMask's product strategy, user experience is not the primary consideration, or rather, the average consumer user is not the main reference for MetaMask's product development compared to developers. All of this stems from MetaMask's clear positioning of not competing with low-entry wallet categories, but rather expanding the possibilities of open wallets. In the short term, this developer-oriented strategic layout is difficult to establish an effective moat in the current competitive cryptocurrency market and achieve excess returns.

More emphasis on developers

If you are a wallet product builder, you must be familiar with the recent product updates of MetaMask; but if you are just an ordinary end user, the MetaMask you used two or three years ago seems to have no difference in operation experience compared to today's MetaMask.

In October 2020, MetaMask launched its aggregated DEX service "MetaMask Swaps", allowing users to directly exchange tokens based on MetaMask. With this feature, MetaMask finally has a sustainable revenue model, and it is also a rare product update that is friendly to ordinary wallet users.

Wallets remain the breakthrough point for Mass Adoption

MetaMask is still the wallet with the highest market share, but it has not received the same level of praise for its user experience as its status in the industry would suggest. Despite the fact that the entire MetaMask team is highly skilled in technology, they tend to view MetaMask as infrastructure and release development tools for developers rather than consumer projects. This product iteration mindset can also be seen in the launch of MetaMask Snap.

The role of wallets in the blockchain world is very unique. They do not directly store value, but rather serve as an account for users to manage their assets on the chain. Therefore, it is difficult for wallets to establish their own technical moat.

Nowadays, the wallet market has entered a phase of fierce competition for user share. As the product closest to users in blockchain infrastructure, user experience is the simplest and most important way for wallets to establish a moat. MetaMask's developer-centric product strategy and the mission undertaken by the new cycle wallet are mismatched.

By observing users and new technological directions, the most difficult problem is still the account system itself is not user-friendly. It is unrealistic to require a newcomer who wants to enter Web3 to learn how to add RPC in MetaMask. Even for veterans on the chain, the complex process of transferring assets between countless chains, conducting transactions, and staking assets is exhausting.

Last year, Paradigm proposed "intent-centric", a new approach to building Web3 interactive experiences in the crypto world that centers around intention. This approach hides the complexity of previous processes, allowing users to achieve their goals seamlessly and directly. Ideally, users only need to issue an intention command, and all operations can be automatically executed behind the scenes. This concept seems to be the best catalyst for achieving mass adoption for wallets.

"Security" is definitely the lifeline of wallet survival, but "traffic" is more like the shortcoming on the wooden barrel. This article is not intended to criticize different wallets, but simply to observe MetaMask's situation and possible problems in the entire wallet race from the perspective of an ordinary user. And to rely on "intent" to achieve large-scale user adoption, it also depends on the optimization of protocols and infrastructure. When cross-chain infrastructure is not yet perfect, a good wallet may be the most important cross-chain product for ordinary users.

欢迎加入律动 BlockBeats 官方社群：

Telegram 订阅群：https://t.me/theblockbeats

Telegram 交流群：https://t.me/BlockBeats_App

Twitter 官方账号：https://twitter.com/BlockBeatsAsia