The blockchain is actively developing right now, opening more opportunities for businesses and the customers they serve. And as any actively evolving new infrastructure, it has its twists and turns. One of the most valuable and fragile segments of web3 is a crypto wallet which is an entry gate into this nascent ecosystem. Previously crypto wallets were created by developers and for developers, they are absolutely not usable for technically inexperienced individuals though the level of protection they provide is very high. These are the well-known cold, non-custodial wallets which give full ownership over private keys to users.
After that, a new wave came: convenient, hot (custodial) wallets that are often hosted on the side of centralized exchanges or other service providers. However, user-friendliness and convenience came with the price, users ceased to own their assets. Private keys requested to sign transactions are stored and managed by the exchange or any other third party. At the same time, everyone knows that in web3 you cannot trust anyone. This statement was proved out after some centralized exchanges, such as Quadriga, Mt.Gox, and FTX got compromised and as a result, users lost all their digital assets. Now they say: ‘Not your keys, not your crypto’.
New Types of Crypto Wallets Powered by WaaS
A new trend that we are witnessing right now is the rise of new types of non-custodial wallets which are easy-to-use, yet provide high-level security and protection of users’ digital assets. All that became possible through emerging technologies disrupting traditional self-custodial wallets development and multi-party computation (MPC) is one of them. This complicated encryption technology is a game changer helping to overcome the usability difficulties of cold wallets without sacrificing their non-custodial nature.
Follow CryptoMode on Twitter, Youtube and TikTok for news updates! The next question and at the same time the most important is how a company could manage to build a new type of non-custodial wallet. There are several options we would like to discuss. Let’s say you have some experience in wallet development and your company has a skilled in-house team. There is still one small problem, not many professionals are equally skilled in web2 and web3 wallet software development. Now, it’s getting tricky because even if you obtain superb development skills in web3 but you know nothing about running nodes, adding multiple blockchains to the wallet, the intricacies of MPC encryption technology implementation, etc. you are likely to make some bad mistakes. To escape a fiasco, you have several options:
- prepare a budget and outsource web3 crypto wallet development to blockchain professionals;
- find time and resources to provide a massive learning curve for your existing team;
- or go with Wallet as a Service when all needed pre-built elements for self-custodial wallet development are delivered by one provider.
Benefits of Digital Wallet as a Service Solutions for Businesses
Convenient Wallets
Modern WaaS-based crypto solutions have traveled the long path to user-friendliness and eventually nailed it. The introduction of powerful cryptography, biometric backup used for wallet access and recovery, and other blockchain achievements have truly made crypto wallets convenient and easy to use.
Surge in Sales
Wallet as a Service helps to build products that feature high adaptivity for all types of users: technologically experienced and inexperienced. Such a characteristic leads to facilitated onboarding into Web3 and stimulating users to conduct more financial transactions in crypto.
Minimized Fraud
MPC-powered crypto wallets are highly protected against breaches because instead of a private key which is used in classical self-custodial solutions for transaction signing, an MPC wallet uses several secrets stored in different places. These secrets can only be activated by a user and then, they are used to sign a transaction.
Increased Customer Loyalty and Retention
Solutions built with the help of Wallet as a Service SDK managed to break mass adoption limitations and offer first-class service in digital assets storage and transactions. Adding crypto wallet functionality in your solution will be appraised by the users as it opens up versatile financial benefits offered by blockchain.
Cost-effectiveness
Comparing the budget for crypto wallet development from scratch and its Wallet as a Service analogue the latter leaves the former in the dust. On average, the company spends 10 times more money on development from scratch. I guess, the time has come to change it!
Short Time to Market
Crypto wallet development can be divided into several stages: research, design, building, testing, and launching or web3 deployment. WaaS helps to save time on development by squeezing the whole development cycle into 10-16 weeks instead of 40-60 weeks of development from scratch.
Growth Potential
WaaS helps companies cover their basic needs in terms of affordable crypto wallet development while concentrating on the value that the business is bringing to the world. Crypto wallets often go as stand-alone software or part of the existing solution adding into it crypto functionality. Thus, it helps businesses expand to other markets, work on brand strengthening and increase customer experience by providing them with wider payment options.
Summing Up
Crypto WaaS allows businesses to easily integrate non-custodial wallets into their infrastructure. First and foremost, businesses no longer need to bear the responsibility of safeguarding users’ private keys, mitigating the risk of security breaches and potential liabilities associated with custodial services. By adopting WaaS solutions, businesses prioritize user security and privacy while providing an enhanced user experience for their customers. There is no need for third-party custody that makes users fully aware of their financial reality and lets them stay autonomous, aligning with the principles of decentralization.
None of the information on this website is investment or financial advice. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website.
