James Cirrone

Crypto wallets are becoming an even bigger entry point for new users than centralized exchanges.&nbsp;



That’s according to Phantom co-Founder and CEO Brandon Millman who spoke Monday at the Permissionless conference in Austin, Texas.



And that’s why the phrase that anyone who’s been paying attention to crypto for half a minute has come across — “how do we onboard the next billion users” — is fundamentally flawed in Millman’s view.



“The space really needs to focus on…retention of users, and not actually trying to onboard all these net new users,” Millman said. “It doesn&#8217;t matter if you onboard a billion users if your retention is zero, because then you end up with no users.”



Having good security in place is the first step toward getting people to stick around. That’s because if they fall victim to a phishing scheme, it makes it dramatically less likely for them to persist in crypto.



However, the assembled panelists seemed eager to move away from seed phrases, a security measure that’s so rigid it can lock the end user out of their account.&nbsp;



Look no further than <a href="https://www.nytimes.com/2021/01/12/technology/bitcoin-passwords-wallets-fortunes.html">Stefan Thomas</a>, a programmer who has hundreds of millions of dollars worth of bitcoin trapped in a wallet to which he lost the password.



Braavos co-founder and CEO Motty Lavie went as far as to say that seed phrases are “almost the root of all evil.”



Braavos, a smart contract wallet, uses two-factor authentication, biometric authentication and a seed phrase, widening the ways users can access their assets. This, essentially, is a form of account abstraction, which can allow users to recover their funds in the event of losing their seed phrase.&nbsp;



A subsequent panel weighed the evolution of account abstraction and its benefits —&nbsp;chief among them being gasless payments.&nbsp;



Stackup co-founder and CEO John Rising described gas payments as a “huge barrier of entry that has now been knocked down by smart accounts” and paymasters.



“A paymaster is an entity that exists on-chain that can basically sponsor transactions for people. So if you have a marketplace, and you want creators to publish things to your marketplace, you can effectively pay for gas for that,” Rising said.



Still, even if account abstraction became the norm, panelists said crypto wallets would need to evolve to handle customer issues in a more standard manner.&nbsp;



As Lavie put it, people will inevitably make mistakes. They’ll click on links they shouldn’t click on and they’ll transfer funds they shouldn’t have transferred. 



Read more: <a href="https://blockworks.co/news/researcher-security-crypto-wallets">Researchers flag security concern for users of certain crypto wallets</a>



Millman and fellow panelist Jason Lau, OKX’s chief innovation officer, emphasized that providing customer support through standard, time-tested systems is the way to go.&nbsp;



“For some reason, crypto and Web3 don’t really take much inspiration from all of the customer support techniques that have been developed over many decades on Web2 and instead opt for sending people into a Discord channel,” Millman said.&nbsp;



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Wallet providers emphasize security as top hurdle to overcome

Jacquelyn Melinek

<div id="highlights-block_61cd8f04064bd" class="highlights">
 <ul>
 <li>Phantom saw a 4,400% increase from 40,000 users in July to 1.8 million users in December</li>
 <li>Its mobile application is aiming for an iOS launch at the end of January or first week of February, Milman said</li>
 </ul>
 
</div>



Solana-focused crypto wallet Phantom is looking to onboard a lot more users and is aiming to have more than 10 million weekly active users in 2022, Brandon Millman, co-founder and CEO of Phantom told Blockworks.&nbsp;



“Somewhere in the 10 [million] to 50 [million] range is what we’re shooting for,” Millman said. “It’s really hard to say where exactly it’s going to land, especially because the macro crypto environment is such a huge factor as well,” he added.&nbsp;



For reference, Phantom was undergoing beta testing in April 2021 and saw a 4,400% increase from 40,000 users in July to 1.8 million users in December. Phantom hit 1 million users in November and at the end of December, its weekly active user count reached about 1.8 million, Millman said.



In July, Phantom closed a <a href="https://cms.blockworks.co/andreessen-horowitz-leads-9m-series-a-round-for-crypto-wallet-phantom/">$9 million Series A</a> round led by Andreessen Horowitz, or a16z. Millman said there has been a lot of interest from investors since then, but there are no additional funding rounds to announce at this time.&nbsp;



<h3 class="wp-block-heading">Shifting its mindset to support Solana users&nbsp;</h3>



<div class="wp-block-image"><figure class="alignright size-medium"><img loading="lazy" decoding="async" width="214" height="300" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg" alt="Brandon Millman" class="wp-image-13320" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=214 214w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=732 732w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=1097 1097w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=1463 1463w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=184 184w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=186 186w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=156 156w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Brandon-Millman-1-214x300.jpg?w=57 57w" sizes="auto, (max-width: 214px) 100vw, 214px" /><figcaption>Brandon Millman, co-founder and CEO, Phantom; Source: Phantom</figcaption></figure></div>



The three co-founders, Millman, CPO Chris Kalani and CTO Francesco Agosti all left their roles at 0x, an open protocol crypto infrastructure startup, to create Phantom in the Spring of 2021.



“We were quite deep in the Ethereum space and we really wanted to create a MetaMask competitor,” Millman said. “We had a lot of ideas on how to make the wallet part of Web3 better,” he added.&nbsp;



The original goal was to create a multi-chain version of MetaMask with a focus on DeFi and NFTs, but as the Phantom team saw extreme growth, they’ve shifted their mindset to supporting Solana and making it the best option for Solana wallet users, Millman said. Wallet users can store, send, receive, stake and swap tokens on the Solana blockchain.



Additionally, non-fungible tokens saw exponential growth this year, which contributed to Phantom&#8217;s success because it allows wallet holders to trade and hold Solana-based NFTs, through NFT marketplaces like Solanart. Although Solanart is one of many NFT marketplaces that Phantom connects to, it has had 541,851 total sales with a total SOL volume of 4,532,922, which is about $797,794,272, according to its <a href="https://solanart.io/" target="_blank" rel="noreferrer noopener">website</a>.&nbsp;



<div class="wp-block-image"><figure class="alignleft size-medium"><img loading="lazy" decoding="async" width="169" height="300" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Image-from-iOS-1-169x300-1.jpg" alt="" class="wp-image-13332" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Image-from-iOS-1-169x300-1.jpg?w=169 169w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Image-from-iOS-1-169x300-1.jpg?w=576 576w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Image-from-iOS-1-169x300-1.jpg?w=144 144w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Image-from-iOS-1-169x300-1.jpg?w=147 147w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Image-from-iOS-1-169x300-1.jpg?w=123 123w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Image-from-iOS-1-169x300-1.jpg?w=45 45w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Image-from-iOS-1-169x300-1.jpg?w=750 750w" sizes="auto, (max-width: 169px) 100vw, 169px" /><figcaption>Phantom&#8217;s mobile app in beta; Source: Phantom</figcaption></figure></div>



Despite enormous growth, the desktop browser-based crypto wallet has no plans to slow down. In addition to expanding to over 10 million users, the company is working on finishing up its mobile applications for iOS and Android, Blockworks previously <a href="https://cms.blockworks.co/phantom-wallet-launches-mobile-version-to-bring-solana-to-smartphones/" target="_blank" rel="noreferrer noopener">reported</a>.&nbsp;



Phantom’s mobile application is currently in beta testing and although it doesn’t have an exact launch date yet, it is aiming for an iOS launch at the end of January or the first week of February, Milman said. Its Android application would follow shortly after.&nbsp;



“The long-term vision is if someone wants to use a blockchain-based application, or dApp, their first instinct to be able to get access to the application should be to download Phantom,” Millman said.&nbsp;



“Very similar to how, if you’re on a laptop, and you want to go to Twitter, your first instinct is to go on a browser. That’s the long-term goal and for that goal to be realized, we do need to be able to support different networks and different blockchains that people are using, so that’s the goal we’re moving toward,” he said.



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