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The Future of Global and Embedded Wallets
By
Itai Turbahn
December 8, 2023
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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