- Demand for Web3 Wallet SDK is a measure for growth in new projects in Q1, 2023.
- MetaMask SDK remains dominant, despite unresolved attacks and drained wallets.
- Web3 projects and games seek alternatives for wallet handling, such as account abstraction and shared key wallets.
The Web3 space is growing, based on the downloads of wallet SDK. In the first quarter of 2023, the 33% year-on-year growth was caused by an ongoing interest in NFT, with free mints and additional game collections.
Wallet SDK are a key element for Web3 developers, with multiple options to offer a seamless end user experience.
Web3 Boomed in Q1, Based on Project Data
Web3 has shown growth in developer interest, new projects, old project development and some price recovery for tokens and NFT.
Alchemy, one of the top hubs for SDK and other tools, also noted the growth trends of Web3, also in terms of wallet growth. MetaMask remains the most popular wallet, which is being integrated in various types of apps and games with Unity or Unreal engines.
Despite the popularity of MetaMask, the new growing trend is for account abstraction and wallets where several parties are holding parts of the private key. Currently, the Web3 space remains a mix of self-custody wallets and other types of tools such as wallet-as-a-service, account-based wallets, offline holdings, and multi-sig wallets.
Wallet Security Remains a Priority
Wallet security remains key for the Web3 space. One of the biggest problems remains the attempt to empty wallets through malicious smart contracts.
In April 2023, additional rumors linked MetaMask to a still unknown type of exploit that drained wallets, stealing up to 5,000 ETH. So far, the nature of the exploit is unknown, though speculations link it to the ability to guess seed phrases. The best approach for end users is to move NFT and funds, and use different wallets to store assets.
A rough estimate of the MetaMask exploit is for token and NFT losses of around $10.5M. While this exploit is relatively small compared to other crypto attacks, the ability to target wallets directly remains a concern. Tools for Web3 offers to partially hold game assets and NFT off the blockchain, or use in-game markets to avoid exposure to external smart contracts and potential attacks.
