WalletConnect solves the major point of managing multiple wallets for different decentralized applications (Dapps) and DeFi protocols. Instead of using a separate wallet for each platform, WalletConnect allows users to interact with a wide range of Dapps from a single wallet, streamlining the user experience. It connects wallets to various blockchain-based platforms through a secure, decentralized protocol, making managing assets across different DeFi services easier without needing multiple wallets.

What is Wallet Connect Network?

The WalletConnect Network is a decentralized infrastructure for developers and users that facilitates seamless interactions between wallets and applications in the Web3 ecosystem. It securely bridges the gap between desktop and mobile users by scanning a QR code. The main focus of WalletConnect is to solve onchain UX ecosystems. As a chain-agnostic infrastructure, it operates across ecosystems, from EVM and its L2s to Solana, Cosmos, Polkadot, Bitcoin, and more. To connect the wallet, it utilized a shared key between protocol and user wallet to establish encrypted connections, allowing users to enjoy a private and secure connection when interacting with Dapps and protocol.

Wallet Connect Background and History

WalletConnect was founded in 2018 in the Cayman Islands to create a protocol enabling seamless connections between wallets and decentralized applications (Dapps). By 2024, WalletConnect powered over 150 million connections for 23 million users across 600 wallets and 40,000 projects, spanning multiple blockchain networks. In 2022, the WalletConnect raised $25 million in funding from notable investors like Coinbase Ventures and Polygon Ventures. On September 17, 2024, WalletConnect Inc. rebranded itself as Reown, signaling its evolution and expansion within the Web3 ecosystem. Its initial team included Pedro Gomes as Foundation Director and Yessin as CFO.

Features of Wallet Connect

WalletConnect offers several key features to improve Web3 wallet and Dapp interactions:

1. Multi-chain support: Connect to any blockchain, enabling interactions across various ecosystems.
2. Universal protocol: Supports over 600 wallets and 40,000 Dapps, offering seamless interoperability.
3. Secure connections: Uses end-to-end encryption to ensure secure and private transactions between wallets and Dapps.
4. Cross-platform access: Allows users to connect via mobile or desktop without needing browser extensions.
5. Push Notifications: Offers alerts for transaction confirmations, price changes, etc.
6. Multi-chain detection: It automatically detects chains; no need to modify.
7. Free: WalletConnect requires no fee to connect with any networks.

Network Participants

The network has various participants, and each plays a critical role in maintaining its functionality and security. These participants are vital for ensuring smooth operations, secure interactions, and efficient connections between wallets and decentralized applications (Dapps).

Service Node Operators

Service node operators manage the service nodes and are responsible for ensuring uptime and performance, which is crucial for network scalability and reliability. To participate, operators must stake WCT tokens, and for that, they will earn staking rewards and performance-based incentives based on uptime and latency metrics.

Gateway Node Operators

These operators must manage gateway nodes, which facilitate encrypted communications and data routing between wallets and applications. Currently, these nodes are operated by Reown, but it is expected that the WalletConnect Foundation will steward further decentralization of the operation of Gateway Nodes.

Wallets

Wallets enable end users to connect securely with networks and applications, manage assets, and interact with apps. Wallets integrate with the WalletConnect Network using Reown’s WalletKit SDK, offering a seamless experience. By staking WCT tokens, wallets can participate in governance and earn rewards through staking and performance incentives.

Apps

Apps are Dapps or Defi protocols in Web3 that provide products and services to users. Apps are critical in driving traffic to the Network via direct integration or any of the available SDKs.

SDKs

SDKs ensure secure and efficient interactions between apps and the network. SDKs serve as application intermediaries, simplifying their connection to the WalletConnect Network. To recognize their role, participating SDKs receive a one-time allocation of WCT tokens, allowing them to engage in the network’s governance.

End Users

These are users who uses WalletConnect network to interact with services. Users play a critical role in driving the Network’s adoption and usage. End users can participate in the network’s governance through the WCT token.

Technical Council

The council is responsible for infrastructure and core development, and it is elected by the foundation and the community through governance. The Technical Council is expected to contribute to the network during the transition phases of the Network’s governance, gradually taking over technical responsibilities and facilitating a smooth shift towards a fully decentralized governance model.

How to use a WalletConnect?

Users can connect with WalletConnect by scanning an encrypted QR code with their supporting wallet. Therefore, to connect Dapp with a wallet, both must use the WalletConnect interface.

• Ensure that wallet supports WalletConnect, such as MetaMask or Trust Wallet.
• On the Dapp, select “Connect Wallet” and choose WalletConnect as the connection method.
• If on desktop, then scan the QR code with mobile wallet. If on mobile, simply tap the WalletConnect option and follow the process
• Confirm the connection in your wallet, and you’re ready to interact with the Dapp.
• This whole process does not require any gas fees.

Connecting Uniswap with WalletConnect

What is the Wallet Connect Token?

Wallet Connect token (WCT) is a native token of platform powers the onchain UX ecosystem, acting as both a reward and governance mechanism within the ecosystem. On the platform, the WCT token has four functionality:

• Fees: At first, the network will not charge fees, but token holders will be able to vote on fees for network services such as relay usage and other future services.
• Rewards: WCT tokens are distributed as rewards to incentivize participation and contribute to network security and efficiency.
• Staking: Participants can stake WCT tokens to earn rewards and participate in governance.
• Governance: Through decentralized governance, WCT holders can vote on proposals and changes, giving the community control over the network’s development.

At the time, tokenomics does not include token inflation; the main focus is utilizing existing allocation. However, WalletConnect has given full flexibility to the governance structure and community to implement inflation mechanisms in the future, but not within 3 to 4 years. The total allocation is $1 billion, designed to support the Network’s growth. These allocations include:

• Core Development: 7% For further development of the protocol and related modules
• Rewards: 17.5% For staking and performance rewards
• Airdrops: 18.5% For seasonal airdrops to users, apps, wallets, nodes, etc.
• Team: 18.5% For team members of Reown and WalletConnect.
• Previous Backers: 11.5% for those who provided resources and support to the early-stage network.
• WalletConnect Foundation: 27% for partnerships, grants, ecosystem development, and operations.

Wallet Connect Governance

WalletConnect’s governance model is centered on community participation and promotes decentralization and transparency. It includes three key roles: the foundation, which oversees network growth and direction; the council, which consists of groups responsible for functions like technology, infrastructure, and partnerships; and the Community, which actively participates in decision-making through voting and governance.

• The Foundation guides the network’s development, promotes its adoption, and drives growth. Key responsibilities include managing grants for stakeholders and supporting application developers, SDK, and wallet development teams.
• The Councils are expected to handle specific areas, such as the Technical Council, which oversees technology and infrastructure, and the Partnerships Council, which focuses on partnerships and network growth.
• The WalletConnect Network aims to transition to a fully decentralized governance model managed by community governance through WCT tokenholders. This decentralization will be implemented through approved proposals, with token holders having a direct say in network governance with five transition phases.

Wallet Connect Roadmap

WalletConnect has planned everything to upgrade the network, and stakeholders are responsible for enhancing decentralization, functionality, and innovation. The roadmap, proposed by core contributors, includes several ideas aimed at improving the network to meet the growing demands of the Web3 ecosystem. These upgrades focus on expanding decentralization, refining technical infrastructure, and introducing new services that cater to the evolving needs of users. Some of the future upgrades include:

Conclusion

WalletConnect empowers developers to offer users more flexibility in connecting to decentralized applications (Dapps). By supporting a variety of wallets and enabling seamless, secure connections, WalletConnect enhances the user experience. WalletConnect can be an option for users who use multiple wallets and want to explore a Dapp before connecting their primary wallet. Using WalletConnect, users can choose a secondary wallet for initial interactions and then switch to their main wallet when they feel confident.