After discussing with many Crypto builders, I wrote this article to share with you about Wallet's service framework .

Recently, the big news in the payment field is that PayPal started to support accounts to send and receive cryptocurrencies with outside, maybe Meta Pay and other large payment companies will enter this track later. If we look at the history of PayPal, AliPay and WechatPay, Meta Pay, we will know that these giants have developed a huge ecology using Wallet as a service. With the entry of the giants, the crypto payment field will become more and more intense, mayby it leaving a window of 3-5 years for crypto developers.

Now most of the Wallet services in Crypto domain are still focused on decentralized wallet service, if users expect to get cryptocurrency services and want to control over wallet based on ease of use and privacy. Then we can take a peek at the future of wallet services between the history of Web2 payments and the future needs of people, then abstract the commonalities from them. maybe crypto startups can build a new group of wallet middleware products to fight against the giant companies.

Now there are many wallet service providers in Crypto industry, represented by MetaMask, which basically serves Crypto users and implements decentralized authority management, another part is payment service represented by Binance Pay, and there are Web2 companies that are entering Crypto industry, such as PayPal. Native crypto startups are also expanding the boundaries of wallet services, not limited to decentralization, for example, Web3Auth is using the SDK of traditional social applications to create a more convenient Wallet authentication service, and there are some Wallet Service specifically for DAO (such as managing the vault, according to KPI to manage payroll, etc.)

In this article, I will abstract from the concrete details, abstract the wallet service, layer and modularize the Wallet service, and initially explore the composition of Wallet Structure. I hope that startups in the Crypto space will implement some of the businesses in the diagram below, meet the real needs of users, and generate strong cash flow from these services. I predict that in 10 years there will be a company that implements all of the businesses in this framework. I'm just not sure if it will be from a team in Crypto or from a traditional Web2 giant, but I hope it will be from the Crypto Native world.

Combining the current situation and the vision of the future, I would like to describe the potential needs and reasons from the user's viewpoints.

1. Free Trade (cross chain & DEX)

What users want is that any digital asset, no matter which chain it is on, should be freely exchangeable with other crypto assets, which will use DEX, Cross chain or CEX service.

2. Permission Control (HD Wallet, Social recovery, Gmail/Facebook/Twitter Login)

Decentralized wallet-Cold wallet can achieve completely decentralized management, and the individual has independent control power, but the problem is also obvious. Perhaps the SBT/DID function mentioned by Vitalik can effectively solve this problem. Another is to use existing Web2 services to verify and manage users' personal wallets, there are Web3Auth and other teams starting up in this field, and it is expected that a large number of Web3 applications will adopt this approach to guide users into the Crypto world in the future.

3. Multichain Payment (Abstraction and integration of multi-chain accounts)

In Web2 services, the merchants will interface with many payment companies, so some middleware App have developed payment integration services for merchants. When customers scan the payment QR code issued by the merchant, they can pay the money, no matter which payment institution's wallet they use, because the merchant's payment QR code has access to several payment institutions and then automatically identifies which payment institution's wallet the user is using.

In the Crypto field, almost every user has multiple Tokens of public chains, and every time when users making a payment, the recipient and the sender have to choose the corresponding wallet in order to do so. It is obvious that this is very troublesome and not conducive to the promotion of cryptocurrency. It should be that the merchant only displays a QR code, and no matter which token the User chooses to pay for the transaction, the merchant's collection system can automatically recognize the customer's token and make a transaction. This is a very mature service in traditional payment companies.

4. Fraud Identification

Fraud identification is a well-established service in the traditional payments space, but in the cryptocurrency space, it is challenging to identify wallets for potential fraud because of the ease of creating individual wallets. However, due to the transparency of transactions, wallet-to-wallet connections are easier to identify, so if a wallet address is associated with a criminal account, it can be located, but requires rigorous big data analysis, which some startups are already trying to do.

5. Accounting Analysis

As users' transactions increase, they will gradually need analysis service, for example, users want to know the overview of their crypto asset transactions, which proxy transactions are the most and where they are going? What goods or services have been purchased? especially when users can purchase goods in the future.

6. DAO Management (Regular payments for payroll)

DAO is comming, there are startup teams developing services specifically for DAOs, such as obtaining proof of DAO members' workload and then paying DAO members according to their performance, or even providing tax services for DAO members. In the traditional world, many large banks like to contract with companies for payroll management services. A company with tens of thousands of employees having all their salaries paid in the same bank means that the bank has a stable pool of short-term loans. If the wallet service can access DAO's PoW system and then meet their payroll needs, the wallet can collect fees and sink a large number of quality users, which can help the wallet's profitability and get stable cash flow.

7. Startups Funds Management

Both DAO and crypto startups manage a large amount of funds, which are generally managed with multiple signatures or placed in the founder's cold wallet, but this management method cannot balance flexibility, security and practicality. If Wallet service can form a complete funds management, payroll, investment operation, and social recovery solution, it will be very popular among small businesses.

8. Fiat Currency Exchange

With the clarity and implementation of national regulatory policies, the demand for Fiat Currency Exchange will be further released, and if this channel is opened, it may be the Iphone moment of wallet service, and now all giant companies are developing in this direction, but Startups has no chance at all? If we do not try who knows it?

9. Social Lucky bonus and tipping features

Wechat payment utilize this feature to rapidly expand the market share, and Alipay was unable to stop its crazy expansion pace in that period of time. We have developed a Socia Lucky Bonus feature on the public chain, a completely decentralized service based on smart contracts, which is very popular in the community.

10. Other services (Tax Services, B2B Payment Etc)

If you are familiar with the business of traditional payment companies, you must know how much money they make in B2C and B2B services, which will also be generated in the cryptocurrency field in the future.