The Importance of Composable Wallets

I once explained the product composability of centralized applications (dApps) in the past. Of course, I used a very simple stacked diagram: In fact, there are two levels that I omitted, namely the wallet and SDK; Add a layer about "chains": In this article I'm going to talk about why this extra complexity leads to a shift in perspective: Composable wallets will have an increasingly important impact on both users and developers . Generally speaking, when the "last mile" of product development is reached, that is, when the development team decides to connect as many wallets as possible, people will think about wallets (assuming that the team is responsible for both products Smart contract backend, also responsible for the frontend). This is not a big deal at the moment, as most dApps are simple in terms of user interaction (i.e. authorization + deposit, auction/buy, and swap). There isn't much to manage or represent in the before/after of the interaction. But our ecology will become more complicated, so what should we do then? For the foreseeable future, we will all be managing our own digital identities in the form of tokens, such as skills, credit scores, social circles, and so on. This will generate an additional interaction step before accessing the standard protocols we use today, to manage more complex network and user relationships, and the corresponding market. Thinking about this prospect, we ask ourselves: Is it reasonable for each product to manage a specific prospect itself? The way to do it in the Web 2.0 era is to create another app marketplace/website, but I don't think I'd like having another website to keep track of how I manage my identity and the networks I use. In my opinion, such private things should be done at the wallet layer, because in this environment, personal autonomy and privacy come first. While I don't mind jumping to different websites to use different protocols, I also don't want to use multiple wallets to manage different parts of my on-chain interactions. That's stupid, and every extra is a security risk. But if I only use one type of wallet, then I'm binding myself to the inherent risk of the development team behind that wallet - not to mention there will always be new features they haven't developed yet. Remember, we're already in a rapidly evolving world where no team can be the master of everything. The Ethereum official website has set the EIP-2982 status of Serenity Phase 0 to "Complete": On September 20th, the Ethereum official website has set the EIP-2982 status of Serenity Phase 0 (Serenity Phases 0) to "Final" . It is reported that EIP-2982 was created by Vitalik Buterin, the co-founder of Ethereum on September 15, 2020. The completion mark of "phase 0" means that the beacon chain has been launched and merged, and the consensus mechanism of Ethereum proof of work has been switched to proof of equity. consensus mechanism. It is worth mentioning that the Ethereum merger was successfully completed on September 15, 2022, exactly two years after Vitalik Buterin created EIP-2982. [2022/9/21 7:09:22] This is why we need wallet composability. Although I want to jump right in, I haven't covered what parts a wallet is made of. We already have the term "currency building blocks" when talking about DeFi and many Ethereum dApps; hence I'm going to call the wallet's composability modules "access legos". Each of the four levels should allow users to choose products flexibly, and each level should provide customized building blocks by product providers. There's a lot to dig into here, so let's take a quick look at the history of cryptocurrency wallets to better understand these building blocks and how the advanced wallet services we use today came to be. The first Ethereum wallet was inspired by the Bitcoin Qt wallet, made by the Mist team. Image source Mist wallet looks very similar to Qt, it is a software that needs to be downloaded, and then you can export transaction data, and also support block synchronization/block browsing: Wyoming State Bank commissioner serves as CEO of Fortress Trust Company: Golden Finance Report, Fortress Blockchain Technologies revealed today that State Bank Commissioner Albert Forkner of the Wyoming Division of Banking has joined Fortress Trust Company as Chief Executive Officer (CEO). He leads the governing entity powering the Fortress Web3 B2B infrastructure ecosystem. Fortress provides a set of API-driven B2B financial, regulatory and technology solutions for NFT and encryption technology innovators. These pioneers are changing the world thanks to the Web3 initiative, and they desperately need a trusted foundation on which to build their businesses. Forkner has more than 20 years of banking regulatory experience and was heavily involved in the Special Purpose Depository Institution (SPDI) Bank Charter, the first such framework for digital assets. (cryptonews) [2022/6/8 4:09:42] This wallet actually wants to pack everything that an Ethereum node can do into a piece of software - then it needs to install a lot of dependencies, and the overall user experience not good. By 2016, MetaMask emerged, one of the first browser-based wallets. Since then, dApp can be decoupled from the wallet, and only needs to be embedded in the connection method of the wallet. This becomes very important as the ecosystem grows, as it was (and still is) difficult for a single team to track the progress of all EIPs and tokens/protocols developed. I would like to point out that while this increases the composability of dApp products, this is not yet the smart contract integration within the wallet referred to in the "Channel Building Block Diagram" above. This part didn't change until new integration methods such as WalletConnect appeared. Wallet Connection Embedded Example This way, some of the responsibility and burden of the wallet is removed, and its focus now becomes transaction building, signing, and maintaining the connection to the blockchain. I don't want to get into the details, but transaction construction means that some transaction parameters are received from the dApp, and other parameters are kept completely under the control of the wallet. This brings us to the RPC calls available to wallets (also called "providers"), first defined by EIP-1193. dApp can send some parameters such as target address, data, gas limit/price, and value to the wallet, but cannot control the chain ID, sender address, nonce and other parameters related to wallet security. Move to Earn applied STEPN to cast 5,085 pairs of shoes in the past 24 hours: Golden Finance News, according to data on the Dune chain, Move to Earn applied STEPN to cast 5,085 pairs of shoes in the past 24 hours, and 34,150 pairs of shoes were newly cast in the past 7 days; Daily active-zce users 101777. Previously, according to OpenSea official news, the Move to Earn application STEPN has been launched on the NFT market OpenSea, and is denominated in SOL. [2022/4/28 2:37:30] With this new type of wallet, we have two more complicated user experiences: remembering the addresses of other users/friends is difficult, unsafe, and prone to The bytecode that comes with human error transactions is unreadable unless you are very familiar with function selectors and data/parameter hashes. If you don't have an ABI for your contract, you're in for a treat. To address the first point, ENS was launched in 2016/2017 along with EIP-137, which became our first social building block. Now, everyone can use a website domain name to represent their Ethereum address (such as vitalik.eth), and use it in messages/transfers to avoid entering long addresses. This is only part of the social smart contract layer; the rest takes more effort to decouple/enable composability. Regarding the second point, Parity has created a "method registry" that is widely used by users to give human-readable information in the signature interface of the wallet. EIP-712 has played an important role here, although it has only recently gained more attention. However, even with these settings, it is difficult to guarantee that your browser has not been hacked or tricked into displaying false transactions/information. This is one of the biggest problems with using a hot wallet (i.e. a wallet service that is always connected to the internet and is not isolated from the rest of your computer environment). A common solution is a hardware wallet, pioneered by Ledger, which started in 2014. MetaMask added hardware wallet support on the first day of 2018, officially decoupling the security layer and the transaction layer/connection layer. We will come back to this later, because Ledger is great as a cold storage wallet, but some new products have also improved greatly. Robinhood holds nearly 1/3 of DOGE’s circulating supply: Jinse Finance reported that Robinhood announced that the share of Dogecoin stored accounted for nearly 32% of the total circulating supply. The amount is a staggering 42,436,664,891 DOGE worth $5,398,537,887. The platform holds the funds on behalf of its clients, the tweet said. Robinhood stores Dogecoin in two wallets using eight addresses. Petitions to request DOGE tips on Twitter have so far generated little interest. As previously reported, bitcoin advocate Twitter CEO Jack Dorsey enabled bitcoin tips last September. （u.today）[2022/2/27 10:19:00] Right above is a Ledger wallet At the same time, we see that many complex agreements began to gain popularity in the DeFi world in the summer of 2020 (Most of them were developed over 2-3 years). This gives us more and more tokens, and it becomes more and more important to learn how to manage security. To help everyone keep up with the progress of the circle, a new RPC endpoint has been created that allows dApps to add varieties to the list of tokens tracked by their wallets. More tools for managing assets were created, such as Argent vaults and Gnosis multi-sig safes (I also think these two products are related to the social layer, because they have multi-user mechanisms and DAO mechanisms). People also created a "permissioned connection" standard (EIP-2255) for dApp data sharing to prevent malicious access to wallets. Asset management/asset aggregators, analyzers, are also decoupled from the wallet because of Zerion and Zapper (we will return to explain these two products in the next chapter). Mobile wallets have also seen growth since 2019. Rainbow wallet is one of the best examples, their user experience is very well designed. But when it comes to seamless integration, they're just getting started. Most other mobile wallets (such as MetaMask Mobile and Coinbase Wallet) have tried and developed a dApp browser within the app, relying on deeplinks rather than direct integration. These deeplinks cannot provide a good user experience, but there are so many products developed on Ethereum that the wallet team cannot design a unified interface that can interact with all products. Assuming that each wallet application team optimizes for one application scenario (messaging, NFT/marketplace, DeFi, etc.) - then, my security risk is proportional to the number of wallets I use. Maybe they're all minimal because the security modules are completely decoupled -- but because the market has become fragmented, developers have to prioritize access to different systems. The Rainbow Wallet team originally wanted to be a wallet aggregator/manager (based on an early GitHub repository they started building in 2019), so I think they've thought about it. In other words, we can see that the interface of the smart contract is already semi-decoupled, but this integration cannot be combined freely, because the wallet team is the bottleneck. In other words, all dApps can be pushed to a wallet for use, but a wallet does not guarantee that all dApps support them. For the first time, Chinese artwork NFT was transferred from Wenchang chain to Ethereum through Cosmos-based IRISnet: On November 27th, according to the official announcement issued by Cosmos, the company's software development kit was used for the first time between four blockchain networks. NFT transfer, a series of Chinese artwork NFT has recently been successfully transferred from the BSN OPB (Open Permissioned Blockchain) Wenchang Chain to Ethereum through the Cosmos TIBC (Terser Inter-Blockchain Communication) protocol. First, NFTs are minted on the Wenchang Chain, and then sent to IRITA Hub and IRIS Hub, two Cosmos-based cross-platform interoperability protocols operated by IRISNet. All NFTs in the experiment are now sold on OpenSea. With the support of the Interchain Foundation (ICF), the governing body of the Cosmos network, the TIBC protocol has been developed as a subset of the IBC protocol, with some modifications to simplify inter-chain connections and extend inter-chain functionality to enable digital data with complex real data Assets can be transferred between blockchains without hassle and without trust. In addition, users using this advanced inter-chain NFT technology can meet their core business needs, use blockchain technology to support strong quality and compliance standards, and support reliable information exchange in cross-border business. [2021/11/27 12:35:17] Now, we have more or less understood all the layers of a wallet, and now let’s go back to the channel building blocks.

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