Blocktrend's First Film Screening | WalletConnect Announces Airdrop: Become a Shareholder of "Bluetooth Technology"
Blocktrend's First Film Screening | WalletConnect Announces Airdrop: Become a Shareholder of "Bluetooth Technology"
#637
GM,
Let's start by announcing the event news: Blocktrend's first movie screening is here!
Movie Title: Vitalik: The Story of Ethereum
Date & Time: Saturday, October 19th, 7:00 PM to 9:00 PM
Location: Fablab Taipei, Taipei Maker Lab (No. 1 Yumen Street, Zhongshan District, Taipei, opposite the Yuanshan Flora Expo Pavilion)
Participants: Limited to 60 people, with priority given to members. Waitlist available once full.
This movie screening will open for registration at 12:00 PM on Tuesday, October 8th (Taipei time). Based on past experience, the event usually sells out on the first day of registration. So here's an early reminder—make sure to set your alarm. I’ll post the registration page this Thursday and update it in this article. Now, let's get to the main topic.
Last week, WalletConnect announced the release of the WCT token and initiated an airdrop, giving away free tokens to cryptocurrency users and developers who have previously used WalletConnect. The conditions for this airdrop are quite lenient—it’s almost fair to say that everyone is a winner. After all, the vast majority of mobile wallets support WalletConnect, and many web3 applications display a WalletConnect QR Code on the first screen, prompting users to scan it. If you haven’t tried it yet, you can click here to give it a go.
To date, over 600 mobile wallets and 40,000 applications support WalletConnect technology. It can be used across Solana, Cosmos, and Polkadot ecosystems. If you scanned a WalletConnect QR Code before September 2024, you might be eligible for the airdrop. Simple enough, right?
This WCT token airdrop is divided into two phases: registration and distribution. Everyone must complete registration by October 18th to have a chance to receive the WCT token airdrop in November. However, the WCT tokens received cannot be transferred immediately, meaning they can't be sold for cash right away. This is an intentional design, which has led to relatively low discussion online. In this article, I will first explain what WalletConnect does, and then discuss why it is issuing a token. Let’s start with mobile Bluetooth technology.
Mobile Bluetooth
In recent years, more and more people have been wearing wireless earphones on the street. Bluetooth is that invisible line—when your phone turns on Bluetooth and pairs with the earphones, it can transmit sound wirelessly. It’s quite amazing.
In 1994, Swedish telecommunications company Ericsson developed Bluetooth technology to replace the existing RS-232 signal transmission cable as part of their work on wireless earphones. Since then, computers and peripheral devices no longer need physical cables to communicate with each other.
Thanks to their efforts back then, the number of ports on computers and phones has gradually decreased. Because Bluetooth has become a universal standard, I can now connect my Logitech keyboard, BOSE speakers, and EPSON printer to my Apple laptop simultaneously. Bluetooth serves as the crucial bridge connecting computers and peripheral devices.
The same connection need exists in the blockchain world. People’s mobile wallets are like computers—they can send commands externally, while web3 applications are like peripheral devices that need to connect to wallets to function properly. The protagonist of this article, WalletConnect, is like the Bluetooth technology of the web3 space, designed to link wallets and applications together.
If you look at the logos of Bluetooth and WalletConnect side by side, you’ll notice they look very similar, just rotated by 90 degrees. This is no coincidence; it’s intentional:
WalletConnect is a simple way for decentralized applications and mobile wallets to communicate... We aim to make WalletConnect an open, interoperable standard that will benefit both dapp developers and users. Bluetooth was the industry’s effort to simplify short-range wireless communication, and we hope WalletConnect will similarly simplify the connection between wallets and applications.
By simply opening a mobile wallet and scanning the QR Code that appears on a web3 site, the wallet and the application can pair and start communicating. This process is something everyone is now very familiar with. However, before WalletConnect came into existence, connecting wallets and applications wasn’t as convenient.
WalletConnect
WalletConnect is a technology developed by the company of the same name in 2018. Its founder, Pedro Gomes, was originally working at an online bank in London. In 2016, after noticing the cryptocurrency bull market, he decided to resign and join the crypto startup Balance.
Balance’s main service was an asset dashboard1, similar to Nansen or DeBank2, which integrates account balances from multiple exchanges and personal wallets through APIs, automatically aggregating the data and saving users the trouble of manual bookkeeping.
While Pedro was building Balance, he noticed a group of users being left out—the mobile wallet app users.
Today, most people create cryptocurrency wallets using mobile apps. However, in 2018, mobile wallet apps were very basic, offering only transfer and receipt functions. People preferred to install the MetaMask wallet extension on their desktop browsers or use USB-connected cold wallets to link wallets with applications. As someone who had just entered the crypto world at the time, I also found it strange how simple mobile wallet apps were. Now I understand that this was because web3’s "Bluetooth" technology—WalletConnect—hadn't been invented yet.
Back then, even though both mobile wallet apps and web3 applications existed, they couldn’t communicate with each other. Some wallet apps included a built-in browser, allowing users to interact with web3 applications within the app, but most applications were desktop-only, leading to a poor mobile browsing experience. Even today, people still tend to take out their laptops, open a browser, and then connect their mobile wallet apps via WalletConnect.
At its core, what WalletConnect does is quite simple: it securely transmits encrypted information between endpoints, carrying wallet authorization messages. You might be wondering—WalletConnect has been working fine, so why did they suddenly decide to issue a token? Their answer is to move WalletConnect towards decentralization, and this can also be compared to the development history of Bluetooth.
Decentralization
If Bluetooth technology were owned by a single company and charged fees for every connection, would it still be the universal standard for wireless transmission?
Bluetooth was initially developed by Ericsson, but since 1998, the development of Bluetooth technology has been overseen by the Bluetooth Special Interest Group (SIG). In addition to Ericsson, the group includes thousands of companies, such as IBM, Intel, Nokia, and Toshiba.
Because Bluetooth technology became "owned by everyone," it was able to break through commercial barriers and become the common choice for most consumer electronics products. WalletConnect’s core contributors argue in their whitepaper that, for WalletConnect to have the same influence as Bluetooth, it must also be decentralized. This is a bold decision:
For the past six years, WalletConnect has been led by a single company and has been very successful. However, if WalletConnect doesn’t decentralize and become a technology owned by everyone, it may become a bottleneck for the ecosystem due to profit-driven motives... Centralized services that are offered for free often come with hidden costs. The most common of these is monetization through data, which sacrifices user privacy. There is also the risk of arbitrary censorship through service takedowns... Moreover, centralization poses the problem of a single point of failure, which threatens network resilience.
How to decentralize WalletConnect is technically complex, but just as people don’t need to understand how Bluetooth works to enjoy its convenience, they won't need to understand WalletConnect’s inner workings to benefit from it.
In their whitepaper, WalletConnect briefly explains that its core technology is an information transmission network made up of multiple nodes, facilitating the connection between wallets and applications. In the past, these transmission nodes were solely operated by WalletConnect, but in the future, the company will rename itself as Reown and relinquish control, allowing other companies to also become operational nodes within the WalletConnect network.
Reown’s future profit model will be similar to WordPress. While 40% of the websites on the internet are built using WordPress.org’s free open-source tools, some choose to pay for the more convenient hosting services offered by WordPress.com. In the future, Reown will pursue a similar business model to WordPress.com, transferring control of WalletConnect while positioning itself as a service company that helps enterprises use WalletConnect.
WalletConnect has also decided to issue WCT tokens and distribute them to users and developers, making everyone a “shareholder” of this technology and planting the seeds for its long-term operation. This is the most brilliant move WalletConnect has made.
A Textbook-Level Transformation
WalletConnect’s token airdrop has one fundamental difference compared to most crypto projects: the entry barrier is extremely low. People didn’t have to pay to use WalletConnect beforehand, and very few people used it daily just to “farm airdrops.” This is quite rare, and it will lead to a more even distribution of WCT tokens, rather than concentrating them in the hands of a few "airdrop hunters."
Additionally, most people are only focused on the token price when they see WalletConnect issuing tokens. However, I believe if WalletConnect executes this well, it will become a textbook-level case of decentralized transformation. This transformation has three layers of significance:
Users transforming into shareholders
Reown transforming into a paid service
WalletConnect transforming from a product to a network
In the book Read Write Own3, author Chris Dixon pointed out that the shift from user to “shareholder” is a paradigm shift brought by web3. But now that WalletConnect is becoming a living example, can you imagine what it would feel like to be a “shareholder” of Bluetooth technology?
At present, WalletConnect remains a free service, but in the future, the shareholders who hold WCT tokens will collectively decide whether to charge for the use of this technology and how those fees should be structured. Even if you aren’t a large company, as long as you’ve used WalletConnect or contributed code to its Github, you will have a say in the technology’s future.
This is a completely different innovation from the past. Does a technology need to be free for everyone to become a universal standard? Perhaps, in the future, WalletConnect will provide a new answer.
Secondly, this represents a business transformation for Reown as a company. WalletConnect was initially built with a $150,000 grant from the Ethereum Foundation in 2018, allowing them to create the prototype. Later, in 2022, they secured $12.5 million in funding, which has sustained them up to this point. However, they still don’t have a concrete business model.
Although WalletConnect holds a near-monopoly in connecting wallets and applications, they have not exploited users with this power. Instead, they are relinquishing their monopolistic advantage and shifting to a service provider model to generate revenue. From a web2 perspective, this may seem like the most foolish move, but in the web3 world, it might be the wisest decision.
Finally, it is Reown's voluntary "stepping down" that allows WalletConnect to transition from a product owned by a single company to a network owned collectively by the community. The journey towards decentralizing WalletConnect has just begun, and I can’t guarantee that it will be smooth sailing. However, the atmosphere around this airdrop feels entirely different from the past. I’m not concerned with how much the WalletConnect airdrop is worth—I’m more interested in seeing how far it can go.
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