Phantom, a crypto wallet heavily used in the Solana ecosystem, has seen its active user base more than triple over the past year, CEO and co-founder Brandon Millman shared exclusively with TechCrunch.
In January 2024, Phantom hit 3.2 million monthly active users (MAUs), up 220% from 1 million a year ago, and recorded 941,000 installs, up 463.5% from 167,000 installs in the same period, Millman said . “These numbers are essentially our peak,” and surpassed usage and metrics from the previous cryptocurrency market in 2021 and early 2022, he added.
“THE Jito and Jupiter throws wind it was a huge turning point for the ecosystem,” Millman said. “Solana has reached escape velocity and has proven to be a first-rate ecosystem. It’s the platform that attracts some of the best manufacturers in the world.”
Decentralized finance (DeFi) Jito Network and decentralized aggregator Jupiter airdropped in late 2023 and early 2024, respectively, providing users of their projects with rewards or tokens, essentially a “thank you” for using their service.
When it rains, it pours
These airdrops, combined with the recent Solana memecoin craze, could be the reason why the ecosystem experienced a surge of old and new users.
“It’s a lot of DeFi activity, but what it amounts to is that crypto wallets are becoming the new entry point to crypto,” Millman muses. When a user first gets into crypto, the standard method is to go through centralized crypto exchanges like Coinbase, which results in “word of mouth,” but now the world has changed, he believes, “more and more people are downloading a crypto wallet.” to get started.
This entry point of wallets and on-chain applications is becoming the “new thing that people are trying to access when they want to use crypto,” Millman said.
In addition to being a place to own and exchange their cryptocurrencies, Phantom also aims to be a “secure access” for web3 experiences, Millman noted. During the Jupiter airdrop, by sharing links to Phantom’s website, it helped drive 1.1 million visits to the Jupiter claim website in an effort to prevent people from being tricked by malicious links, he added.
Growth vs. Revenue
Phantom launched in 2021 as a Solana-only crypto wallet, but has since expanded to provide multi-chain support for Ethereum, Polygon, and Bitcoin as well. Now, the company is aiming to grow its user base as it seeks to become the top destination for people new to crypto and wallets.
“Right now, we are in a focused stage of development. We are not extremely focused on monetization, but prefer to feed it back to user growth. The more users sign up, the more developers are attracted to growing the ecosystem, and the more apps and users we have. It’s like a flywheel and we’re trying to grow as fast as possible,” Millman said.
Phantom makes money the same way most other wallets do: By providing in-app convenience features for exchanging cryptocurrencies and charging a small fee for them. The company, which is backed by investors including Paradigm, Andreessen Horowitz, Jump Capital and Solana, also has a “strong balance sheet,” Millman said, so it doesn’t need to focus too much on revenue right now.
“We believe the future of wallets is multi-chain, just as crypto exchanges have evolved. Coinbase started as a Bitcoin-only exchange, then added support for Ethereum, and one thing led to another,” he said. “No one can understand a world where exchanges have only one currency. Wallets will follow the same path.”
While it is still too early to expect the masses to guard their crypto assets themselves, the increase in the use of crypto wallets points to further growth in the space. In the past, on-chain apps were too expensive or complicated to use, but these airdrops and the resulting influx of users show the advantage of composability, Millman added.
Crypto exchanges like Coinbase run a completely closed system, but on-chain systems like Solana are open to developers to develop. So by trading or staking assets on exchanges, people could potentially miss out on rewards like airdrops, Millman noted.
And when you consider that crypto wallets allow users to exchange cryptocurrencies, they become more attractive than exchanges because they also provide access to on-chain privileges. “DeFi apps are now mobilizing usage with airdrops and the only way to do that is to download a wallet […] User intent and types of on-chain applications have grown and diversified, making wallets an entry point,” he said.
Millman expects crypto wallet adoption to continue to grow as more providers and the ecosystem bring new features and explore new avenues. “There are still a lot of sharp edges and foreign ideas, that’s for sure. Recovery passphrases are the de-facto key management for wallets. But these are areas we’re going to be innovating on this year, and we’re excited to show the next evolution of what that will look like.”
In the future, he expects crypto wallets to help people do more than buy, hold and sell crypto. “It’s a window into a much richer world of interoperability.”
