Is MetaMask Issuing Tokens? The Growth History of Ethereum’s Top Wallet
Written by the CoinEx Institution, this series of jocular and easy to understand articles will show you everything you need to know about major cryptocurrencies, making you fully prepared before jumping into crypto!
On January 6, 2020, a video about MetaMask Swaps was posted on MetaMask’s official Twitter, followed by a teaser tweet, by Shapeshift CEO Erik Voorhees, with a logo that resembled the MetaMask brand logo. The correlation between the two events has led to speculation in the crypto community about the issuance of MetaMask. The news spread quickly in the crypto community, which pushed almost all blockchain media to publish reports on MetaMask tokens. Insightful users began to operate MetaMask-related interaction in advance to get an airdrop of MetaMask tokens.
Yet careful users found that Shapeshift had released a project called “FOX” whose logo was exactly the little fox logo in Erik Voorhees’s teaser tweet. In this regard, it was believed that his tweet probably came as a teaser ad for the company’s project, yet the resemblance between its logo and MetaMask sent out a wrong message that MetaMask might issue coins. That made for this incident.
To figure out the truth, ChainNews, a Chinese blockchain media, consulted ConsenSys, MetaMask’s parent company, and got a definite answer that MetaMask had no plan of issuing tokens.
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This incident also reveals the widespread popularity MetaMask enjoys as the top Ethereum light wallet in the global blockchain industry. Even the slightest move of MetaMask can trigger extensive discussions in the community.
History of MetaMask
MetaMask is known as the best and most useful Ethereum open-source wallet in the world, which can help investors manage their Ethereum assets easily. Without downloading a client, users only need to add MetaMask to the explorer extension. Its ease of use saves the computer memory, and at the same time it can test the functions of Ethereum smart contracts, and support the most Dapps. Its features also include compatibility with hardware wallets Ledger and Trezor as well as one-click token issuance. All of these make the most lightweight Ethereum wallet welcomed by the Ethereum community upon its release.
The parent company of MetaMask is ConsenSys, one of the “three blockchain pillars” founded by Ethereum co-founder Joseph Lubin, a champion of the cause of Ethereum’s ecosystem construction. ConsenSys has incubated more than 50 well-known projects conducive to the growth of the Ethereum ecosystem over the years since its establishment, covering core integrated components, services, developer tools, infrastructure projects, B2C Dapps, corporate solutions, and multi-platform applications. At the same time, this company has promoted Ethereum to the mainstream world through close cooperation with government organs, financial institutions, Internet giants, and other entities.
MetaMask is a key project in the infrastructure of the six business sectors of ConsenSys. There have been reports that MetaMask did not receive much support from ConsenSys in its development, as revealed by its contributors, but such notions have been denied by Daniel Finlay, the lead developer of MetaMask, who gave ConsenSys and the founder Joe Lubin credit for their great support.
Judging from the 2020 annual review report of ConsenSys, MetaMask literally remains one of its highly strategic product lines.
Despite the many episodes in the development and team running-in, MetaMask has been performing well ever since its release, which could not happen without the excellent team behind it. The MetaMask team is mostly from the Internet giant Apple. The founder Aaron Davis and the lead developer Dan Finlay are friends and used to work for the same company. Aaron Davis entered the blockchain industry through the Bitcoin community activities, and then engaged in the Ethereum ecosystem construction out of his faith in the concept of Ethereum. The MetaMask team has only 25 members, but they have an overall and clear division of labor, covering all positions from marketing, development, product, operation, and design. In addition, MetaMask has community contributors across the world to cooperate with the team to promote MetaMask to global crypto users.
On August 11, 2018, MetaMask officially launched the Chinese version and was quickly launched in 360, Baidu and other first-tier explorer application markets in China. MetaMask’s official Chinese name is “数字面具”, literally the Digital Mask. Interestingly, it is nicknamed “little fox” in the Chinese community due to the popular brand logo, a 3D fox head. It is said that the main designer had prepared various versions of a fox head, and the team eventually chose the mask-shaped 3D image as the official logo after many discussions.
The past experiences have proved that unique and distinctive brand logos enjoy a great advantage in marketing as they can always leave people a memorable impression. Witness UniSwap’s pink unicorn and MetaMask’s 3D fox head, among all the unique and novel logos. That also serves as a good example for the later blockchain projects in designing the brand logo for the benefit of brand promotion.
Indeed, an impressive brand image helps make for outstanding projects, but in the end, users stay for an “aha moment”, literally the “sweet spot” where users feel the value of the product the first time they use it. MetaMask’s “aha moment” is different from that of most Ethereum wallets on the market. It is so light and easy to use that users can access the entrance to Ethereum through an explorer, subverting the inherent impression of blockchain investors on wallets.
However, the mobile Internet market represents the ultimate trend of the times. To meet the needs of different regional markets, MetaMask eventually launched the mobile end in its progress, which serves as a catalyst for its expansion in the Chinese market where the mobile Internet is highly developed.
With such evident advantages as the unique and distinctive brand image and outstanding product features, MetaMask only needs one or two opportunities to stand out. Actually, it has seized two golden opportunities arising from market conditions during the past development.
MetaMask’s First Boom
As we all know, 2019 is a cold winter for the cryptocurrency industry when the continued decline in token prices has thrown the crypto market into long-time sluggishness. Fortunately, the next year witnessed significant progress in the development of the Ethereum ecosystem. The DeFi, the network, Dapps, and the developer ecosystem have all secured good results. The Ethereum network has more than 520 new Dapps, over 20 million new accounts, and 400,000+ new active addresses. At the same time, concept projects such as DeFi, NFT, and DAO that were to go viral in 2020 have also achieved explosive growth in the amount of locked assets in 2019.
The prosperity of the Ethereum ecosystem has promoted a surge in demand for its infrastructure, and innovative products such as MetaMask have become the first smash hit. With the development of the Ethereum ecosystem, the launch of the privacy model and the improvement of functions, a growing number of people came to notice MetaMask, creating excellent conditions for this project to break through new milestones. In 2019, MetaMask revealed in its update on project dynamics that its user population had exceeded 1.3 million.
That was the first boom of MetaMask.
MetaMask’s Second Boom
Although all attempts to promote DeFi turned out to be in vain in 2019, the construction of the DeFi ecosystem still paved the way for its rise in 2020. In June 2020, the COMP token of the DeFi lending project Compound skyrocketed, with its price rising ten-fold overnight. The era of DeFi has officially kicked off. From June 2020 to October the same year, the DeFi field has flourished and stayed in the limelight.
With the popularity of DeFi, the lock-up amount in the DeFi agreement has increased from USD 700 million at the beginning of 2020 to USD 15 billion in December. The crypto market has witnessed the birth of countless outstanding projects overnight: decentralized transaction protocols, decentralized lending, decentralized insurance… Driven by the high profits within a short time, global crypto users have poured into the Ethereum network for yield farming, staking, and transactions, further stimulating the user activity of the Ethereum network throughout last summer. On September 17, 2020, the daily trading volume of Ethereum exceeded 1.4 million, hitting a record high.
Numerous new DeFi projects and DeFi digital assets on Ethereum herald a surging demand for wallets. As the leader in Ethereum wallets, MetaMask has been favored by vast users.
According to NewsBTC, there is a positive correlation between the growth of MetaMask monthly active users and the growth of total value locked in DeFi, as suggested by the comparison of the two curves.
Obviously, the prosperity of the DeFi market is just one of the reasons behind the growth of MetaMask users. According to media analysis, the second boom of MetaMask is closely related to the hit UniSwap. Last summer, the decentralized trading protocol represented by UniSwap appeared on the scene. With a daily turnover of more than 1 billion US dollars, UniSwap surpassed the exchange giant Coinbase Pro and later the first-tier trading platform Binance. Back in 2019, the DEX trading volume accounted for a mere 1% of the global cryptocurrency trading market, and the remaining 99% was occupied by major centralized exchanges. Yet the arrival of the DeFi frenzy has completely changed the situation and pushed DEX to success in 2020. According to Dune Analytics data, the monthly trading volume of decentralized exchanges (DEX) in September 2020 has soared to more than 10 billion US dollars.
As the largest trading platform in the DEX segment, UniSwap has more than 140,000 users in August last year, occupying 46% of the market share of decentralized exchanges. Users who have participated in DeFi projects and DEX transactions know that wallets are an indispensable tool for linking DEX and DeFi projects to facilitate investors in asset management, storage, and transfer. Due to its simplicity, lightness and privacy, MetaMask has been favored by the most investors among all wallets that support Wallet Connect. Almost all investors who engage in yield farming on DEX on the Ethereum chain take MetaMask as the first choice.
Some media even directly attribute the growth of MetaMask to the popularity of decentralized protocols such as UniSwap. In September 2020 when UniSwap announced the issuance of coins and airdrops to all users who have used UniSwap before September 1, the number of MetaMask’s monthly active users has reached a new milestone. On October 6, 2020, MetaMask announced on its official Medium account that its web-based and mobile ends had received more than 1 million monthly active users, compared with 264,000 users a year ago, a 400%+ increase.
In this article, the team also recognized the huge role that the development of the Ethereum DeFi ecosystem had played in MetaMask’s user growth. With the DeFi boom receding over time, the MetaMask era has just begun.
At this point, MetaMask has embraced its second prosperity and risen to the throne.
Postscript
In December 2020, ConsenSys announced a new MetaMask product for institutional users, as a supplement to its past services mainly for consumers. MetaMask institutional edition will effectively expand business resources such as trading companies and cryptocurrency custodians. Researchers believe this marks another attempt by ConsenSys, after MetaMask Swap, to commercialize the traffic through partnerships with institutional users to provide financial services. Only in this way can MetaMask secure sustainable, further development.
In any case, if competitors fail to launch more surprising products in the short term, the segment of Ethereum light wallets will remain in the grasp of MetaMask.
References:
How Uniswap & DeFi Drove Ethereum Wallet MetaMask To 1M Users — Tony Spilotro
Top Ethereum Wallet MetaMask Hits Milestone Despite DeFi Slowdown — Nick Chong
Analysis of the Development of the Ethereum Ecosystem in 2019 — Blue Fox Notes
ConsenSys: One of the Most Important Companies in the Encryption Industry — Frog AOA
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