👀 WalletConnect Project Analysis

I. Project Background and Core Positioning

WalletConnect is an open-source protocol designed to connect blockchain wallets and decentralized applications (DApps) in a decentralized and secure manner. It was created to address two major pain points faced by crypto users when using DApps: the risk of private key exposure and cumbersome cross-platform operations. By scanning a QR code or clicking a link, users can interact with the wallet and DApp without exporting private keys, greatly enhancing the security and usability of Web3 applications. WalletConnect is celebrating its 7th anniversary!

II. Technical Architecture and Security Mechanisms

  1. Connection Process

    • QR Code Scanning: The DApp generates a QR code containing the session request, allowing users to establish a connection by scanning with the wallet's scanner (supports multi-chain address switching).

    • End-to-End Encryption: Uses the Diffie-Hellman key exchange protocol to generate symmetric keys, combined with AES algorithm to encrypt communication, ensuring data confidentiality during transmission.

    • Stateless Connection: Sensitive data is only stored on the client side, and the server does not store session information, reducing attack risks.

  2. Security Features

    • Private Key Isolation: User private keys are always kept in the local wallet, with the DApp only sending transaction requests through an encrypted channel, requiring manual signature confirmation by the user.

    • Multi-Factor Authentication: Some wallets integrate biometric or password verification, enhancing transaction security.

    • Phishing Prevention Mechanism: Reduces the risk of users mistakenly connecting to malicious applications through a list of officially certified wallets and DApps.

III. Market Applications and Ecological Support

  1. Mainstream Wallet Compatibility
    Supports over 70 wallets including MetaMask, TokenPocket, Trust Wallet, covering both web and mobile platforms, forming a wide user entry.

  2. DApp Application Scenarios

    • DeFi: Connecting decentralized exchanges (like Uniswap), lending protocols (like Aave), enabling seamless trading and asset management.

    • GameFi: Supporting asset interactions within blockchain games, such as NFT trading and in-game item transfers.

    • Cross-Chain Tools: Integrating with protocols like LayerZero and Poly Network to achieve multi-chain asset cross-chain management.

  3. Developer Support
    Providing tools like Web3Modal SDK, Sign API, etc., to simplify DApp integration processes, supporting technology stacks like React, SvelteKit, etc., lowering development barriers.

IV. Risks and Challenges

  1. Fake Application Attacks
    There have been instances of fake WalletConnect applications stealing user assets on Google Play, necessitating enhanced user security education and application store review mechanisms.

  2. Reliance on Wallet Security
    The security of the protocol itself relies on the protective capabilities of the user’s wallet; if there are vulnerabilities (such as private key leakage), it may affect overall security.

V. Future Development Directions

  1. Decentralized Network Upgrade
    Gradually introducing more node operators, transitioning towards a fully decentralized network to enhance community governance and resistance to censorship.

  2. Web3 Messaging Layer Expansion
    Launched the Web3inbox application to explore decentralized social and messaging scenarios, supporting cross-chain message interoperability and providing new interaction models for DApp developers.

  3. Token Economic Incentives
    WCT tokens are used to incentivize node operators and developers, with distribution mechanisms including foundation reserves, airdrops, team rewards, etc., to promote sustainable ecological development.

VI. Token Model

  1. Token Distribution

    • Total Supply: 1 billion WCT tokens.

    • Distribution Ratio:

      • WalletConnect Foundation: 27%

      • Airdrop: 18.5% (First quarter airdrop of 185 million tokens, rewarding end users, wallets, applications, nodes, and communities)

      • Team: 18.5%

      • Incentive Program: 17.5% (used to incentivize node operators, wallets, and users to promote ecological development)

      • Early Supporters: 11.5%

      • Core Development Team: 7%

    • Unlocking Mechanism: Tokens for the team, core developers, and early supporters will be unlocked over four years, with the first year being non-transferable (cliff period), and then 25% unlocked each subsequent year.

  2. Token Utility

    • Governance: WCT holders can participate in network governance and vote on proposals and changes.

    • Staking: Users can stake WCT to earn rewards; the longer the staking period, the greater the rewards.

    • Rewards: Distributed as incentives to maintain network security and efficiency.

    • Fee Structure: Future service fees may be introduced and decided by the community through voting.

👉 The current off-market price is around 0.39, for reference only.

Based on the current price, returns are indeed low, but recently BNB has multiple benefits, and WCT had previously participated in the BG new token listing, which was delayed for a long time, unexpectedly getting listed on Binance.

Registering on Binance can use the invitation code: DBQAREOK

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