WalletConnect (WCT)

WalletConnect (WCT) is a pioneering protocol established in 2018 to bridge the gap between cryptocurrency wallets and decentralized applications (dApps). By facilitating seamless, secure connections across various platforms and devices, WalletConnect has become integral to the Web3 ecosystem, promoting interoperability and enhancing user experience.

WalletConnect serves as an open-source protocol that enables users to connect their crypto wallets to dApps through encrypted QR codes or deep links. This design ensures that users can interact with dApps without compromising their private keys, maintaining security and privacy. The protocol supports a wide array of blockchains, including Ethereum, Solana, and Bitcoin, making it a versatile tool in the decentralized space.

An Overview of the WalletConnect Ecosystem

WalletConnect network participants | Source: WalletConnect docs

The WalletConnect ecosystem is designed to enhance the Web3 user experience through several key components:

• Reown Platform: Formerly known as WalletConnect Inc., Reown offers developers toolkits like AppKit and WalletKit to build intuitive and secure on-chain applications.

• AppKit: A toolkit that enables developers to create seamless app experiences with features designed to make Web3 more user-friendly.

• WalletKit: Provides tools for designing innovative wallet user experiences, allowing users to connect easily with thousands of apps.

WalletConnect operates by establishing an encrypted connection between a user's wallet and a dApp:

1. Initiation: The dApp generates a QR code or deep link containing a connection request.

2. Connection: The user scans the QR code with their wallet or clicks the deep link, initiating a secure, end-to-end encrypted session.

3. Interaction: Users can then interact with the dApp directly from their wallet, approving transactions and accessing services without exposing private keys.

WalletConnect experienced tremendous growth and adoption throughout 2024, solidifying its position as a critical infrastructure provider in the Web3 ecosystem. Here are some of the most notable achievements:

• Massive Network Expansion: The WalletConnect Network recorded a 340% increase in activity, growing from 41 million connections in 2023 to 179 million connections in 2024.

• User Base Growth: The platform surpassed 4.1 million Unique Active Wallets (UAW), reflecting a 137% year-over-year increase.

• Launch of the WalletConnect Token (WCT): WalletConnect introduced WCT in September 2024, facilitating decentralized governance and staking.

• Decentralization Progress: The WalletConnect Network onboarded 16 node operators to distribute control and enhance network security.

• Foundation Establishment: The WalletConnect Foundation was launched, laying the groundwork for a community-owned, decentralized network.

• First Airdrop Campaign: In late 2024, WalletConnect distributed 50 million WCT tokens to reward early adopters and contributors. Learn more about the WalletConnect airdrop in our guide. 

• Feature Innovations: Introduced Smart Sessions, Link Mode, and One-Click Auth, enhancing user experience and security.

The WalletConnect Token (WCT) is the native governance and utility token of the WalletConnect Network, designed to facilitate decentralization, incentivize participation, and enhance protocol sustainability. It plays a key role in governance, staking, and ecosystem operations.

WCT Token Utility

1. Governance and Voting: WCT holders can propose and vote on network upgrades, fee structures, and strategic initiatives. On-chain governance is set to launch in Q2 2025, allowing token holders to shape the future of WalletConnect.

2. Staking and Network Security: WCT can be staked to secure the WalletConnect Network and contribute to its decentralization. Dynamic Staking Model allows users to customize their staking amount and duration, with flexible lock periods from one week to two years. Staking rewards will begin accruing from December 19, 2024.

3. Fee Mechanism and Incentives: WCT will be used for network fees and premium services, ensuring sustainable protocol funding. Validators and node operators will receive WCT rewards for securing the network and maintaining high-performance standards.

4. Ecosystem Growth and Adoption: WCT supports developer incentives, funding grants for dApp integrations and wallet partnerships. Future integrations will expand WCT’s role in cross-chain interoperability and liquidity incentives.

WCT Tokenomics Overview

WalletConnect has a fixed total supply of 1 billion WCT tokens. 

WalletConnect Token Allocation

WalletConnect token distribution | Source: WalletConnect docs

• WalletConnect Foundation – 27%

• Airdrops – 18.5% (185 million WCT across multiple airdrop seasons)

• Team and Development – 7%

• Staking Rewards and Incentives – 17.5%

• Backers and Strategic Partners – Remaining percentage

WCT Token Release Schedule

The WalletConnect Token (WCT) follows a structured release schedule to ensure sustainable distribution and long-term ecosystem growth.

• Initial Circulating Supply (Q4 2024): Approximately 150 million WCT (15% of total supply) will enter circulation through airdrops, staking rewards, and ecosystem incentives.

• Airdrop Distributions (2024-2025): 185 million WCT allocated for multiple airdrop seasons, gradually unlocking to reward network participants.

• Staking Incentives (Starting Q4 2024): 17.5% of total supply will be distributed over several years to encourage network security and decentralization.

• Team & Development Unlocks: 7% of WCT is reserved for the team and core developers, with a vesting period of 3-5 years to align long-term incentives.

• Governance Fund Allocation (2025 Onward): WCT governance fund will unlock in phased tranches, allowing token holders to vote on allocations for grants, ecosystem expansion, and network upgrades.

How to Stake WCT for Governance and Rewards

How to stake WCT tokens on WalletConnect network | Source: WalletConnect docs

Once claimed, WCT tokens can be staked within the WalletConnect Network to support decentralization and earn future staking rewards.

• Dynamic Staking System: Users can stake any amount with no minimum/maximum limits.

• Flexible Locking Periods: Stake durations range from one week to two years.

• Reward Activation: Staking rewards will begin accruing from December 19, 2024, once the first stage of token distribution is completed.

WCT staking dashboard as of December 2024 | Source: WalletConnect blog

Staking Process

1. Navigate to the staking dashboard after claiming WCT.

2. Connect your wallet and approve staking permissions.

3. Choose staking amount & duration and confirm the transaction.

4. Track and adjust stake positions at any time via the WalletConnect platform.

The WalletConnect Token (WCT) Airdrop marks a pivotal moment in the decentralization journey of WalletConnect, allowing early adopters, contributors, and network participants to claim and stake their tokens for governance and future rewards. Season 1 of the airdrop is the first in a series of planned token distributions, reinforcing WalletConnect’s commitment to community engagement and on-chain user experience.

Key Highlights of the WCT Airdrop (Season 1)

WalletConnect airdrop allocation | Source: WalletConnect blog

• Total Airdrop Allocation: 50 million WCT tokens distributed to eligible users and network contributors.

• Total Airdrop Recipients: Over 160,000 users qualified for the airdrop based on prior engagement with WalletConnect.

• Total Airdrop Pool: The 185 million WCT tokens earmarked for airdrops will be gradually released in multiple phases.

• Claiming Period: November 26, 2024 – January 03, 2025.

• Governance Participation: Token holders can stake their WCT and influence protocol decisions.

Eligibility Criteria and Scoring Mechanism

To ensure fairness and reward active contributors, WalletConnect implemented a scoring-based distribution system. Users qualified based on:

• Network Engagement: Number of successful WalletConnect connections and digital signatures.

• On-Chain Activity: Multi-chain transactions, wallet balances, gas fees, and NFT mints.

• Previous Airdrop Behavior: Long-term holding of prior airdrops resulted in a 5% bonus, while quick sell-offs were penalized by up to 80%.

• Contributors & Developers: Additional WCT allocations were reserved for GitHub contributors, Gitcoin donors, SDK developers, Node Operators, and early supporters.

• Security and Compliance: Sybil-resistant measures were in place to prevent fraudulent claims, and users associated with illicit activities were removed from eligibility.

What’s Next for WalletConnect Airdrops?

• Additional Airdrop Rounds: Future WCT airdrop distributions will reward new contributors and active users.

• Governance Expansion: Stakers will gain more influence over network upgrades and protocol development.

• Enhanced Network Utility: Staking rewards, protocol incentives, and voting mechanisms will further integrate WCT into the WalletConnect ecosystem.

As WalletConnect continues to scale its decentralized connectivity infrastructure, 2025 marks a transformative year for the protocol. The roadmap prioritizes governance empowerment, network decentralization, feature innovation, and ecosystem expansion, ensuring a seamless and secure Web3 experience for users and developers.

Key Objectives for 2025

1. Strengthening On-Chain Governance

• Q2 2025: Launch of on-chain governance, allowing WCT token holders to vote on protocol upgrades, fee structures, and ecosystem proposals.

• Decentralization of governance ensures that community members actively shape WalletConnect’s future.

2. Expanding Network Decentralization

• Scaling the Node Operator Program to increase security and reduce reliance on centralized infrastructure.

• Targeting XX+ node operators by mid-2025, fostering greater network resilience and inclusivity.

• Introduction of permissionless node participation, allowing more contributors to support the network.

3. Feature Enhancements for a Superior Web3 Experience

• Smart Sessions: A persistent wallet connection that eliminates the need for repeated approvals across dApps.

• Link Mode: A seamless feature enabling automatic reconnection between wallets and dApps across multiple devices.

• One-Click Auth: A frictionless authentication solution that streamlines logins and dApp interactions.

4. Scaling Airdrop Rewards and Staking Incentives

• Second Airdrop (Early 2025): New reward distributions for long-term users, developers, and active participants.

• Staking Expansion (Q3 2025): Enabling additional staking features such as auto-compounding rewards and liquidity staking pools.

• Dynamic Staking Architecture: Users can customize staking parameters, setting flexible lock durations and optimizing returns.

5. AI-Powered Web3 Automation

• Integration of AI-driven automation to improve on-chain transactions, wallet security, and real-time decision-making.

• Smart wallets will automate multi-signature approvals, gas optimizations, and NFT management.

6. Industry-Wide Expansion and Interoperability

• Cross-Chain Compatibility: Enhancing multi-chain connectivity beyond Ethereum, Solana, and Layer 2 solutions.

• Institutional Adoption: Partnerships with Web2 and Web3 platforms to mainstream blockchain-based authentication.

Long-Term Vision (2026 and Beyond)

• Full decentralization of the WalletConnect Network, ensuring community ownership and protocol sustainability.

• Scalability upgrades to support millions of daily users across decentralized applications.

• Sustainable governance that aligns with evolving market demands and Web3 industry innovations.

WalletConnect has established itself as a cornerstone of the Web3 ecosystem, providing secure and user-friendly connections between wallets and dApps. With the introduction of the WCT token and a clear roadmap toward decentralization, WalletConnect is positioned to enhance blockchain interoperability and user engagement. However, as the network evolves, users should remain aware of potential risks, including security vulnerabilities, governance challenges, and market fluctuations affecting WCT’s value. Staying informed and following best practices in Web3 security will be essential for participants navigating this evolving landscape.

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