2. The Problem

The Security & Usability Tradeoff

Traditional crypto wallets, such as Externally Owned Account wallets ("EOA wallets"), force users to choose between safety and convenience, and this creates real-world issues:

Seed phrase anxiety. Users must protect 12–24 random words ("seed phrase") that represent their entire account. If they lose the phrase, the wallet will be unrecoverable. If they write it down incorrectly, store it in the wrong place, or forget where it is, the result will be the same: permanent loss.

Private key exposure. In most wallets, private keys are stored in environments that can be targeted by malware, fake browser extensions, phishing sites, SIM swaps, or social engineering. If the key is compromised, the entire wallet will be compromised. There is no safety net.

Confusing onboarding. New users must understand basic concepts including key generation, seed backups, gas fees, network switching, and multiple addresses before onboarding. Many people give up halfway before they ever make a transaction.

No recovery options. Web2 users expect password resets and account recovery. In Web3, one mistake can mean irreversible loss. There is no support desk, no appeal process, and no safety mechanism beyond the user's own habits.

On top of this, EOA wallets cannot verify whether a signing request comes from the correct domain. This makes phishing one of the most common causes of loss in Web3, even among experienced users.

The Reputation & Value Problem

Even when users manage to navigate the security and onboarding challenges, crypto wallets today remain passive in the way that meaningful engagement or contribution is not recognized.

No reward for good behavior. Users who help communities grow, create valuable content, or engage responsibly are treated the same as users who do nothing. Wallets have no way to acknowledge or reward positive participation.

Non-portable reputation. Each time a user joins a new platform or blockchain, they start from zero. Trust built over months or years in one ecosystem carries no weight elsewhere. This resets the user reputation journey over and over again.

Misaligned incentives. Without visible reputation or accountability, communities struggle to encourage constructive participation. Good actors and bad actors look identical on chain. This makes it difficult for ecosystems to maintain quality, trust, and long-term alignment.