Solana DeFi and Airdrops Drive Phantom User Base to New Heights


Phantom, a widely used crypto wallet in the Solana ecosystem, has seen its active user base more than triple over the past year, its CEO and co-founder Brandon Millman exclusively shared with TechCrunch.

As of January 2024, Phantom reached 3.2 million monthly active users (MAUs), up 220% from 1 million a year ago, and recorded 941,000 installs, up 463.5%. more than 167,000 installations during the same period, Millman said. “These numbers essentially represent our peak” and outperformed usage and metrics from the previous crypto bull market in 2021 and early 2022, he added.

“THE jito And Jupiter release were a major turning point for the ecosystem,” Millman said. “Solana has reached escape velocity and proven itself to be a best-in-class ecosystem. It’s the platform that attracts some of the best builders in the world.

Solana-focused decentralized finance (DeFi) Jito Network and decentralized aggregator Jupiter both made airdrops in late 2023 and early 2024, respectively, offering users of their projects rewards, or tokens, essentially as “thank you” for using their service.

when it rains, it pours

These airdrops, coupled with Solana’s recent memecoin crazecould be the reason why the ecosystem has seen an increase in old and new users.

“There is a lot of DeFi activity, but this amounts to crypto wallets becoming the new entry point into crypto,” Millman believes. When a user first gets into crypto, the typical method is through centralized crypto exchanges like Coinbase, which he attributes to “word of mouth”, but now the world has changed, he thinks. he, “more and more people are downloading a crypto wallet”. to start.

This entry point to on-chain wallets and apps is becoming “the new thing that people are trying to get to when they want to use crypto,” Millman said.

In addition to being a place where people can hold and trade their cryptocurrencies, Phantom also aims to be a “secure gateway” to Web3 experiences, Millman noted. During the Jupiter drop, link sharing on the Phantom website helped generate 1.1 million visits to the Jupiter claim site, in an effort to prevent people from being scammed by malicious links , he added.

Growth relative to revenue

Phantom started in 2021 as a Solana-only crypto wallet, but has since expanded to provide multi-chains. support for Ethereum, Polygon and Bitcoin as well. Now, the company aims to grow its user base as it seeks to become the premier destination for people new to crypto and wallets.

“Right now we are in a focused growth phase. We are not very focused on generating revenue, but prefer to pass it on to user growth. The more users who sign up, the more developers are attracted to the idea of ​​leveraging the ecosystem, and the more apps and users we get. It’s like a flywheel and we’re looking to grow as fast as possible,” Millman said.

Phantom makes money the same way most other wallets do: by providing convenient in-app features for trading cryptocurrencies and charging a small fee for them. The company, which is backed by investors like ParadigmAndreessen Horowitz, Jump Capital and Solana also have “strong balance sheets,” Millman said, so they don’t need to focus much on revenue at the moment.

“We believe the future of wallets is multi-chain, just as crypto exchanges have evolved. Coinbase started as a Bitcoin-only exchange, then added Ethereum support, and one thing led to another,” he said. “No one can imagine a world where trade has only one coin. Wallets will follow the same path.

While it is still too early to expect the masses to self-custody their crypto assets, the growing use of crypto wallets portends further growth in this area. In the past, blockchain applications were too expensive or complicated to use, but these airdrops and the resulting influx of users show the benefit of composability, Millman added.

Crypto exchanges like Coinbase run a completely closed system, but on-chain systems like Solana are open for developers to build on. So by trading or staking assets on exchanges, people could potentially miss out on rewards such as airdrops, Millman noted.

And when you consider that crypto wallets also allow users to trade cryptocurrencies, they become more attractive than exchanges because they also provide access to on-chain benefits. “DeFi applications are now encouraging their use with airdrops, and the only way to do this 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 the adoption of crypto wallets to continue to increase as more providers and ecosystems bring new features and explore new avenues. “There are still a lot of sharp edges and foreign concepts, that’s for sure. Secret recovery phrases are the de facto key management of wallets. But these are areas where we’re going to innovate 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 just buy, hold, and sell cryptocurrencies. “It’s a window into a much richer world of interoperability.”


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