Dialogue with imToken He Bin: We want every user to use DeFi equally

This article is an original piece by Chain Catcher, author: Loners Liu

As an important entry point for blockchain, wallets are gradually expanding from asset storage to trading and financial management needs to meet users' increasingly diverse demands. At the same time, more and more people are using wallets to engage with DeFi. So, in which directions will cryptocurrency wallets develop in the future, and what changes will they bring? To explore this, Chain Catcher interviewed a veteran entrepreneur in the domestic blockchain space—He Bin, the founder of imToken, to discuss what functions wallets should carry and some plans for imToken 3.0.

Chain Catcher: Recently, Coinbase went public on Nasdaq, which has given the entire cryptocurrency industry greater confidence. In your view, how does the digital wallet field differ now compared to five years ago in terms of market, competition, and capital environment?

He Bin: imToken emerged in 2015 and was founded in 2016. During the initial stage, we focused more on thinking and exploring where the sparks of blockchain technology would ignite. The conclusion we reached was: digital assets. Based on blockchain technology as infrastructure, tokens serve as the form of value carriers, building financial protocols and services on smart contracts, which will usher in a new wave of technological and commercial innovation for the popularization of native crypto assets and the digitalization of general assets. That's why we named it imToken and created this digital asset wallet.

In fact, when Coinbase started in 2012, it also began with wallets and gradually adjusted to focus on compliant exchanges according to market rhythms. The popularization of digital assets and the growth of user and trading demands in the past couple of years have contributed to its listing on Nasdaq.

From the wallet perspective, compared to five years ago:

• The growth of market size is evident, reflected in user scale, which has broken through from tens of millions to nearly a hundred million (it is difficult to accurately count the real wallet user scale, but from the comprehensive data of decentralized wallets and centralized exchange users data source, the global cumulative users are close to one hundred million). Additionally, the market capitalization of digital assets has recently surpassed $2 trillion, with the locked value of DeFi protocols growing from $0 to nearly 60 billion dollars.

• Competition among wallets has certainly become increasingly fierce. As the user entry point of the blockchain ecosystem, wallets are a high ground of value, attracting many excellent entrepreneurs to create wallet products, and large companies are also laying out their ecosystems. Security, user experience, and service diversification are key focuses for various wallets.

• In terms of capital, the recognition of wallets is increasing, which is reflected in the prosperity of the ecosystem. The importance and future potential of wallets are being recognized by the capital market, and imToken recently completed a $30 million financing round.

Chain Catcher: Looking back, wallets have well supported the DeFi wave. What do you think is the next big opportunity for wallets? Will wallets gradually replace centralized exchanges?

He Bin: Indeed, DeFi is what we refer to as innovative finance built on smart contracts, attracting a group of early participants. Wallets are essential tools for users to engage with DeFi products; it can be said that all native blockchain applications require wallets to serve users. From this perspective, we can speculate on the next big thing in blockchain. Personally, I am looking forward to blockchain serving as a global settlement network, enabling large-scale adoption in more widespread payment scenarios, and payments are precisely one of the most important core functions of wallets.

As for whether wallets will replace centralized exchanges, it is similar to how aviation does not completely replace shipping; they serve different purposes in different scenarios.

Chain Catcher: If blockchain can serve as a global settlement network, it can bring more payment scenarios. However, unlike mobile payments that can be used in various consumption scenarios, the current main payment scenarios in the crypto world are still limited to the NFT field. How do you understand the development of NFTs and their role in the industry?

He Bin: We are very optimistic about the landing and development of NFTs. imToken supported NFT functionality as early as 2018 and collaborated with Opensea to support all NFT information display and transfer functions. Starting from the early CryptoKitties, it attracted many outsiders to use wallets, which once caused congestion on Ethereum.

I believe that in the future, there will be more mainstream scenarios integrating NFT design, such as the recent popular sports trading cards and art collectibles, which are very fitting use cases for NFTs. Moreover, products like games and audio-visual media, which have a broader audience, will undoubtedly bring exponential user growth to the industry. In the future, whether in trading, payments, or social entertainment, blockchain technology will be more widely integrated.

In addition, the non-fungible token standard of NFTs can also map real-world assets onto the blockchain. For example, as an asset initiator, you can NFT-ize real-world assets and place them on platforms like MakerDAO for collateral to obtain loan amounts.

Chain Catcher: Assuming there is a certain user base and enough payment scenarios in the future, how can wallets profit from this? Currently, most of ConsenSys's revenue comes from MetaMask Swap. What are your thoughts on the business model of wallets?

He Bin: In our view, wallets, as tool-type products, should naturally allow users to use them for free. Therefore, the commercial profit model is not as direct as that of exchanges, mining pools, or centralized lending and financial management. I believe that making wallets requires a balance of innovation and practicality, focusing on refining products and accumulating users, and seizing opportunities to launch leapfrog innovative services in the business model.

The logic of MetaMask Swap is similar to that of Tokenlon, which was incubated by imToken. Tokenlon is a wallet-based instant exchange service we started developing at the end of 2017, helping users complete trading and exchanges directly within their wallets.

As of now, the total assets managed by imToken users have reached a peak of $50 billion, with total transfer transactions exceeding $500 billion. As a value-added service, trading has brought significant revenue to the wallet, and other DeFi services are similar, although their current scale is still relatively small. Wallets are naturally suitable for aggregation services, and I believe the revenue potential for wallets in the future is promising.

Chain Catcher: With such a high asset scale at imToken, what conditions should wallets meet to better satisfy users' needs for on-chain asset management? Currently, users' operations on-chain involve complex actions such as savings/loans, contract trading, and providing liquidity.

He Bin: This is a good question. With the explosive growth of Ethereum's DeFi ecosystem and the interoperability of financial protocols, assets that were originally stored in users' wallets are now flowing and distributing layer by layer into different smart contracts. At this point, wallets need to adapt to these changes. We have also seen the emergence of DeFi wallets that specialize in this scenario; they resemble a digital asset dashboard, visually presenting users with the distribution of assets in each wallet, profit and loss situations, and corresponding operation logs.

imToken is also considering optimizing the satisfaction of this user demand, with three core considerations:

• Asset Distribution: Where the user's underlying assets are, their quantity, and value status.

• Token Relationships: More user-friendly representation of the logical relationships between tokens, making it clear at a glance.

• Risk Alerts: Whether the contracts where the user's assets are located have security risks.

Chain Catcher: Speaking of risk alerts, there are various DApps and DeFi protocols on the market, and you have done a lot of work to ensure user asset security. What educational efforts have you made for users?

He Bin: The imToken DApp browser's usage scenario is different from that of an App Store. It is more similar to a Chrome browser. Users can input DApp URLs to use any DApp compatible with EIP 1102 or Scatter standards. This open format is more friendly to many DApp developers and helps the development of blockchain technology. However, the blockchain industry is still in its early stages, and the chaotic DApp market can easily lead to projects of varying quality, including fraudulent applications like gambling and Ponzi schemes.

Therefore, the imToken DApp browser has a multi-level risk control system. For DApp listings, we have a set of review processes. Generally, a DApp listing application form must be filled out, requiring submission of basic information about the DApp, team information, and test images or videos running in the imToken environment. If the DApp is related to user assets, a security audit report must also be submitted. This information is organized by dedicated personnel and established into a listing review card, which is handed over to the QA team for security review. Only after passing the review can the DApp be listed on the DApp browser.

For high-risk DApps reported by users, corresponding risk alerts will appear when users log in. For already reported and clearly high-risk projects, they will be directly banned from use on imToken.

The above describes the efforts made by imToken on the product side regarding user safety. On the other hand, imToken has always focused on user education. We hold AMA activities in the community almost every week, inviting industry veterans to preach blockchain technology. We also regularly conduct beginner training camp courses to provide systematic training for newcomers to the blockchain industry. Finally, all user education content is accumulated by the team to form a "Blockchain Wallet User Guide," which is disseminated as a manual in the community to further lower the threshold for users to understand blockchain.

Chain Catcher: Besides incubating the hardware wallet imKey and the decentralized trading protocol Tokenlon, what other layouts does imToken have in its ecological map? What are the plans for imToken 3.0?

He Bin: The layout of the imToken ecological map mainly revolves around several key words:

• Key: Private keys are assets. As the most important aspect of a wallet, it must assist users in securely storing their wallet private keys, including software encrypted management Keystore and hardware chip secure storage imKey.

• Account: Blockchain accounts are permissionless; anyone can generate an account through public and private keys. The imToken wallet helps users generate and manage this account, which is a container for digital assets and an interface for interacting with blockchain applications.

• Token: Digital assets. Users not only expect to simply hold digital assets but also wish to engage in trading, payments, investments, and financial management services, all of which require sufficient liquidity and stable, reliable trading and payment settlement protocols, which is what Tokenlon provides.

Additionally, we have imToken Ventures, Labs, Fans, Connect… extending our ecological reach into investment, cutting-edge research, user communities, developer and partner communities, continuously expanding the wallet ecosystem.

It is worth mentioning that our Labs foundational research team has been assembled, led by Professor Chen Changwu from National Central University in Taiwan, who has served as a researcher for Ethereum in the Asia-Pacific region and chief scientist at Amis Technology Co., Ltd. He will lead Labs' research work in areas such as blockchain development, multi-party computation, and cross-chain technology.

As the most important wallet application service provider on Ethereum, we also bear the responsibility of popularizing blockchain technology. Currently, we still face many challenges:

• User understanding and experience issues.

• Security of private key storage.

• Network performance and cost issues.

We will tackle these challenges in imToken 3.0, which will design a new private key management mechanism that allows users to be unaware of private keys under security guarantees; unify the identity account system to smooth out differences between different networks; and change the integration method of financial services to allow users to participate in a very simplified manner. We aim to make the imToken wallet the entry point connecting millions of users to the open blockchain network ecosystem.

Chain Catcher: As the first Ethereum wallet, imToken chose to root itself in Ethereum from the beginning. What developments in Ethereum have met your expectations, and what have surprised you? How do you view the current development status of Ethereum?

He Bin: There are indeed more expected developments. As mentioned earlier, we are pleased to see the flourishing development of the Ethereum developer ecosystem and open finance. One unexpected aspect is how difficult the path of Ethereum's scalability has been. Topics like Eth2, PoS, and Sharding, which began research five years ago, still face challenges today. This has led to scalability not keeping pace with ecosystem development, resulting in soaring miner fees, slow transaction confirmations, and issues with project and user overflow. The Layer 2 solutions have undergone several iterations, and Rollup has now become the main bearer of solving scalability, marking a significant adjustment in Ethereum's development path.

Chain Catcher: In your previous public speeches, you mentioned that in the next decade: "You have the opportunity to leverage human-chain interaction technology to seamlessly traverse between the virtual and the real." This aligns with the recently popular concept of the Metaverse. What role do you think crypto will play in the Metaverse?

He Bin: Recently, the community's discussions have shifted from NFTs to the Metaverse, showcasing a very cyberpunk digital world style. The boundaries between the carbon-based world and the silicon-based world are becoming increasingly blurred, and I believe that in the near future, they will ultimately merge. This means that there will be a unique "me" in the physical world, as well as a unique "me" in the digital world. Crypto can help us achieve the uniqueness of independent conscious individuals in digital space, rather than just a pile of binary data. In a certain sense, people can achieve perpetuity in the new digital world. I am very much looking forward to building such a new world.