What is an embedded wallet?

What is an embedded wallet?

In web3 game development, wallets are a core component for interacting with decentralized applications (dApps) and handling digital assets. Traditionally, wallets like MetaMask and Rainbow have been the go-to solutions for users to manage their tokens, NFTs, and in-game assets. 

However, as web3 gaming has grown in popularity, developers have encountered challenges integrating these traditional wallets seamlessly into gaming environments. The result is often a disjointed experience, where players must manage multiple interfaces, disrupting immersion and slowing down the onboarding process.

This is where embedded wallets come in. Web3 developers integrate embedded wallets so that users can manage assets without leaving the platform. By removing the need for external wallet connections, embedded wallets reduce friction and make it easier for players to interact with web3 elements, especially in fast-paced gaming environments.

In this post, we will dive into what embedded wallets are, how they differ from traditional digital wallets, and their unique advantages. We will also explore the challenges of fragmentation within embedded wallets and how Sequence solves this issue by connecting web3 wallets across multiple platforms.

Key takeaways

• Embedded wallets provide a streamlined, in-app experience that removes the need for external applications.

• Traditional wallets like MetaMask and Rainbow require separate interfaces, while embedded wallets integrate directly into apps or games.

• Embedded wallets, such as Privy, Coinbase Wallet, and Sequence, improve user experience by reducing onboarding friction.

• The challenge of fragmentation, where users might accumulate multiple wallets across different apps, can complicate asset management.

• Sequence solves this fragmentation issue by aggregating and connecting embedded wallets, offering a unified, seamless experience.

How embedded wallets differ from traditional wallets

To understand the advantages of embedded wallets, it's important to first define the key differences between traditional and embedded wallets.

Traditional wallets, such as MetaMask and Rainbow, are external applications or browser extensions that users interact with separately from the dApps or games themselves. These wallets store and manage users' private keys, allowing them to access their assets, sign transactions, and engage with web3 services. However, the process often requires users to install the wallet, manually connect it to the game or web3 application, and switch between interfaces, which can introduce friction and confusion, particularly for new users.

On the other hand, embedded wallets are integrated directly into the game or application. This means users don’t need to install an external app or go through complex setup processes—they can access their digital assets seamlessly as part of the game’s native experience. 

Embedded wallets store private keys either on the user's device or in a secure cloud environment, making the experience more streamlined, especially in gaming, where speed and ease of use are critical. Examples of embedded wallets include solutions like Privy, Coinbase Wallet, and Sequence, which allow developers to integrate web3 functionality without requiring users to leave the platform.

Challenges with embedded wallets

While embedded wallets offer a more seamless and integrated experience for users, they are not without challenges. One of the primary issues with embedded wallets is fragmentation. 

Since these wallets are often tied to specific applications or games, users may end up with multiple wallets spread across different platforms. This creates a similar problem to the traditional web2 experience of managing multiple accounts for different services.

In the web3 space, this fragmentation can cause confusion and inconvenience for users. Imagine a player who has a different embedded wallet for each game they interact with. Over time, this leads to a disjointed user experience, where managing various wallets and remembering which and where assets are stored can become overwhelming. Moreover, with every new game or application, users may need to go through wallet setup processes repeatedly, reducing the intended convenience of embedded wallets.

This fragmentation is particularly concerning as the web3 ecosystem grows and more decentralized apps (dApps) and games adopt embedded wallets. Without a solution, the fragmentation issue could discourage users from fully embracing web3.

Aggregating and connecting embedded wallets (Sequence’s solution)

Sequence addresses this problem by offering a solution that aggregates and connects multiple embedded wallets across different platforms. Instead of users being forced to manage separate wallets for each dApp or game, Sequence enables a unified experience where wallets can be linked and managed through a single interface. This aggregation not only streamlines asset management but also improves the overall user experience by giving users a more holistic view of their digital assets across different platforms.

Developers benefit from this too. By integrating Sequence, they can ensure that their users aren’t burdened with managing fragmented wallets, providing a more cohesive and intuitive experience. This capability is particularly important as the web3 ecosystem grows, and users become more active across various dApps and games.

Embedded Wallet configuration within Sequence Builder

Sequence Embedded Wallet solution makes it easier for developers to implement blockchain functionality while also solving the fragmentation issue, which has been a long-standing pain point for users in the web3 space. With Sequence, users can enjoy a more connected and streamlined experience, helping them stay engaged with the platform without getting bogged down by wallet management.

Are you ready to integrate a seamless web3 wallet solution into your decentralized application? Explore how Sequence Embedded Wallets can streamline user experiences and solve fragmentation challenges.