What are Cross-chain Wallets?

Learn about cross-chain wallets and the multi-chain DeFi ecosystem. How are cross-chain wallets shaping the future of Web3?

Key Takeaways

  • Users activity has grown on multiple blockchains recently.
  • Cross-chain wallets can interact with different blockchains.
  • The future multi-chain landscape may depend on wallet developments.

Decentralized finance (DeFi) has spread across a multi-chain environment over the last few years. Many of these blockchains are Ethereum Virtual Machine (EVM) compatible, which means the same wallet can be used for each chain, but participating in DeFi on a chain like Solana requires using a different wallet.

The last Crypto Basics article discussed the variety of different Solana wallets users can choose from to interact with Solana protocols. A few of those wallets were cross-chain compatible, and this article will delve deeper into the world of cross-chain wallets.

Web3’s Multi-Chain Landscape Requires Multiple Wallets

Solana is a scalable blockchain that is working towards providing a single platform for web-scale and composable decentralized applications (dApps). Being able to have dApps interact with each other on the same Layer 1 is a huge advantage, but it’s hard to ignore that Web3 is currently being developed across multiple chains.

coin98 xdefi interoperability cross-chain
Coin98 Wallet lets users interact with multiple chains in one place.

Due to the limitations of interoperability, every time users interact with dApps on different chains with different architectures, they have to switch their wallets to continue finalizing transactions. Having to go back and forth between different wallets can be annoying at best and confusing at worst–a lapse in UX that hampers future adoption.

How Cross-chain Wallets Improve Web3 UX

For example, if a user wants to transfer Token X from Blockchain ABC to Blockchain 123 through Wormhole or Allbridge, they need to approve transactions on both chains at different times. Now, imagine how much everyone hates pop-ups; the same kind of user experience is reproduced when a token bridge summons different web wallets for different chains.

wormhole allbridge cross-chain liquidity transfer token bridge
Wormhole Portal supports token transfers from chain to chain.

Instead of having multiple wallet interfaces popping up on the screen, cross-chain wallets like Coin98 and xDeFi allow users to manage all of their transactions in one place. It may sound like a small improvement to a user’s quality of life, but these cross-chain wallets may one day provide the seamless access necessary for regular folks to interact with Web3.

What the Future Looks Like for Cross-chain Web3

The current goal of many projects is to create a fully composable and trustless network of independent blockchains. The future success of the cross-chain DEX and cross-chain NFT markets depends on a wallet that can interact with multiple blockchains without the user realizing what’s happening.

The technology that will make seamless interaction with multiple chains has quite a few things to figure out, including how to provide cross-chain liquidity quickly and efficiently. However, through incremental steps, progress is being made to unify the multi-chain ecosystem with every passing quarter.

How Can Users Better Understand Multi-chain Web3?

It can be difficult to pay attention to what is happening across the vast expanse of Web3 development. Old hands can miss many of the incremental improvements being made through the noise of the crypto news, and newbies certainly have a ton to digest at once.

One project called Layer3 is making it easier for anyone to brush up on the latest in Web3 and multi-chain applications. Layer3 gamifies learning about Web3 by providing tasks, or “bounties,” that users can complete to win points, tokens, or NFTS.

layer3 multi-chain cross-chain DEX cross-chain NFT
Layer3 helps users explore Web3.

Some of the tasks on Layer3 are already made easier by having a cross-chain wallet, displaying how much of an impact wallet design could have on the adoption of Web3. The future may be on multiple chains, but it might not be on multiple wallets.

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