The Generalist - MetaMask: The Hero Crypto Deserves

Hello friends,

I hope all of you in the US enjoyed a lovely Thanksgiving. I'm really glad to be back and am excited to cover some fun topics over the coming weeks. Over the holiday, The Generalist quietly passed 50,000 subscribers. I feel incredibly lucky to have each and every one of you onboard. And, I'm extremely grateful you trust me to visit your inbox each week, and that all of us get to learn and think, together. Here's to the next 50,000!

Today's piece is one I've been thinking about for a long time: MetaMask. The crypto wallet provider now has more than 21 million users, and has surpassed $200 million in revenue this year. While those figures make it seem like MetaMask is on fire, public sentiment tells a different story. Many users seem frustrated by the product and its perceived lack of progress.

We'll explore why that's the case, and think through how MetaMask might evolve in the years to come. In the process, we'll explore what crypto wallets are and why they matter. For those of you that have yet to set up a crypto wallet, I hope this serves as both introduction and impetus.

I can't wait to hear what you think.

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Actionable insights

If you only have a couple of minutes to spare, here’s what investors, operators, and founders can learn about MetaMask.

• Crypto wallets are no longer niche. Three years ago, there were 31 million crypto wallet users; today, there are close to 80 million. While there’s a long way to go before web3 reaches its full potential, products like MetaMask are far from esoteric. It has 21 million users alone.
• MetaMask is a big business. In 2021, the company surpassed $200 million in revenue. That is thanks to its "Swaps" feature, which allows users to exchange their cryptocurrencies without leaving the product.
• Consumers have different expectations. Clients like MetaMask were built with developers in mind. That made sense given crypto's origins, but as less technical consumers start to dabble in web3, a higher premium is being placed on design.
• Building defensibility is tricky. Because crypto wallets pull data from the blockchain, there is no user lock-in. In a matter of minutes, a user can switch from one wallet provider to another with no loss of data. That means providers have to find other ways to build defensibility. Winning over developers is one.
• Competition is heating up. Right now, MetaMask is king. There are plenty of rivals gunning for the throne, though. Coinbase offers a wallet, and Block (fka Square) is likely to follow suit. Insurgents like Rainbow, Phantom, and Argent are not to be underestimated.

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Disclaimer: I'd like to take a moment to remind readers that I am not a journalist. Rather, I am a writer and investment analyst. The Generalist exists to explore the future and the companies defining it. It is not an investigative news organization. As part of my process, I tell the stories of how great businesses began. In today’s piece, you’ll notice that this history is contested. I have done my best to be as thorough, objective, and even-handed as possible, presenting the facts as I learned them.​
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Bruce Wayne sits across a dinner table from Gotham city's dashing District Attorney, Harvey Dent. Flanked by unavailable love interest Rachel Dawes and his own glamorous date, Wayne listens as Dent warms into his speech. He is defending the vigilantism of Batman, not knowing that the man behind the mask is sitting in front of him.

"When their enemies were at the gates, the Romans would suspend democracy and appoint one man to protect the city. And it wasn't considered an honor. It was considered a public service."

"Harvey, the last man that they appointed to protect the Republic, was named Caesar, and he never gave up his power," Dawes counters.

"Ok, fine...You either die a hero or live long enough to see yourself become the villain."

This scene outlines the perspective of Christopher Nolan's 2008 film, The Dark Knight. The distance between admiration and enmity, heroism and villainy, is a hairline fracture — the difference, simply a matter of time.

It's also an apt framing for MetaMask. Though far and away the most widely-used wallet in the crypto space, responsible for onboarding tens of millions of users to the world of web3, a clunky product has left many of the sector's most ardent adherents exasperated.

The result is a paradoxical company capable of provoking wildly different perspectives. Supporters will point to MetaMask's admirable ubiquity and jaw-dropping $200-plus-million in 2021 revenue as an indication that MetaMask is just getting started. Meanwhile, skeptics prepare their eulogies, seeing the company as web3's Yahoo, waiting to be eclipsed by Google.

As in Nolan's film, the difference between those positions is neither as inscrutable nor as intractable as you might think.

In today's piece, we'll parse MetaMask's place in the crypto landscape, outlining its provenance, functionality, and importance. We'll also unpack its obvious flaws, think through potential next moves, and enumerate those beginning to challenge for the throne. In particular, you'll hear about the following:

• Origins. MetaMask's history can be traced back to the first-ever Ethereum Devcon. It is also a contested tale.
• ConsenSys. The parent company behind MetaMask has gone through multiple evolutions.
• Product. Though robust architecturally, MetaMask's front-end experience can be bewildering to newcomers.
• Traction. This has proven an explosive year for MetaMask. It's generating hundreds of millions in revenue, with close to a 100% margin.
• Future. We are in the very early stages of the crypto revolution. Wallets like MetaMask will have to adapt to technological and social changes.

Let's get to it. ​
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IN A MEME

For the pictorially inclined, here's the whole piece — all 9,000 words of it — in a single meme.

PUZZLER

All guesses welcome and clues given to anyone that would like one. Just respond to this email for a hint.

Jake M entered the lions' lair first and escaped unscathed. He was followed by pride of other puzzlers, including Jake M, Greg K, Krishna N, Thomas K, Dhruv S, Rohit K, James L, Jamie M, Aaron M, Josh C, Frank H, Ankit J, Jim W, Tony D, Toxin, Lorenzo C, Lawrence L, Russ A, Adam N, Dan M, Riley V, Nick T, Nick S, Austin V, Andrew A, Alex L, Richard S, Srinivas P, Thomas R, BB, Herz, Nathaniel T, Michael O, Binoi C, Keshav J, Asad K, Abhishek V, Jared J, Kunal G, Sudarshan P, Bernard V, Vijay R, Gaute E, Benjamin H, SN, Shrey S, Matt Y, Lorcan B, Stephen C, Nnamdi E, and Thea T.

All recognized the solution to our last riddle:

The answer? The room full of lions, of course. If they haven't eaten in years, they will have died making it much easier for the murderer to survive. Now, he just has to find a way to escape from the room...

It's brisk and wintery in Brooklyn. I hope you have a refreshing, invigorating Sunday, wherever you are.

Until next time,

Mario