Choosing the Right Embedded Wallet for Your Web3 Application

• Traditional finance is going onchain: Stripe's acquisition of Privy and Bridge signals mainstream financial infrastructure converging with crypto rails
• Stablecoins are winning: $33 trillion in transactions last year, outpacing Visa and Mastercard combined
• Smart accounts are the unlock: EIP-7702 enables gasless transactions, batch operations, and familiar authentication
• Three leaders, three approaches: Dynamic (security and flexibility), Turnkey (verifiable automation and scale), Privy (authentication-first)
• Enhance with Gelato: Add gasless UX and programmability to any wallet with the Smart Wallet SDK

Building next-level onchain experiences requires god-tier wallet infrastructure. The race has intensified dramatically following Stripe's purchase of the crypto wallet provider Privy, coming on the heels of their previous acquisition of Bridge, a stablecoin infrastructure firm. This has happened as other wallet providers have grown rapidly, with Dynamic having onboarded over 40+ million users and Turnkey processing millions of transactions weekly.

It's a signal that the stablecoin market has reached a point where mainstream financial infrastructure is leveling up via crypto rails.

Consider the velocity of change: Active stablecoin wallets have jumped 53% this year, from 19.6 million to 30 million, while monthly transfer volumes more than doubled year-over-year in February, reaching $4.1 trillion.

With more than $33 trillion in transactions processed last year (outpacing traditional networks like Visa and Mastercard), stablecoins are becoming the rails for global commerce. Stripe’s will support two dollar-denominated stablecoins—USDC and Bridge's USDB—with businesses able to hold a balance in stablecoins, receive funds on both crypto and fiat rails (like ACH and SEPA), and send stablecoins almost anywhere in the world. The infrastructure battle is now about who will own the UX layer, and that means providing a secure, versatile and seamless experience for users and developers.

Old-school crypto wallets created significant friction that's simply incompatible with institutional scale. The technical milestones enabling this shift include the Ethereum Mainnet Pectra upgrade, with EIP-7702 bringing Smart Account features to EOAs, allowing them to access the benefits of Account Abstraction (ERC-4337), including: Sponsored Transactions where a paymaster covers the gas fees, Batched Transactions for sending multiple transactions with a single signature, and Passkeys for faster and more secure authentication. An added transaction type lets an EOA "borrow" a piece of contract code so that an address can be used both as an EOA as well as a smart wallet: batch multiple calls, have someone else pay the gas, enforce custom spending rules.

90% of financial institutions are taking action on stablecoins today, with 86% reporting infrastructure readiness.

Everyday users don’t want to interact with traditional crypto wallets. Thanks to smart accounts, they won’t have to. No longer does wallet infrastructure need to teach users to use crypto. Instead, the goal is to make crypto invisible within familiar experiences.

The technical infrastructure enabling this transformation extends beyond smart accounts to revolutionize authentication itself, with proposals like EIP-7212 aiming to reduce gas costs for passkey verification, making biometric authentication economically viable on-chain. The use of passkeys improves defenses against the common plagues of the crypto world: scams and hacks.

Passkeys enhance security and usability in smart wallets through client-side signing utilizing WebAuthn API to create and sign passkeys. Smart contracts then verify P256 signatures to ensure secure transaction authorization.

The infrastructure is maturing at exactly the moment institutional demand is exploding.

Let's explore how three leading wallet infrastructure providers - Dynamic, Turnkey, and Privy - are positioning themselves to capture this convergence of traditional finance and Web3.

Embedded wallets solve core usability challenges by providing:

• Seamless onboarding with familiar authentication methods
• Invisible key management that abstracts away complexity
• Programmable features for custom user experiences
• Enterprise-grade security without compromising usability

Let's explore how each provider approaches these challenges.

Dynamic has established itself as a comprehensive wallet infrastructure provider that has onboarded over 40+ million users across thousands of applications. Their focus on universal compatibility and developer experience makes them particularly strong for teams building across multiple chains and wallet types.

Key Strengths

TSS-MPC Security Architecture

Dynamic employs Threshold Signature Scheme Multi-Party Computation (TSS-MPC) for key management. This approach generates cryptographic key shares that collectively enable signing without ever constructing a complete private key. With sub-second signing speeds and support for ECDSA, EdDSA, and BIP-340 protocols, Dynamic covers virtually every blockchain ecosystem.

Global Wallet Kit

One of Dynamic's standout features is their Global Wallet Kit, which transforms your brand into a universal login method. This enables users to carry their wallet identity across different applications, creating network effects for ecosystems building multiple interconnected apps.

Extensive Integration Support

With support for 500+ external wallets and comprehensive authentication methods (email, SMS, social logins, passkeys), Dynamic excels at meeting users wherever they are. Their modular approach allows developers to mix embedded and external wallet strategies seamlessly.

Dynamic's SDK provides pre-built UI components that can be customized or used headlessly, supporting React, React Native, Flutter, Swift, and other frameworks.

Turnkey positions itself as "private key management made simple" with a focus on programmable wallets and transaction automation. Built by the team behind Coinbase Custody, Turnkey emphasizes verifiable security and flexible primitives.

Key Strengths

Verifiable Infrastructure

Turnkey's unique value proposition is verifiable key management within Trusted Execution Environments (TEEs). Turnkey’s security architecture ensures that raw private keys are never exposed to Turnkey, your software, or your team. Their infrastructure allows independent verification of security properties, replacing blind trust with cryptographic proof. This makes them particularly attractive for enterprises and regulated entities.

Organization-Based Architecture

Turnkey structures everything around organizations and sub-organizations, providing natural boundaries for different use cases. This design excels for:

• B2B platforms managing wallets for multiple customers
• Exchanges implementing sophisticated treasury management
• Applications requiring complex permission hierarchies

Policy Engine

Their granular policy engine allows precise control over wallet operations, including:

• Transaction limits and approval workflows
• Multi-signature requirements
• Custom quorum configurations
• Time-based restrictions

Privy combines authentication and wallet infrastructure, making it ideal for teams that want a unified solution for user management and onchain interactions. Their focus on conversion optimization and user experience has attracted major applications like Blackbird and Hyperliquid.

Key Strengths

Hardware-Secured Architecture

Privy's infrastructure runs entirely within TEEs, ensuring keys are sharded, encrypted, and distributed across isolated services. This hardware-based security model provides strong guarantees and a high level of performance.

Integrated User Management

Privy provides comprehensive user management including:

• Progressive authentication flows
• User profiles and metadata
• Session management
• Analytics and monitoring

Rich Integration Ecosystem

Privy's pre-built integrations with fiat on-ramps, bridges, and smart wallet providers reduce implementation complexity. Their partnership approach means new integrations are continuously added based on customer needs.

Each provider excels according to its unique positioning.

Choose Dynamic when:

• Building across multiple chains and wallet types - Dynamic's TSS-MPC supports ECDSA, EdDSA, and BIP-340, covering every EVM chain, Solana, Bitcoin, Sui, and more
• Creating an ecosystem of interconnected applications - Their Global Wallet Kit enables users to carry their embedded wallet across ecosystems with a shared identity
• White-glove support - All enterprise customers receive private channel with Dynamic team with engineers on standby
• Needing flexible authentication options - Offers the widest range from email/SMS to social logins, passkeys, and wallet connections

Choose Turnkey when:

• Building automation-heavy applications - Their API-first design and policy engine enable complex programmatic workflows
• Requiring verifiable security guarantees - TEE-based infrastructure allows cryptographic verification of security properties
• Implementing complex permission structures - Organization/sub-organization hierarchy naturally models B2B relationships and permissions
• Managing wallets at scale programmatically - Built for millions of wallets with granular control via their robust REST API

Choose Privy when:

• Prioritizing user conversion and experience - Pre-built components and authentication flows optimize for the highest conversion rates
• Building consumer-facing applications - Focuses on seamless onboarding with social logins and invisible wallet creation
• Wanting integrated user management - Combines authentication, profiles, and wallets in one unified SDK
• Needing pre-built integration ecosystem - Extensive partnerships with on-ramps, bridges, and smart wallet providers ready out-of-the-box

Gelato Smart Wallet SDK can enhance your implementation with production-tested infrastructure for gasless user experience and programmable features.

Universal Compatibility

• Native EIP-7702 Support
• Most gas-efficient implementation for sponsored transactions
• Seamless EOA-to-smart-account upgrades
• Future-proof architecture

Battle-Tested Infrastructure

• Powers applications like GMX and Infinex
• 99.999% uptime across 50+ chains
• Billions of transactions processed

Modular Integration

• Use only the features you need
• No vendor lock-in
• Compatible with any signer

The embedded wallet landscape offers top-tier solutions for every use case. Whether you prioritize universal compatibility, verifiable automation, or seamless user experience, modern wallet infrastructure has evolved far beyond simple key storage.

• 📓 Read the docs
• 💻 Try the demo
• 🐙 Explore the SDK

If you're building next-generation onchain wallet interfaces, embedded experiences, or smart account tooling, the Smart Wallet SDK is built for you.

Ready to start building? Schedule an exploration call.