The Future of Web3 Onboarding: Why Every App Needs Wallet Infrastructure

We’re on the cusp of an explosive growth phase for embedded wallets. Smart wallets can already power everything from social platforms to DeFi protocols, and it's clear that soon every app, regardless of platform, will eventually have crypto wallet functionality.

But here's the reality: Present-day crypto wallet UX is still transitioning, and wallet implementation can be painful for developers–especially those without deep Web3 expertise. No engineering manager wakes up hoping to spend the next weeks building authentication for wallets and then battle-testing everything to ensure security. This is where Wallet Infrastructure comes in.

Companies like Dynamic are pioneering advanced cryptographic techniques that make wallets both secure and invisible, and Gelato's Smart Wallet SDK brings together these innovations with gas abstraction and multi-chain support to supercharge how developers build crypto applications.

Nothing is more counterintuitive and prone to disaster than requiring users to write down a seed phrase and so on to log into crypto. For as long as this is a part of the picture mass adoption cannot happen. But seed phrases are only part of the picture. Users have to understand gas fees and native token conversions, navigate counterintuitive transaction approvals, and deal with browser extensions they hope are secure.

This complexity has created a massive barrier between crypto's potential and its actual adoption. While Web2 companies have spent decades perfecting user onboarding, crypto has unique challenges. Before innovations like account abstraction things have largely remained stuck in a world of technical barriers.

Standards like ERC-4337 introduced a new paradigm where accounts could be programmable smart contracts rather than simple key pairs. This enabled features like gas sponsorship, transaction batching, and social recovery without requiring protocol-level changes. Building on this foundation, EIP-7702 takes it further by allowing existing EOA wallets to temporarily delegate their execution logic to smart contracts. This means the millions of existing wallet users can access smart account features without migrating to new addresses, and can preserve their on-chain history and identity while gaining programmable superpowers.

But having these primitives is only the first step. Just as TCP/IP didn't automatically create the modern internet, account abstraction standards alone don't solve user onboarding. What's needed is a layer of developer infrastructure that makes these powerful primitives accessible and turn complex cryptographic operations into simple API calls.

As Dynamic discovered through their journey, the real challenge wasn't the cryptography itself. It was understanding that developers needed the same thing they've always needed: infrastructure that just works. No engineer wants to reinvent the wheel with authentication. They want to build products. This led Dynamic to reimagine wallets as a solved problem that should fade into the background.

Learning from Auth0, Plaid, and Stripe

This is where Web2's infrastructure playbook becomes instructive. Dynamic drew from these parallels, recognizing that successful infrastructure companies take complex, necessary functionality and make it boring. Boring in the best way – so reliable and simple that developers never think about it.

Just as no developer rebuilds authentication from scratch when Auth0 exists, or payment processing when Stripe is available, crypto developers shouldn't be rebuilding wallet infrastructure. The alternative would be trying to reinvent the entire financial system just to enable basic functionality like email login.

So what are the trust assumptions of this tooling?

Trust assumptions in Web2 infrastructure:

• Auth0: Trusted with user credentials and session management
• Plaid: Trusted with bank credentials and financial data access
• Stripe: Trusted with payment processing and temporary fund custody

Web3 has unique challenges but also unique opportunities. Unlike traditional services where you trust a company with your actual assets, modern WaaS providers use cryptographic techniques like MPC where no single party ever has full control. The private key literally never exists in one place. Additionally, vendor independence ensures you're never locked in – you can always recover your users' wallets even if the provider disappears.

The Gelato Smart Wallet SDK takes wallet abstraction to its logical conclusion by combining:

• Smart EOAs (EIP-7702) - Transform existing wallets into programmable smart accounts
• Multichain Gas Abstraction - One gas tank across 50+ chains
• Embedded Wallets - Powered by Dynamic's TSS-MPC technology

Developers can now offer users:

• One-click onboarding with email, social login, or passkeys
• Gasless transactions sponsored by applications
• ERC-20 gas payments instead of managing native tokens
• Programmable wallets with batching, session keys, and automation

Modern WaaS goes far beyond basic key management. Specifically, Dynamic's approach uses TSS-MPC (Threshold Signature Scheme Multi-Party Computation).

Instead of generating a private key and splitting it, TSS-MPC relies on cryptography where multiple parties jointly compute signatures without any party ever seeing the complete key. Think of it like a safety deposit box that requires multiple keys to open simultaneously – but no single person ever possesses all the keys.

The potential of programmable money becomes real:

• Automated trading strategies that execute based on conditions
• Scheduled payments without users being online
• Conditional transfers with built-in logic
• Context-aware spending limits
• Seamless cross-chain operations

Not only that, but this technology also unlocks three critical capabilities:

Vendor Independence

Unlike traditional services where you're locked into a provider, modern WaaS allows you to back up key shares on your own infrastructure. If a wallet provider ever becomes unavailable, you can independently recover user wallets using these backup shares. This eliminates vendor lock-in, which is a non-negotiable requirement for enterprise adoption and regulatory compliance.

Programmable Rule Engines

Wallets become intelligent through programmable constraints. You can limit a wallet to only interact with specific contracts, restrict trading to certain token pairs, or enforce spending limits based on context. This enables everything from regulatory compliance in fintech apps to preventing game economies from being exploited, all while maintaining the flexibility developers need.

Delegated Access

Applications can execute transactions on behalf of users within pre-defined parameters. Unlike giving away your private keys, delegated access means users can authorize specific actions – like "sell my position if ETH drops below $2,000" or "claim my gaming rewards daily" – without giving unlimited control. The application can act, but only within the exact boundaries users set.

There's a shift happening in how companies think about identity and financial services. Historically, only the largest tech companies could afford to build payment systems or identity platforms. Crypto changes this equation dramatically.

By lowering the barriers to entry, embedded wallets enable any application to offer financial services. We're already seeing this transformation: platforms aren't just adding wallets as a feature – they're able to build entire financial ecosystems. They're creating their own "Login with Google" systems that work across partner sites, turning what started as simple wallet integration into comprehensive identity and payment networks.

It's happening now with platforms like Farcaster, Lens, and numerous gaming ecosystems. All that’s needed is to add wallets for better UX, realize you now have a payment rail, expand into identity, and you become the financial layer for your vertical.

The Smart Wallet SDK is built on Gelato's battle-tested infrastructure:

• 5+ years in production powering DeFi giants like GMX, MakerDAO, and Aave
• 99.999% uptime across billions of transactions
• 50+ chains supported with unified gas management
• Enterprise-grade security with audited components and SLAs

But most importantly, it's designed for developers who want to build, not manage infrastructure.

Getting Started

Ready to add wallet functionality to your application? The Gelato Smart Wallet SDK makes it simple:

• Install the SDK: Available as modular NPM packages
• Configure your provider: Choose between embedded wallets, smart EOAs, or both
• Enable gasless UX: Sponsor transactions or accept ERC-20 payments
• Ship to production: Monitor usage through a unified developer console

The maturation of technologies: EIP-7702, account abstraction, MPC, and production-ready infrastructure, has finally made seamless crypto UX possible, and it gives you the ability to create an ecosystem around your app by creating your authentication and smart wallet that works everywhere.

Whether you're building a DeFi protocol, a gaming platform, or embedding financial services into your existing app, wallet infrastructure shouldn't be your bottleneck. With Gelato's Smart Wallet SDK, it won't be.

Ready to integrate smart wallets into your application? Build with Dynamic on Gelato