Metamask: Is It The Best DeFi Wallet?

Metamask is the Jil Sander of the Web3 world – sleek, minimalistic, and focused on functionality. It’s the perfect place to stash your crypto and NFTs.

No wonder that any crypto trader worth their salt will have its Maison Kitsuné-inspired fox icon gracing their phone’s screen, as this wallet service boasts a whopping 30 million users each month.

Let’s dig in deeper, shall we?

What is MetaMask?

MetaMask is undoubtedly one of the most recognizable self-custodial Ethereum software wallets in the cryptocurrency landscape. Its famous Orange Fox plug-in is the perfect gateway to the world of ETH-based tokens, decentralized applications (DApps), and decentralized finance (DeFi).

With over 30 million users worldwide in 2022, this Web 3 wallet has started catering to a growing number of institutional users.

Despite being a serious business, MetaMask has managed to make using crypto wallets fun. When you first install the extension, the fox icon will follow your cursor movements. This icon represents an anonymous identity and becomes your sign-in for Web 3 apps, replacing the need for traditional usernames and passwords.

MetaMask’s default network is Ethereum, but the wallet also supports multiple Ethereum-compatible networks like Polygon and Optimism. Although visible in the same wallet app, assets on each blockchain remain separate. So, you’ll have to switch networks to access these on each chain.

Moreover, MetaMask lets you connect to popular dApps like Uniswap, the leading DEX, and exciting games and metaverse projects like Axie Infinity or Decentraland. Whether you’re an experienced trader or a curious newcomer, MetaMask got you covered with its seamless integration and user-friendly interface.

MetaMask Legacy: A Sneak Peak

In the year 2016, ConsenSys’ brilliant minds birthed an outstanding infrastructural piece of Web 3- MetaMask. The revolutionary wallet initially existed as a desktop browser extension only for Google Chrome and Firefox.

Despite its popularity among crypto enthusiasts, MetaMask lacked an official mobile app for several years, leading to a surge of fraudulent software impersonating the real deal.

The situation worsened when fake MetaMask apps caused chaos on Google’s Chrome Web Store and Google Play platforms.

It came to a head when Google Play mistakenly removed MetaMask’s official beta app, causing quite a commotion. Fortunately, it was promptly rectified, and the app was restored to its proper place on January 1, 2020.

By 2019, MetaMask’s creators had a fantastic idea of releasing mobile app versions for closed beta testing. Soon after, the official public release for iOS and Android arrived in September 2020, much to the fans’ excitement.

MetaMask didn’t stop there; they introduced MetaMask Swaps in October 2020, providing a built-in DEX aggregation service to the desktop extension. This innovative feature was not limited to desktops but made available on mobile devices in March 2021, further establishing its reputation as an innovative Web3 powerhouse.

Source: Dune

As of July 2023, MetaMask Swap users have completed over 7+ million peer-to-peer swaps worth close to US$27.1 billion.

MetaMask stands out in several areas

  • Web3 Functionality: enables users to purchase, trade, and earn rewards on crypto and NFTs without relying on centralized exchanges to store the assets.
  • Cold Storage Conversion: Users can transfer their tokens to hardware wallets, such as Trezor and Ledger, directly from the wallet.
  • Open-Source Code: open-source code makes it easy for developers and users to examine its security.
  • Wide Adoption: MetaMask has become widely popular, and almost all Ethereum-compatible entities support MetaMask.

However, MetaMask falls short too:

  • Limited Selection: only supports limited networks, and excludes even coins such as Bitcoin.
  • Controversies: There are some serious allegations – We’ll cover these later in the article.

MetaMask is an excellent option for those who need mobile or browser-based hot storage of Ethereum-supported assets.

1) Streamlined Setup

MetaMask’s setup process is as easy as slipping on your favorite pair of shoes.

Compatible with Mozilla Firefox, Google Chrome, Microsoft Edge, and Brave, getting started has never been easier. Moreover, you can also install the wallet on your iPhone or Android.

Once installed, you can either

  1. Import an existing crypto wallet
  2. Or create a new one

MetaMask guides you through the setup process with clear instructions for new wallets and asks you to create a strong password for secure access. You’ll also receive a 12-word seed phrase, a secret code that can unlock access to your wallet. Keep this phrase safe and secure, like a cherished heirloom or a treasured family recipe.

Verifying your seed phrase is crucial, so double-check it before moving on.

And a word of caution: be wary of phishing scams posing as MetaMask. The team has made it clear that they do not send verification emails, and anyone claiming to be MetaMask and asking for personal information is not to be trusted.

2) Seamlessly transfer or buy ETH-based assets

MetaMask wallets were designed specifically for the Ethereum network and can hold all tokens built on Ethereum.

Additionally, you can directly add ETH to your MetaMask wallet through a bank transfer or a credit/debit card. This makes buying and transferring Ethereum-based tokens convenient and straightforward.

3) Accessibility to dApps

ConsenSys created MetaMask intending to simplify access to dApps, and they’ve succeeded. The wallet enables users to easily access dApps, games, and NFTs built on Ethereum.

MetaMask’s dApp access is also very convenient. You can purchase ETH with a credit card and spend it directly on dApps, eliminating the need for a separate exchange and reducing the time and cost of transferring ETH to your wallet.

4) Fees and Costs

MetaMask is a free-to-use platform, but certain services may require payment. For instance, there’s a service fee of 0.875% per swap for token swapping, which is used to fund the software’s development, according to MetaMask.

Obviously, blockchain networks that support your cryptocurrency will charge fees that vary depending on market conditions and the asset used.

Besides, MetaMask is also EIP-1559 ready. This Ethereum upgrade has transformed the market mechanisms by replacing the first-price auction with a fixed-price sale, eliminating the need for users to calculate the amount of gas required for their transactions.

The base fee is now included in the subsequent block, so users can add a priority fee or a tip to pay the miner if they want to prioritize transactions.

MetaMask provides a recommended transaction priority based on the type of transaction.

5) Customer Service

MetaMask does not provide live support or phone support to contact their customer service team. The primary way to connect with a MetaMask representative is to visit their support page, where you can begin a conversation by clicking on the appropriate button. You can also send an email to support@metamask.io to get in touch with their customer service team.

MetaMask and NFTs

MetaMask version 10.28 has brought many exciting new features that will delight NFT enthusiasts. The update included a dedicated NFT tab that streamlines the process of viewing and transferring these unique tokens.

Not only does this enhance the overall user experience, but it also levels the playing field with newer wallets and mobile competitors.

Some of the standout features include the ability to transfer ERC-721 NFTs without relying on external platforms or smart contracts. It simplifies the process and eliminates the potential risks of interacting with third-party platforms or unscrupulous scammers.

Additionally, the NFT auto-detection feature displays all ERC-721 and ERC-1155 tokens in the wallet when enabled, making it even easier to manage and view these assets.

Moreover, MetaMask plans to introduce support for ERC-1155 transfers soon, further enhancing the wallet’s utility for NFT enthusiasts. Users can send NFTs directly to a ledger or friends from within the MetaMask browser extension with the update.

This development marks a significant milestone in the wallet’s evolution, positioning it as a top choice for NFT collectors and enthusiasts.

MetaMask Snaps: The Future?

MetaMask is taking a giant leap toward the future of the Web3 economy with its latest innovation, MetaMask Snaps. At a recent event in Tel Aviv, Israel, in Feb. 2023, the product manager of accounts and key management at MetaMask, Alex Jupiter, unveiled the company’s plans to expand beyond its traditional Ethereum-based wallet service.

Alex Jupiter discussed potential blockchain synergies, saying, “MetaMask has historically been an Ethereum wallet. We need to start moving beyond that. The multichain future is very clear.”

Snaps is an innovative system designed to allow developers to extend the capabilities of the MetaMask wallet extension.

Developers can customize a user’s wallet experience with new APIs and multi-blockchain protocol support. This move towards the multichain future is a significant step for MetaMask, and the possibilities for Snaps are endless.

With Snaps, third-party developers can create transaction insights, which will allow for the creation of more secure and transparent transactions.

Moreover, Snaps will run in an isolated environment, allowing developers to modify existing MetaMask functionality using external APIs and adding new APIs to the wallet.

Interestingly, MetaMask has already created a Bitcoin Snap that allows users to interact with its protocol from the wallet.

This proposition is more challenging than integrating Ethereum virtual machine-compatible chains like Polygon. Still, the end result is a highly-interoperable wallet across the broad blockchain-based ecosystem.

Snaps is currently available in the developer version of MetaMask Flask, and the plan is to have it integrated with the main MetaMask by the end of 2023.

MetaMask Buy Crypto: A “Ramp” For Mass Adoption?

MetaMask is revolutionizing how people buy and trade cryptocurrencies with its new “Buy Crypto.” This feature makes it easy for individuals to purchase cryptocurrencies using fiat currency.

With Buy Crypto, users can choose from 90 tokens across eight blockchains, including popular options like Ethereum, BNB, and Dai. The feature is available in nearly 190 countries worldwide and supports a variety of payment methods, including credit and debit cards, PayPal, typical bank transfers, and instant ACH.

Moreover, MetaMask also considers the user’s location and local regulations to provide a customized quote for each purchase. Once the user selects a quote, they will be redirected to a third-party provider’s website to complete the transaction. The funds will be deposited directly into their MetaMask wallet.

The Buy Crypto feature will change the way people enter the crypto market, making buying and trading cryptocurrencies easier and more accessible than ever before.

Besides, MetaMask has also formed alliances with various organizations to aid in welcoming new users to its platform.

For instance, in 2022, MetaMask entered into a partnership with PayPal, which enabled MetaMask users to purchase and transfer Ether through PayPal’s platform.

Moreover, on March 21, 2023, MetaMask announced a fresh integration with cryptocurrency fintech provider MoonPay, which allows Nigerian users to buy crypto using instant bank transfers.

MetaMask and Gaming

MetaMask announced on March 1, 2023, about launching its software development kit (SDK) on the Unity Asset Store.

With the SDK, game developers can link their games to the MetaMask wallet, allowing users to interact with Web3 features within the game itself.

The Unity Asset Store is a decentralized gaming assets platform that endorses third-party gaming solutions to assist users and developers in managing digital assets and setting up smart contracts.

Integrating MetaMask into Unity will enable more user onboarding to Web3 gaming.

In addition, MetaMask, ConsenSys, and Infura have collaborated to create Sidequest, a Web3 early adopter program, which provides a $100,000 grant and mentorship to aid gaming developers in transitioning to Web3.

In 1993, Hal Finney, a software developer, and eventual Bitcoin pioneer, proposed the idea of “crypto trading cards.”

Fast forward 30 years- we now have modern versions of digital cards, and the emergence of the NFT ecosystem has paved the way for the first web3 gaming experiments and franchises.

But what lies ahead for NFT gaming in the next 30 years? Looking at the growth of Unity-based gaming over the past two decades, one can imagine that if NFT games become mainstream in the coming years, MetaMask’s debut in the Unity Asset Store will prove to be a crucial early catalyst in that direction.

How Financially Stable is MetaMask?

ConsenSys AG, valued at over $7 billion as of its last funding round in March 2022, backs MetaMask Wallet. To assess the financial stability of both ConsenSys AG and MetaMask, we can examine the most recent Year in Review report for MetaMask Institutional, the company’s Web3 wallet for organizations.

According to the report, despite the volatility present in the crypto market, 2022 was an exceptional year for MMI.

The report highlights that the total value of assets locked or deployed in MMI increased by approximately 8% week-over-week for the entire year. In contrast, the number of signed organizations increased by 4X.

This data suggests that MetaMask and its parent company ConsenSys AG are financially stable and positioned for continued growth.

Controversies

MetaMask faced criticism in November 2022 when it announced that it would collect user data, including IP addresses and ETH wallet addresses, via its infrastructure provider Infura. In response, ConsenSys, MetaMask’s parent company, explained its privacy policies in December 2022 and promised to delete user data within seven days automatically.

Now, users can choose a different RPC provider instead of Infura, a feature ConsenSys had planned to develop. Users can find these new settings under the Security and Privacy Settings of the MetaMask browser extension.

However, MetaMask warns that any RPC provider will have access to user data, including IP addresses and Ethereum wallets, making it difficult to achieve true privacy even with alternative providers.

While MetaMask has given users more options, some might argue that it’s an illusion of choice since less tech-savvy users may not know how to optimize their privacy settings or select an alternative provider.

In February 2023, a hacker who had breached Namecheap, a web hosting company, targeted MetaMask users in unauthorized emails.

The wallet provider immediately warned users about the phishing attempt, clarifying that it does not collect KYC info and advising users never to enter their wallet seed phrase on a website.

It doesn’t stop there!

Additionally, a recent cybersecurity incident affecting a third-party provider of MetaMask exposed the email addresses of some users to a malicious party.

According to ConsenSys, the incident affected users who submitted a customer support ticket to MetaMask between August 1, 2021, and February 10, 2023, potentially impacting up to 7,000 users.

Moreover, recently, MetaMask found itself clearing up rumors and dealing with security issues in the past few months. In March 2023, scammers posing as MetaMask claimed there would be an airdrop of a “MASK” token, leading the wallet provider to clarify that these rumors were false and potentially harmful.

Additionally, MetaMask was accused of an exploit that allowed attackers to steal 5,000 ETH from various addresses across 11 blockchains.

However, MetaMask has denied these claims, responding to a Twitter thread by Taylor Monahan that claimed the exploit affected long-standing users and MetaMask employees.

Despite these challenges, MetaMask remains committed to promoting decentralization and empowering its users.

Rabby Wallet: An Alternative To Metamask?

Rabby Wallet is a more user-friendly alternative to MetaMask as it automatically detects the blockchain and switches your wallet accordingly- eliminating the need to switch between chains manually.

Additionally, Rabby.io offers a pre-transaction risk scanning feature that alerts you if the smart contract you’re interacting with has been compromised, allowing you to view the estimated change in your account funds before you sign the transaction. This feature helps ensure you don’t get your wallet drained and remain safe from rug-pull websites or shady smart contracts.

Unlike MetaMask, Rabby does not offer significant back-end services, reducing the data compromise risk.

Besides, the source code is open, and SlowMist, a reputed security firm, has audited it. With support for up to 48 blockchains and more coming soon, Rabby Wallet is an excellent option if you frequently switch between multiple chains.

Moreover, Rabby Wallet also has a low data collection policy and does not set any tracking parameters on your wallet or browser.

According to its privacy policy, the wallet does not collect your full IP address, keys, transactions, or personal information from your wallet, ensuring that your transactions remain private and secure from hackers and regulatory authorities.

Overall, Rabby Wallet is a highly secure software wallet with a pre-transaction risk scanning feature and a low data collection policy, making it an excellent alternative to MetaMask.

Conclusion

MetaMask is a top-notch crypto wallet for anyone interested in investing or accessing Ethereum blockchain assets. Its easy-to-use features allow users to connect to dApps and trade crypto without needing an exchange.

Although beginners may find some features confusing, it’s a valuable asset for intermediate to advanced investors.

However, we must remember that the foundation of Web3 is privacy and decentralization. If crypto wallets start collecting user data, they won’t differ much from Web2 companies like Facebook.

Hence, switching RPC providers from Infura or shifting to alternatives like Rabby Wallet is best. Alternatively, you can consider the Solana titan, Phantom, when it releases the multichain support for Ethereum and Polygon.

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