A Billion Valuation for Wallet Tokens, Seriously?

5 min readDec 19, 2022
  • Capital flight to non-custodial wallet pumped wallet tokens prices, but wallet tokens generally lack real value accrual;
  • Tokens are not a necessity for the business, but they can be a fantastic tool for incentives and building loyal customers;
  • Crypto wallet has true product-market fit (PMF) and is a profitable business. This is far better than a lot of other crypto projects with fake PMF. If managed well, the high valuation of wallet tokens is not so unreasonable.

The recent fall of centralized entities reminds everyone in the industry, “not your keys, not your coins.” Capital and users flight to non-custodial wallets, triggering a surge of crypto wallet usage and hardware wallet sales as well as price pumping for wallet tokens. Trust Wallet Token has FDV over $2.0 billion! What are wallet tokens, what function do they serve, and are they really worth hundreds of millions or even billions valuation?

Wallet Tokens and Functions

There are hundreds of non-custodial wallets in the market, Walletconnect, a service connecting various wallets, advertises it integrated with over 170 wallets. Some wallet providers dedicate only to wallet solutions such as Trust wallet and SafePal, while others are part of a comprehensive product package. For example, Coin98, an all-in-one DeFi platform providing wallet and other DeFi applications such as AMM, and its token $C98 is also used for liquidity mining for AMM pools. This article only focuses on dedicated wallet providers with their own tokens solely used in the wallet ecosystem.

By this criteria, the top 2 wallet tokens with FDV over $100 million are Trust Wallet and SafePal. Although there are other wallets token, they have rather small market caps and little trading volumes (e.g. $MATH and $TPT ), the case of Trust Wallet and SafePal can give a good representative for wallet tokens.

Trust Wallet

Trust Wallet is a non-custodial multi-crypto wallet app and browser extension. The wallet was acquired by Binance in 2018. Trust Wallet integrates staking and dApps functions within the wallets so that users can directly stake or interact with selected dApps without the need to go to separate websites. (Related Reading: Trust Wallet Rating Update)

Trust Wallet’s token $TWT is a utility and governance token. The main utility is to incentive users such as $TWT holders to be entitled to discounts on in-app purchases and DEX services. The token also allows holders to participate in decision-making processes, including adding new tokens, features, and blockchain support.

An example of governance voting is deciding which new chain to support.

Source: Trust Wallet Governance

While $TWT currently has an FDV over $2 billion, the token was minted and distributed for free initially. The team stated that the token price entirely depends on the users who trade them to decide its inherent value.


SafePal provides both dApps wallet/browser extension as well as hardware wallet, the wallet support 45 different blockchains.

$SPF, the token of SafePal is a utility and governance token similar to that of Trust Wallet. Usage includes users can use $SFP for fees and discounts on the SafePal products and services. Token holders can also vote for treasury fund usage and decide on adding new blockchain support.

Do Wallets Need a Token?

The primary function of the wallet tokens is to act as incentives for users to use their products and participate in governance. In a sense, the logic behind wallet tokens is rather similar to exchange tokens.

Non-custodial wallet is a competitive market, there is not so much difference between different wallets, and it is hard to build a moat other than brand recognition. Wallet tokens are minted to provide users incentives, just like exchange tokens provide trading fee discounts and rebates to token holders. Free airdrop of wallet tokens can attract new wallet users, and holding wallet tokens to enjoy a variety of benefits can improve user retention.

The governance right given out to token holders are minimal, and there is also no revenue-sharing mechanism. This makes wallet tokens a fantastic deal for wallet providers, they normally hold a large percentage of these tokens. For Trust Wallet, 15% of the total supply was allocated to the team, and in the case of SafePal, tokens allocated to the team and product & market combined accounted for 35%. This wealth is created by just introducing utility to token holders without giving out any meaningful governance rights.

Tokens Fund Marketing Expenses and Holders Fund Tokens

Tokens holders get discounts on services and products, these are marketing expenses for the wallet providers, and market expenses are real cash outflow that must be funded by some means, usually from business income. Tokens act as a new source of wealth that can be tapped into, and token’s value is priced by the market through holders’ trading. In a sense, token holders fund these marketing expenses, and if the wallet successfully attracts a more significant customer base, the rising token price gives back value to token holders.

However, for this process to work, the product itself has to have real use cases, solve some real problems, and can be profitable with or without the token. Wallet perfectly belongs to this category.

Wallet Tokens Could Worth Billion-Dollars Valuation, but Not in Current Design

The $2 billion FDV of $TWT is, without a doubt, a result of hype and speculation. With that being said, wallets are the most critical application in crypto, they are the entry point of web 3. A successful wallet can capture immense value in many different ways. Trust Wallet is supported by Binance and promoted directly by CZ. If Binance customers can be converted to Trust Wallet customers and actual value can be shared with token holders, then the $2 billion valuation will look more reasonable. Before those happen, they are just a new kind of meme.




Leading Data&Tech-driven Blockchain Financial Institution.