JuCoin Labs Investment Research Report: Panoramic Analysis of WalletConnect's Investment Logic

The following content is released by JuCoin Labs Research Institute: I. Project Overview WalletConnect is an open-source Web3 communication protocol dedicated to connecting users' wallets with decentralized applications (dApps), providing a unified, encrypted, and secure communication layer for the Web3 world. Currently, WalletConnect is evolving from a "connection protocol" to a "Web3 communication infrastructure", offering services including push notifications, message relay, session management, and becoming the default intermediary layer between wallets and applications. WalletConnect aims to solve the long-standing industry pain of "user entry fragmentation" in Web3 by providing a unified connection layer, reducing developers' multi-chain adaptation costs. DApiapps only need to integrate the WalletConnect SDK to access over 600 different wallets, covering mainstream public chains like Ethereum, Solana, and Cosmos, enabling a "one-time integration, universal across chains" mode.

• Monthly Active Wallets: Over 5.2 million wallets connected through WalletConnect in March 2025, representing a 95% year-on-year increase from 2.6 million in March 2024.
• Cumulative Connections: As of March 2025, the WalletConnect network has processed over 256 million connections.
• Total Independent Wallets: By March 2025, over 40.7 million independent wallets have used WalletConnect for connections.
• Total Application Projects: The number of applications using the WalletConnect network continues to grow, reaching 58,900.
• On-chain Data: Currently, there are 123,917 token holders for $WCT, with holdings relatively concentrated, with the top three addresses holding 16.32%, 11.26%, and 10% respectively.

Data Source: walletconnect ecosystemVI. Ecosystem WalletConnect has integrated over 58,000 dApps and mainstream wallets, building a communication network spanning asset trading, social, and governance scenarios. Its ecosystem covers wallets, DeFi, Non-Fungible Tokens, social communication, and other sectors. This article lists representative projects in key sectors: 1. Wallet Applications

• MetaMask: The mainstream Ethereum wallet that enables dApp and mobile wallet connections through WalletConnect. Recently exploring WalletConnect Push integration to enhance user notification experience.
• Trust Wallet: A multi-chain wallet supported by Binance, fully integrated with WalletConnect, covering mobile user scenarios, and participating in v2 protocol upgrades.
• Rainbow Wallet: A UX-focused wallet application actively participating in WalletConnect Chat testing, attempting to introduce social functions to expand wallet boundaries.

2. DeFi Protocols

• Uniswap: A mainstream DEX supporting WalletConnect multi-wallet access to improve trading convenience and tracking chat and notification module developments.
• Zapper: A DeFi investment aggregation platform deeply integrated with WalletConnect connection and authorization mechanisms, promoting asset viewing and investment strategy integration.
• Zerion: A Web3 financial platform participating in WalletConnect Chat testing, exploring full-chain optimization from asset viewing to on-chain interaction.

3. Non-Fungible Token and Content Platforms

• OpenSea: A top Non-Fungible Token market supporting quick mobile wallet connections through WalletConnect, strengthening cross-device on-chain interaction.
• Foundation: A creator-friendly Non-Fungible Token market integrating WalletConnect for signature and login processes, supporting content creators' asset on-chain processes.
• Showtime: A Non-Fungible Token social platform leveraging WalletConnect to promote Non-Fungible Token display and identity binding functions.

4. On-chain Social and Communication Protocols

• Push Protocol: An on-chain message protocol collaborating with WalletConnect to advance standardized push mechanisms and optimize dApp notification experiences.
• Lenster: A Web3 social platform planning to integrate WalletConnect Chat to support on-chain dialogue and identity verification.
• Convo Space: A decentralized comment and chat system supporting WalletConnect login and attempting to access push services to expand real-time interaction capabilities.

Data Source: walletconnect.networkVII. Risk Analysis WalletConnect has recently been listed on top centralized exchanges including Binance, Upbit, OKX, and Coinbase (launched perpetual contracts). Based on the current situation, WalletConnect faces the following risk points:

• Staking rewards are highly dependent on inflationary release, forming an incentive internal circulation risk. Currently, the $WCT staking annual yield is as high as 85%, with over 50% coming from token inflation. According to Dune data, there are currently 40,633 stakers, with over 100 million $WCT tokens staked. It's important to note that this mechanism attracts users to lock positions while essentially forming a "mine, withdraw, sell" closed loop. Users are passively participating in staking to maintain returns, which may exacerbate token liquidity deterioration and subsequent selling pressure, potentially triggering a token value "death spiral".

Data Source: Dune

• Governance function is lacking, and the token lacks value support. Although $WCT is positioned as a governance token, current community governance proposals mainly focus on protocol upgrades and parameter configurations, lacking direct mechanisms to enhance token value such as token buyback and burning.
• Airdrop release rhythm is unbalanced, and incentive design inadvertently becomes a market selling pressure signal. WalletConnect's first round of airdrop totaled 185 million tokens, but the actual claiming rate is less than 8%, with unclaimed portions returning to the incentive pool for future distribution. Although the original intention was to provide long-term incentives for ecosystem users, it has been interpreted by some investors as a "potential selling pressure reserve", creating a psychological price ceiling effect that suppresses medium and long-term market confidence.

VIII. Valuation Analysis Currently, WalletConnect primarily focuses on the wallet track, so this article will conduct a horizontal comparison with Trust Wallet and SafePal for further valuation analysis. Currently, WalletConnect's market performance shows a market cap of $69.04 million, with a fully diluted valuation of approximately $370 million. The main competitors, Trust Wallet and SafePal, perform as follows:

• TrustWallet: Market cap is $317 million, FDV is approximately $760 million, and its main business is providing multi-chain support and wallet management functions.
• SafePal: Market cap is $232 million, FDV is approximately $232 million, primarily focusing on hardware wallets. Although it provides multi-chain support, its ecosystem extensibility and protocol-level influence are weaker compared to WalletConnect.

According to CoinMarketCap, the current market cap of $WCT may be underestimated. Based on market position, protocol growth, and gradual token function activation, WalletConnect's reasonable market cap range is $200 million to $300 million. Therefore, this article believes that if WalletConnect can address current token utility issues, $WCT may have a 3-5x appreciation potential as its ecosystem develops. Ninth, Conclusion: WalletConnect protocol has evolved from an initial wallet connection tool to a key role in Web3 communication infrastructure. In terms of user volume, protocol maturity, and ecosystem coverage, it is at the industry's leading edge and has gradually become the "default entry point for information flow" in the Web3 world. From a secondary market perspective, $WCT has initially built multiple value channels for governance, incentives, and functional access, and has gained high market attention after listing on top exchanges like Binance and OKX. The current FDV is approximately $380 million, which is in an undervalued range. However, investors still need to pay attention to potential risks such as its staking rewards inflation structure and token utility, especially before establishing a clear commercial revenue model and token buyback mechanism. $WCT's value capture is more expectation-driven rather than based on actual earnings. Overall, $WCT represents a typical strong protocol and initial token with infrastructure attributes that can withstand market cycles, suitable for medium-term allocation.