Research Summary
This report discusses the future of Decentralized Finance (DeFi) onboarding, focusing on the introduction of Rainmaker, a new class of crypto wallets. Rainmaker aims to simplify the complexity of DeFi, which currently hinders the majority of everyday users. The wallet leverages Account Abstraction to bring more users on-chain with their mobile-first wallet, offering features such as one-click strategies, gasless transactions, multi-party keyshare & key recovery, and instant on/off-ramping.
Key Takeaways
DeFi’s Complexity
- Barrier to Adoption: The report highlights the complexity of DeFi as a significant barrier to its adoption by everyday users. The process of onboarding is currently too complicated for the average person.
- Need for Simplification: To onboard the next billion people to the blockchain, the report suggests that these complicated hurdles need to be abstracted away.
- Role of Rainmaker: Rainmaker is introduced as a solution to this problem, aiming to simplify DeFi onboarding through its mobile-first wallet.
Rainmaker’s Features
- One-Click Strategies: Rainmaker offers one-click strategies, allowing users to Swap/Bridge/Stake/Farm/Compound in a single click via bundling, eliminating the need for endless wallet confirmations.
- Gasless Transactions: The wallet enables gasless transactions, with apps sponsoring transactions to encourage activity, making interactions free for users.
- Multi-Party Keyshare & Key Recovery: Rainmaker provides full self-custody, allowing users to log in with an email/password and 2FA, and recover their keys without needing to trust third parties.
- Instant On/Off-Ramping: The wallet offers instant on/off-ramping, eliminating the need to wait days to move funds on/off a centralized exchange.
Account Abstraction
- Concept: Account Abstraction (ERC-4337) is a strategy where users own a smart contract that owns the wallet, instead of directly owning the wallet. This allows for new use cases that were previously impossible to accomplish in a permissionless manner.
- Benefits: Account Abstraction allows for complex tasks to be accomplished with a single confirmation through the use of “User Operations,” which bundle several operations. This is similar to how rollups like Optimism and Arbitrum bundle a group of transactions together to save on mainnet costs.
- Atomic Operations: User Operations are atomic, meaning if there is any issue encountered along the path to complete the Operation, it is reverted, ensuring users aren’t left holding some intermediary token or some unstaked LP position.
Actionable Insights
- Explore Rainmaker: Given its potential to simplify DeFi onboarding, stakeholders in the crypto and DeFi space should explore Rainmaker and its features.
- Consider Account Abstraction: The concept of Account Abstraction, as leveraged by Rainmaker, could be a significant development in improving the user experience in crypto. Stakeholders should consider its implications and potential applications.
- Focus on User Experience: The report underscores the importance of user experience in driving adoption of DeFi. Stakeholders should focus on simplifying and improving the user experience in their offerings.
