What is Phantom?

For cryptocurrency users, blockchain wallets are crucial in their crypto journey.

With the expansion of the crypto market in recent years, we have seen various types of wallet products emerge.

What is Phantom?

Phantom is a non-custodial browser extension and crypto wallet that provides a simple and secure way of interacting with numerous blockchain networks in the Solana ecosystem.

(Source: phantom.app)

Emerging during the thriving period of the Solana ecosystem, Phantom’s extension is user-friendly, allowing users to send and receive cryptocurrencies easily, collect NFTs, and trade cryptocurrencies directly within the wallet.

Additionally, Phantom is compatible with any operating system that supports browsers. This means that Phantom is compatible with Windows, MacOS, and any Linux distribution.

In the early stages of the multi-chain ecosystem, each blockchain network had its own dedicated wallet application. However, with the development of the market and industry, wallet applications that support multiple blockchains emerged one after another. Phantom has also added support for various different blockchain networks in its updated versions.

Recently, Phantom announced its deployment on Ethereum and Polygon, making it fully compatible with applications on Ethereum, Polygon, and the entire Solana ecosystem.

Phantom initially launched its mainnet in 2020, but it didn’t gain much attention from the majority of cryptocurrency users at the time. During its subsequent development, this project mainly focused on user attraction and project promotion.

In Q1 2022, Phantom announced that it secured $109 million in Series B funding from leading venture capital firms. This was made possible by Phantom’s large user base, which had surpassed 1 million users.

Within a year, Phantom demonstrated remarkable growth. Achieving such significant growth from scratch can be attributed to the exceptional quality of the product and the overall strength of the project team.

Before founding Phantom, Chris Kalani, the Chief Product Officer, successfully raised funds for the design startup Wake, which was later acquired by InVision.

In the crypto space, many projects often leave users with an indescribable impression as they prioritize conceptual output over comprehensive business logic. This is a major reason why many cryptocurrency projects eventually fail.

However, the founding team of Phantom holds a different proposition on this matter. While recognizing the potential of cryptocurrencies, the team members are inherently pragmatic and strive to drive the project’s success by establishing robust business operations.

What is even more commendable is that the Phantom team effectively combines this strategic awareness with their professional expertise. The core members of the team previously worked together at 0x, a company that focused on decentralized exchanges in the early days of the industry.

(Source: prnewswire.com)

During their time at 0x, the founding team realized the need for an improved blockchain wallet to support their product development. At that time, the options for blockchain wallet applications were limited. After deciding to connect to MetaMask to support their product, the team found that their product, Matcha, couldn’t deliver the desired user experience.

This was the problem that Chris Kalani and his partners recognized. There were no wallet applications in the market at that time that offered a truly superior user experience. In fact, before the emergence of Phantom in 2021, several wallet startups had entered the crypto market with the aim of simplifying the new user onboarding process and challenging the dominant wallet application, MetaMask.

However, very few of these startup projects achieved true success, and wallet applications became one of the most fiercely competitive sectors in the industry. Even with reliable product functionality, these startups struggled to expand their user base on a large scale. This prompted many projects to seek ways to differentiate their services.

This is the environment and situation that Phantom faced when entering the wallet application track, which required the team to consider its product design carefully.

As demonstrated by Phantom’s subsequent market performance, product competitiveness has proven to be one of its core strengths. The wallet application offers an aesthetically pleasing and intuitive user experience, making it highly user-friendly. Its strong security and privacy features have also positioned Phantom as a leader in the competitive landscape.

Furthermore, in its early design phase, Phantom focused more on developing web extensions instead of mobile apps and has thus avoided potential pitfalls.

While mobile apps can provide a more comprehensive user experience, the team recognized that the development of wallet applications is still in its early stages and more on-chain transactions are taking place on web clients. Moreover, the slow transaction speed and high cost of the Ethereum network made desktop environments a more suitable choice.

However, it was widely believed at the time that MetaMask had almost monopolized the web-based wallet application space, leading many project teams to turn to develop app-based wallet applications.

In the early stages, the Phantom project primarily focused on web-based applications to avoid the highly competitive and unsuitable market environment for app-based wallet applications. This approach allowed the project to achieve initial expansion.

However, with the growing popularity of high-speed blockchain networks like Solana and the expansion of web3 to include NFTs and other consumer-centric apps, the market environment began to change. In response to these changes, Phantom made a timely move by launching its app version, which is another strategic adaptation to meet the evolving market demands just as its decision to prioritize the development of web-based platforms in the early stages.

Key Features of Phantom

The Phantom wallet enjoys the following features:

1. Security: The Phantom wallet implements multiple security measures to protect users’ cryptocurrencies. This includes features such as backup and recovery options, wallet password protection, and two-factor authentication.
2. User-friendly interface: The Phantom wallet offers an intuitive user interface that allows users to easily manage their cryptocurrencies without requiring extensive technical knowledge.
3. Multi-cryptocurrency support: The Phantom wallet supports various cryptocurrencies such as BTC, ETH, Polkadot, and more, enabling users to manage different types of cryptocurrencies within a single wallet conveniently.
4. Cross-platform compatibility: The Phantom wallet offers multiple client applications, including desktop applications, browser extensions, and mobile apps.
5. Community support: The Phantom wallet has a thriving community where users can share experiences, seek assistance, and participate in development activities.

Phantom’s Performance on Solana

In its early stages, Phantom aimed not only to become the largest wallet application within the Solana ecosystem but also to establish itself as a prominent player in the broader crypto industry.

As the project expanded, Phantom strategically increased its support for Ethereum and Polygon, a move that significantly expanded its market size and competitiveness.

Although Solana was already a major ecosystem in the industry at the time, Ethereum remained much larger, especially after Ethereum’s upgrade in 2023, which further expanded the overall market size. This broadened the application prospects for Phantom.

However, within the Solana ecosystem itself, Phantom’s performance was not the most outstanding. Although Ethereum has been working to expand its market size for years, Solana is also making an impressive performance with rapid growth.

Solana even outperformed Ethereum regarding daily transaction volume and demonstrated high throughput in its wallet applications. However, with Ethereum’s continuous development and upgrades, Phantom faces new challenges and opportunities. In the future, Phantom is potentially to engage in even fiercer competition with other mainstream wallet applications.

Having seen the negative impact of the FTX collapse on the Solana ecosystem, it is obvious to see the increased need for Phantom to shift its focus towards Ethereum.

Further Development of Phantom

Since its beta launch in March 2021, Phantom has amassed a user base of over 200,000 users by the time of its full release in July. In the following months, Phantom consistently attracted tens of thousands of new users weekly, with occasional surges exceeding 100,000.

During this period, one significant catalyst was the mint of the Degenerate Ape Academy. This project garnered substantial attention at the time and attracted many users to the Solana ecosystem, which consequently drives the widespread adoption of Phantom.

(Source: twitter.com)

However, solely relying on that wouldn’t have been enough for Phantom to become a widely recognized wallet application among cryptocurrency users. In its early stages of development, the expansion of the Solana ecosystem played a crucial role in driving its growth.

In addition to the previously mentioned Degenerate Ape Academy project, the Solana ecosystem experienced explosive growth in 2021. It integrated various types of tokens, DeFi, and NFTs, as well as high-quality projects such as aggregators and decentralized exchanges.

As users actively participated in these projects, the Phantom wallet emerged as the preferred choice within the ecosystem, gaining significant popularity.

Furthermore, with the subsequent support from Ethereum and Polygon blockchains, Phantom was able further to expand its user base through web and app interfaces, resulting in sustained business growth for the platform.

Phantom adopts a systematic approach to drive product optimization and user expansion. It focuses on enhancing user experience and ensuring payment security to create a comprehensive product offering.

Conclusion

In summary, the Phantom wallet is widely praised for its sleek and user-friendly design, as well as the strong security and seamless trading experience it provided. Compared to other wallet applications, the Phantom wallet stands out for its fast, convenient, and secure cryptocurrency storage and transaction capabilities. Furthermore, Phantom supports a wide variety of cryptocurrencies to meet the diverse needs of users.