Main featured post image
Why the pricing model for web3 wallet providers is broken

Part of what makes the web3 space so dynamic is the incredible pace of innovation. It’s why dozens of companies now offer wallet creation, including well-known places like Privy, Dynamic, Capsule, Magic, and Web3Auth, each fueling a multitude of use cases. And while every wallet provider attempts to carve out their niche, we also are starting to see where commonalities lie — like with pricing models.

Every company seems to follow a similar structure now when it comes to pricing, which in effect has created a status quo. But whether it’s due to groupthink, putting business value ahead of customer and user experience, or just prioritizing other products — the truth is that the way most providers charge for wallets today just doesn’t make sense.

Most web3 wallet providers charge based on monthly active users (MAUs), or wallets with "activity," loosely defined as users who sign up, sign in, and maybe send a transaction. But this fails to align with the true value that businesses derive from an engaged user base. Below, we’ll discuss this common pricing model, the hidden costs providers often offload to businesses, and why we’ve chosen a different route at Bastion.

The current landscape: Misaligned incentives and hidden costs

When wallet providers choose a model based on either MAUs or wallets with a broad definition of what constitutes activity, businesses and their end users become an afterthought. Pricing this way fails to ask about the real use cases at hand: If someone simply signs up or logs in once a month, is that providing much value to the business? True engagement is demonstrated by users actively interacting with the platform, sending transactions, and utilizing the features that drive revenue and growth back to a company’s bottom line.

Moreover, this pricing model doesn’t account for key elements that businesses can and should expect from their wallet providers. Too often, hidden costs inevitably surface as businesses scale and regulations evolve — and those costs fall to the businesses, not the wallet providers. And because many providers currently forego a number of these business-critical cost centers, this artificially deflates their prices. But in essence, they’re passing the buck and the risk to the customer.

Most wallet providers put the cost and risk on businesses for the following:

  • Customer support: As businesses scale, the need for responsive, knowledgeable customer support grows. Providing high-quality support is essential for retaining users and maintaining a positive reputation, and that requires good relationships and support from third-party providers, which often under-invest in support or real partnerships with the businesses they work with. 
  • AML and sanctions compliance: Anti-money laundering (AML) and sanctions compliance regulations are becoming increasingly stringent. The law requires businesses to detect, prevent, and report illegal activity on their platform. To do so they will need to implement robust AML controls, but these are expensive and time-consuming.
  • Third-party authentication support: Integrating with third-party authentication providers, such as social login or enterprise identity management systems, is essential to reduce friction and improve security. However, these integrations can be complex and costly to maintain.
  • KYC processes: Know Your Customer (KYC) requirements are essential for preventing fraud and ensuring compliance. Implementing effective KYC processes, including identity verification and ongoing monitoring, involves significant hidden costs.
  • RPC node provider: Businesses rely on RPC node providers for blockchain interactions. Managing RPC nodes involves significant costs and risks related to reliability, scalability, security, vendor lock-in for some features, and beyond. Businesses often bear the burden of ensuring their RPC node setup or provider is robust and high-performing with costs that can quickly add up.

And in the EU, the story is even more complex. The Markets in Crypto-Assets Regulation, or MiCA, will enforce Travel Rule-like requirements even further — which are already mandatory for central exchanges, fiat on/off ramps, and other Virtual Asset Service Providers (VASPs) processing funds.

Wallet providers that don't offer built-in compliance solutions leave their customers exposed to significant regulatory risk — and that can meaningfully impact their bottom lines. Regulators have taken examples of FTX and Binance seriously, exchanges like LocalBitcoins have been frozen or shut down, and increased scrutiny around compliance is setting new industry-wide standards and expectations.

How Bastion aligns incentives for long-term success

We believe the pricing model for web3 wallets is long overdue for a shake-up. That's why we've introduced a flexible, scalable pricing structure that aligns our incentives with our customers' success.

With Bastion, businesses can create as many wallets as they need for free and only pay for engaged users. We don't charge for vanity metrics like MAUs or wallets. Instead, we define an engaged user as one who actively sends transactions and interacts with the platform in meaningful ways. This model ensures that our customers only pay for true value-add, rather than subsidizing inactive users. It also incentivizes us to continually innovate and provide features that drive real engagement and growth.

We designed our pricing this way to enable business. Our customers can create hundreds of millions of wallets for users, partners, testing, and more — without worrying about the cost. Businesses only pay for the resources they actually use and derive business value from, including meaningful activity like sending blockchain transactions to create thriving marketplace activity, unlocking token-gated experiences to engage the most loyal fans, or exporting keys to self-custody to allow for user portability.

And lastly, when it comes to hidden costs, we’ve approached things from a fundamentally different vantage point. Bastion's platform is built from the ground up with compliance in mind. We offer built-in sanctions screening, KYC/AML, and other compliance features, ensuring our customers are always on the right side of regulations. Rather than surprising our customers with hidden costs down the line, we bake these essential features into our platform from day one.

Ultimately, our pricing model boils down to one idea: We only win when our customers win.

The future of web3 wallets: Value-aligned pricing

As the web3 ecosystem continues to mature, it's clear that the pricing models of the past are no longer fit for their purpose. Businesses need wallet providers that align incentives, provide thoughtful pricing, and offer robust compliance solutions out of the box.

Bastion is leading the charge in this new era of web3 wallets. By offering a flexible, scalable pricing model that charges only for true engagement, we're helping businesses build sustainable, compliant web3 applications — without hidden costs or regulatory risks. And if this kind of model could support your business, we’d love to chat.