What is MetaMask?
MetaMask is a software cryptocurrency and non-fungible tokens wallet. Through this service, users can interact with the Ethereum blockchain. Therefore, it primarily focuses on allowing users to access their Ethereum wallets through a browser extension or mobile app. Through these services, users can interact with decentralized applications. The software operates under ConsenSys.
ConsenSys is a blockchain software technology company. The company started its operations in 2014 under its founder Joseph Lubin. Initially, ConsenSys was a software foundry to develop decentralized software services and applications. Since its incorporation, the company focuses on allowing users to interact with the Ethereum blockchain.
ConsenSys primarily operates MetaMask, which allows users to store and transfer cryptocurrencies and tokens. Apart from that, it provides access and interaction with decentralized applications on the Ethereum blockchain. The software is free to use on a desktop as a browser extension. On top of that, it also has a mobile app, which users can download without any payments.
Apart from MetaMask, ConsenSys also operates other services, for example, Infura. It is a blockchain node infrastructure service that allows developers and apps to interact with the Ethereum blockchain. This infrastructure also provides a backend to other Ethereum services and applications, including MetaMask. Apart from MetaMask, this service also provides a base for various other applications not associated with ConsenSys.
ConsenSys began its operations in 2014. However, it wasn’t until 2015, when the company developed MetaMask. Initially, the app was only available through a browser extension. Later in 2019, the company introduced its mobile apps, bringing its services to mobile platforms, including iOS and Android. However, it wasn’t until 2020 that these apps became available to the public.
Overall, MetaMask is a crypto wallet that allows users to store and transfer Ethereum or similar tokens. The software provides users with a platform to transact in Ethereum-based cryptos. Currently, it is among the well-known crypto wallets and browser extensions. The app acts as a link to get connected to various blockchain applications. Its ease of use and high accessibility make it a favourite among many users.
How does MetaMask work?
Although it may sound complicated, MetaMask is straightforward to set up and use. It is one of the most user-friendly Ethereum wallet and dapp browsers to use. Users can set up the software in a few minutes in most cases. However, it does require one of the platforms where it is available. As mentioned, these include a Chromium-based browser, including Chrome, Firefox, etc. Similarly, users can access it through the Android or iOS stores.
Once users download the MetaMask extension for their browser, they can access their wallets. The extension will allow users to start using the platform. However, users must register with it first. For that, they will need to click the extension and begin with the “Get Started” option. This button takes them to the next screen. There, they can create their wallet using the “Create a Wallet” button.
The next step is for users to go through some optional processes. On this page, users will get the option to help improve the MetaMask platform. However, this process does not contribute to the software or how users interact with it. Instead, it allows users to send anonymous data to the platform to improve their platform. Users can either consent to it or opt out of it. Even those who agree to it can change the setting later.
Once users go to the next screen, the extension will prompt them to enter a password. This password must meet the platform’s minimum requirements to be secure. Similarly, users have to read and accept the Terms of Use on this screen. Once they do so, they can create an account on the platform. The extension will also provide them with a backup phrase. This phrase can be critical in recovering the account in case users lose it.
On the next screen, users will have to verify their backup phrase. It is the phrase that the extension provided them earlier. Once they do so, they can confirm and move to the upcoming setup. The final page includes an “All Done” button which ends the process. Once users click this button, they will get logged into their MetaMask account. From there, they can use the platform and its features.
The app allows users to access the list of their assets in the “Assets” tab. Similarly, they can view their transaction history in the “Activity” tab. The extension also allows them to send transactions through the “Send” button. Similarly, it provides access to buying Ethereum currency. Apart from these, users can also access other areas, such as “Advanced Options”, etc.
What is the MetaMask business model?
MetaMask uses an e-wallet business model that allows users to store and transfer their currency. This business model is well-known among various companies, for example, Apple, Google, Samsung, etc. However, MetaMask takes a different approach to it. Instead of allowing users to store their money in their e-wallet, it provides access to cryptocurrency.
However, MetaMask also doesn’t provide the feature to make payments to vendors. This feature is available on platforms such as Google, Apple, etc. Instead, MetaMask focuses on allowing the storage and transfer of Ethereum-based cryptocurrencies. In essence, it only provides access to the Ethereum blockchain. Unlike the other platforms, it does not offer other financial services.
Therefore, MetaMask essentially uses a cryptocurrency wallet business model. Through this model, the software stores private or public keys for cryptocurrency transactions. Similarly, it provides several other functionalities. However, its primary service is the storage and transfer of those cryptocurrencies for users. In exchange for these services, MetaMask charges users, which is also how it makes money.
MetaMask serves various users, including individuals and institutional investors. Through both these customer classes, the company makes money for its services. Similarly, MetaMask has its own merchandise, which it sells to make money. However, these sales are unlikely to constitute a large portion of the company’s overall revenues.
How does MetaMask make money?
MetaMask primarily makes money from its browser extension and mobile app. Apart from that, it also charges institutional investors through its MetaMask Institutional service. As mentioned, MetaMask makes money from merchandise sales as well. All these sources allow the software to generate revenues for its company ConsenSys.
Swap fees
The primary source of money for MetaMask is the revenues it generates from swap fees. The platform allows users to compare and swap tokens with MetaMask directly. For this service, the software charges a fee, known as swap fees. MetaMask also ensures that its users can access the most prominent possible selection of tokens, which reduces its prices.
Similarly, the rates can change from one period to another. Therefore, these can result in big swings between order placement and confirmation. MetaMask allows users to set a range and cancel the order if a transaction exceeds that limit. The platform charges a service fee that can fall between 0.3% up to 0.875%, which falls under swap fees.
Institutional services
As mentioned, MetaMask also caters to the needs of institutional investors. The software also makes money from MetaMask Institutional, which is a wallet for financial institutions. This wallet targets trading firms and other related organizations. The institutional wallet offers similar functionality as MetaMask’s primary platform. However, it also provides to qualified custodians while ensuring compliance with tax laws.
Merchandise sales
MetaMask also has its own brand of merchandise, which it sells through its online store. Users can purchase a variety of products, for example, t-shirts, caps, mugs, hoodies, etc. Through these sales, the company makes money. This merchandise also increases the company’s brand value and exposes it to new users. However, the sale proceeds from those items are unlikely to contribute significantly to the company’s revenues.
Conclusion
MetaMask is an online platform that serves as a cryptocurrency wallet. The software operates under ConsenSys, which started its operations in 2014. However, the company only introduced the MetaMask platform in 2015. The MetaMask business model is that of an e-wallet or cryptocurrency wallet model. The platform makes money from several sources, some of which are available above.
