Seven Years in the Making: The Rise of a Web3 Infrastructure Giant
Since its inception in 2018, WalletConnect has become the most widely adopted interoperability protocol in the crypto ecosystem. With over 275 million wallet-to-DApp connections completed, it powers seamless interactions across more than 600 wallets and 61,000 decentralized applications. This near-ubiquitous adoption—reaching over 90% market penetration—has cemented WalletConnect as the de facto “connectivity layer” of Web3.
On April 15, 2025, the long-awaited WCT token officially launched, debuting on major exchanges including Binance, OKX, and Bybit. Despite years of organic growth and foundational infrastructure development, the market’s initial reaction was cautious. According to data from crypto researcher @AB Kuai.Dong, WCT had previously raised funds across four rounds, with the final three at a consistent $0.20 per token.
At launch, WCT opened with a circulating market cap of $53 million** and a **fully diluted valuation (FDV) of $288 million, marking just a 1.5x return from its private sale price. This modest appreciation reflects broader market skepticism toward infrastructure-based tokens—even those underpinning critical Web3 services.
Technically, WCT is built on the Optimism OP mainnet, leveraging relay servers to enable secure, encrypted cross-chain communication. Its innovative “Connection-as-a-Service” model introduces a monetization framework for what was once a free public good. By charging based on monthly active users (MAU), WalletConnect aims to transform its protocol into a sustainable tokenized economy.
However, financials reveal a valuation gap: WalletConnect currently generates only $2 million in annual revenue, implying a staggering 60x price-to-sales (P/S) ratio—far exceeding peers like MetaMask. This disconnect raises questions about whether the token’s current pricing aligns with its real-world utility.
Tokenomics: A Double-Edged Sword
The WCT token has a total supply of 1 billion tokens, distributed as follows:
- 27% to the foundation for ecosystem development
- 18.5% allocated to community incentives and airdrops
- 30% reserved for team and early supporters
This structure balances decentralization with long-term growth but introduces several risks that have influenced early market sentiment.
Circulating Supply Pressure
Only 18.62% (186.2 million tokens) entered circulation at launch. Of this:
- 44% came from Binance Launchpool mining rewards
- 32% is held by early institutional investors like Coinbase
Compared to similar projects such as RedStone (28% initial circulation) or Berachain (21.5%), WCT’s lower float might seem favorable. But combined with break-even exits at just 2x returns, this creates concentrated selling pressure from early backers eager to lock in gains.
Utility Lag and Value Capture Delay
Currently, only two of WCT’s four core utilities are active: trading and staking. Critical functions like fee payments and reward distribution require future governance votes to activate. Meanwhile, the 17.5% rewards pool will be released gradually over several years.
This "launch-first, build-later" approach leaves WCT vulnerable to accusations of being an "air token"—one lacking immediate economic use cases beyond speculation.
Market Makers: Stability or Volatility?
High-frequency trading firms GSR Markets and Flow Traders control 8% of the initial circulating supply (7.5 million tokens). While they provide essential liquidity, their algorithmic strategies can amplify volatility. For instance, a 15% price swing on OKX shortly after listing was traced back to routine transfer testing by these market makers—highlighting how centralized control can inadvertently destabilize price action.
The Wallet Ecosystem Valuation Puzzle
WCT sits at the intersection of two valuation frameworks:
- As a wallet-layer protocol, it competes with tokens like SFP (SafePal, $120M market cap) and TWT (Trust Wallet, $350M).
- As an infrastructure project, it’s compared to giants like Chainlink (LINK) and The Graph (GRT).
WalletConnect’s strength lies in its network effects: each new wallet integration unlocks exponential connection possibilities—600 wallets × 61,000 apps = 366 million potential pairings. This Metcalfe-effect potential suggests room for higher valuation.
Yet reality tempers optimism: over 90% of current connections are free, and less than 5% contribute to revenue generation.
Competitive Landscape
| Project | Focus Area | Key Limitation |
|---|---|---|
| MetaMask | Browser extension + Snaps | No native token |
| Rainbow | NFT & social experience | DAU ~1/10 of WalletConnect |
| Phantom | Solana-focused wallet | Weak cross-chain support |
WCT’s strategic edge lies in converting technical dominance into economic value. Its proposed "tiered connection fee" model would charge high-frequency apps—such as exchanges and blockchain games—between 0.1 to 0.3 WCT per MAU. If implemented successfully in Q3 2025, this could generate up to $30 million annually, bringing its FDV/revenue ratio down to a sustainable 10x multiple.
Why the Market Is Hesitant: Structural Challenges
Despite strong fundamentals, WCT faced lukewarm reception at launch—a symptom of deeper structural issues in today’s crypto climate.
High FDV at Launch
In Q2 2025’s bearish altcoin environment, investor tolerance for high FDVs is near zero. Recent projects averaged an 18.5% circulating-to-FDV ratio—WCT hit 18.62%, right at the psychological threshold.
Staking Trap
WCT offers an eye-catching 85% APY staking reward, but half comes from inflationary emissions. This creates a "mine-sell-stake-loop": users stake to protect principal, increasing short-term supply lockup but fueling long-term inflation fears—a classic death spiral for token economics.
Governance Without Power
Current governance proposals focus solely on technical upgrades. There are no mechanisms for buybacks, burns, or revenue-sharing, rendering voting largely symbolic. With less than 5% community participation, WCT risks becoming a speculative asset rather than a tool for decentralized decision-making.
Airdrop Backlash
Only 15 million out of 185 million airdropped tokens were claimed in the first quarter. The remainder rolls into future incentive pools—a design meant to encourage sustained engagement but perceived by traders as "hidden sell pressure."
FAQ: Your Questions About WCT Answered
What is the primary use case of the WCT token?
WCT serves four key functions: governance, staking, fee payment within the WalletConnect ecosystem, and rewards distribution. While only staking and trading are live today, fee usage depends on upcoming governance decisions.
Is WCT undervalued compared to competitors?
On revenue multiples alone, WCT appears overvalued (60x P/S). However, if its monetization plan succeeds and adoption grows, its FDV could be justified by network scale and user base—potentially placing it in undervalued territory relative to its long-term potential.
How does WalletConnect make money?
WalletConnect generates revenue through its “Connection-as-a-Service” model, charging apps based on monthly active users (MAU). Currently earning $2M annually, it plans to expand this through tiered pricing for high-volume integrators.
Can WCT recover from weak initial momentum?
Yes—if it delivers on three key milestones by late 2025:
- Over 30% of revenue derived from WCT-denominated fees
- Real staking yield (post-inflation) turns positive
- Integration with major Web2 platforms
Achieving these would fundamentally reprice the token.
Why did early investors not sell more aggressively?
Many early backers broke even or achieved modest gains (1.5–2x), which in today’s risk-off market is often sufficient for partial profit-taking. However, large institutional holdings suggest coordinated exit strategies may unfold over time.
What differentiates WalletConnect from other wallet connectors?
Its universal compatibility across chains and apps, open-source nature, and massive integration footprint give it unmatched reach. No other protocol offers such broad cross-platform connectivity without vendor lock-in.
Final Thoughts: Can Infrastructure Be Tokenized?
The rocky start of WCT underscores a fundamental challenge in crypto: how to tokenize essential infrastructure without creating speculative bubbles or utility gaps.
Historically, only a few projects—like Chainlink—have crossed the "valley of death" by tightly binding token utility to core protocol function (e.g., data staking). For WCT, success hinges on evolving from a mere "connection tool" into a true "value gateway"—where every interaction routes economic value through the token itself.
At $0.29, WCT may be pricing in both bear-market pessimism and legitimate concerns about delayed utility. But if it executes on its roadmap—especially around monetization and real yield—it could represent one of 2025’s most compelling infrastructure plays.
The path forward isn’t guaranteed—but for those who believe Web3 needs economic plumbing as much as flashy apps, WCT might just be worth watching closely.