How Does Trust Wallet Make Money? Business Model of Trust Wallet


How Does Trust Wallet Make Money

Trust Wallet is a popular crypto exchange and decentralized finance app. It doesn’t charge users any convenience fees on top of the blockchain network fee.

Trust Wallet primarily makes money via affiliate revenue. It also makes money through Trust Wallet Tokens, data, and integrated services. However, Trust Wallet has never publicly stated its revenue sources.

Founded in 2017 by Ukrainian entrepreneur Viktor Radchenko, Trust Wallet was created to provide users with an accessible crypto financing solution. With a mobile-first approach, Trust Wallet allows users to buy and sell crypto, manage their NFTs, and brows dApps from just one platform.

In 2018, Trust Wallet was acquired by Binance- the world’s largest crypto exchange. Binance paid in a mix of cash, stocks, and Binance tokens, but the purchase price was never disclosed. Back in 2018, the Trust Wallet team just had five developers with no staff for marketing, PR, or investments.[1]

What is Trust Wallet & How Does It Work?

Trust Wallet is a crypto finance platform that allows users to buy, sell, and exchange crypto within minutes. It is easy to set up and use, with an advanced security layout. Users can create an account for free if they have a phone, by downloading the app from Apple’s App Store or Google’s Play Store.

The app allows users to send, receive, buy, and trade crypto. Since Trust Wallet doesn’t have its own payment infrastructure, users will have to buy crypto through a partner. Trust Wallet allows users to buy a wide range of cryptocurrencies through third-party providers such as Wyre and MoonPay.

Whenever a user chooses a cryptocurrency and the amount that they wish to buy, Trust Wallet will automatically select the best service provider. This is done based on factors like transaction speed, amount, and service charges. Users will get the best rates at any given time.

However, it can be cheaper to buy directly from a dedicated crypto exchange such as Binance. Decentralized exchanges also offer more payment options for buying crypto, while Trust Wallet only supports card-based payments. It should be understood that buying crypto isn’t the primary feature of Trust Wallet but merely a way to introduce funds for staking and swapping.

The ability to stake and swap coins is the main reason so many users love Trust Wallet. Staking is when users put their coins forward to be used in proof-of-stake mining transactions that use staked coins to validate the blockchain rather than proof-of-work that uses processing speed to do so. Increasingly, many cryptocurrencies are choosing proof-of-stake over the environmentally unfriendly proof-of-work blockchain model.

Crypto swapping is a more seamless process for trading cryptocurrency that allows users to acquire coins instantly. Currently, the platform supports 65 blockchains and over 4.5 million assets. It is not an exchange but allows users to trade on any decentralized exchange by acting as an intermediary.

Trust Wallet makes it very simple for investors to steadily grow their crypto investments through staking. Many popular coins like Binance Coin (BNB), TRON (TRX), Tezos (XTZ), and Algorand (ALGO) are supported by Trust Wallet for staking. Users can constantly discover new coins by clicking on the ‘Discover’ tab.

Judging the viability and performance of any coin is very easy on Trust Wallet. Users can tap on the icon for a coin which takes them to an analytics page. Here, everything from time-charted value graphs to market cap and supply can be viewed.

While staking coins, Trust Wallet displays the annual percentage rate (APR) next to the coin. This gives users an idea of the profit they will make on their investment after a year. Users can also view the amount of crypto they have staked, which will be unavailable for a certain time period.

Swaps are the next most important feature on Trust Wallet. With swaps, users can exchange one token for another based on current market rates. Trust Wallet itself is not a decentralized exchange (DEX), but it partners with some of the best ones.

Binance, which owns Trust Wallet, is the most popular crypto exchange. Hence, users can expect very competitive exchange rates. Trust Wallet also supports all major blockchain protocols like ERC20, BEP2, and ERC721.

If a certain token isn’t listed on Trust Wallet, users can add it by themselves. Trust Wallet also supports a diverse range of stablecoins. So users can swap their existing crypto assets into stablecoin in order to stay safe from market volatility.

For advanced crypto traders, Trust Wallet has an exchange tab that is right next to the swap tab. The exchange allows users to manually set the value for how much they are willing to pay or receive on any given coin. This places a buy order in the exchange, which will execute as soon as the prices match up with the user’s input.

Trust Wallet has predefined ‘buy and sell’ pairs for crypto exchanges. These pairs allow users to make repeat transactions without manually selecting the coin type every time. All open orders placed by the user are displayed in a separate section underneath the buy and sell window.

In addition to crypto trading and wallet services, Trust Wallet also has a decentralized application (dApp) browser. Here, users can access any dApp that runs on the supported blockchain networks. Since this is a fully functional Web3 browser, users can find apps for everything from finance to media and entertainment.

The dApp browser is linked to a user’s crypto wallet, so they can make seamless transactions without manually adding funds in each app. Trust Wallet also supports non-fungible tokens (NFTs) on the BSC and Ethereum networks. Users can open access a market that sells NFTs, such as BakerySwap, from the dApp browser.

After buying an NFT from the market with their Trust Wallet funds, users can view it within the NFT section of the dashboard. Trust Wallet also allows users to send their stored NFTs in a quick and easy manner.

Since Trust Wallet is a decentralized finance (DeFi) app, it doesn’t actually store any funds. Instead, the app acts as a node by giving users an easy way to store the addresses for their funds that are on various blockchains. Trust Wallet’s simplicity and support for a wide variety of assets helped it gain a large userbase within a very short period of time.

In 2020, Trust Wallet had over five million users.[2] Currently, the app has over 10 million downloads on the Google Play Store, with an average rating of 4.5 from 1.15 million reviews.

 

Business Model of Trust Wallet

Trust Wallet is a multirole DeFi app that follows the business-to-consumer model, but it likely makes money via business-to-business affiliate fees and its own cryptocurrency. It links customers with decentralized exchanges and fiat-to-crypto onramps. Trust Wallet also acts as a fully functional Web3 browser platform where users can experience a multitude of dApps.

By acting as an accessibility layer on top of existing crypto services, Trust Wallet draws in a very large userbase. These are people who want to understand and experiment with crypto. But they lack the time and experience that is needed to carefully manage their portfolio across a multitude of platforms.

Sending crypto from the wallet and receiving crypto into the wallet is completely free, Trust Wallet also allows users to buy crypto on its app. This is done by partnering with fiat-to-crypto onramps like Wyre and Transak.

These partners charge a service fee depending on the amount being transferred and the payment method. Unlike most crypto wallets, Trust Wallet doesn’t charge its own fees on top of these. It provides a truly free service to users.

Competitors often add extra service charges on top of the network fees for profit. This discourages users from making frequent transactions on those apps as they lose a small amount of money just for the privilege of making a transaction.

Trust Wallet is able to gain a loyal userbase who trade and exchange crypto frequently on its app by charging zero fees. The only fees a user pays are the gas fees that are inherent to most blockchains. Depending on market liquidity, blockchain network fees can vary significantly.

Hence, Trust Wallet allows users to set a limit for the amount of gas they are willing to pay. A lower fee could mean longer transaction times. Conversely, a higher gas fee results in much faster transaction processing.

This level of convenience and user-centric design differentiates Trust Wallet from every other crypto wallet on the market. Trust Wallet also has its own token, known as Trust Wallet Token (TWT). As of September 2022, TWT is selling for just over $0.93 on the BNB Smart Chain.

Trust Wallet doesn’t make money directly when users trade their tokens. However, they do have significant earning potential if they choose to liquidate their assets. There are a total of one million Trust Wallet tokens, and Trust Wallet holds the majority of the supply.

The company uses TWT as a means to drive growth and encourage users to make more transactions. Whenever a user makes a transaction, they can choose to use TWT instead of paying service fees that would normally be charged by the network.

Trust Wallet’s biggest rival is MetaMask, as they offer similar services. Just like Trust Wallet, MetaMask is a gateway to DeFi and dApps. However, MetaMask is limited to the Ethereum ecosystem, while Trust Wallet supports a wider variety of blockchains.

MetaMask also charges its own service fees on top of the existing network fees. This makes Trust Wallet a better choice for users who want to trade crypto with zero hidden fees.

MetaMask is available as a desktop extension or mobile app. In contrast, Trust Wallet is only available on mobile.

There is no data on the financials of Trust Wallet, as it is a private company. It is hard to speculate on Trust Wallet’s operating costs.

Trust Wallet is estimated to have an annual revenue of around $4.1 million per year, but it also has considerable expenses.[3] These include things like staffing costs, hosting costs, platform costs, and development costs.

Due to the lack of data on Trust Wallet’s financials, it is unclear how profitable the company’s business model is.

 

How Does Trust Wallet Make Money?

Trust Wallet makes money in four ways. They are affiliate revenue, Trust Wallet Tokens, data, and integrated services.

However, many of these revenue streams are unconfirmed. Trust Wallet doesn’t make money from charging its users. The company charges no additional fees on top of what their digital exchange and fiat-to-crypto partners already charge.

As Trust Wallet is a private company, details about how much revenue it generates and its revenue streams are not public.

Affiliate Revenue

Like many cryptocurrency wallets, Trust Wallet likely makes money from affiliate commissions from third-party services and crypto exchanges.

While Trust Wallet does not release details about whether or how much it might earn from affiliates, it is likely that some exchanges pay Trust Wallet a commission to refer new customers to them.

 

Trust Wallet Tokens

Trust Wallet has its own crypto tokens. Called Trust Wallet Tokens (TWT), the company gives these tokens away to users who then exchange them or use them to pay service fees. There are one million tokens in total, and as of September 2022, these tokens were selling for $0.93 each. Trust Wallet owns the majority of these tokens.

By giving these tokens away and allowing them to circulate, they have created valuable assets out of nothing. While their stake in TWT is currently quite small, these tokens might grow in value in the future.

As the holder of the majority of the tokens, Trust Wallet profits should this occur. Trust Wallet could then sell their Trust Wallet Tokens to liquidate its position.

 

Data

One thing that wallets like Trust Wallet have is data about transactions across crypto exchanges. While Trust Wallet may or may not sell this data, it likely plays a key role in generating income for Binance, its parent company.

Binance could, theoretically, use anonymized data from users to better understand how to improve its own exchange platform or undercut its competitors. While this wouldn’t directly generate income via Trust Wallet, it could boost Binance’s revenue considerably.

 

Integrated Services

When Binance purchased Trust Wallet in 2018, the company said that they hoped to improve Trust Wallet’s integration capabilities so that it could work better with future services Binance was intending to offer on its exchange platform.[4]

Trust Wallet is likely primarily an investment for Binance in vertical integration. By owning a trusted crypto wallet, Binance is able to customize it, so it works better with the company’s current and future services and products. That will help ease adoption and give Binance more control over its ecosystem.

While this doesn’t earn money directly for Trust Wallet, the company is a key part of Binance’s business strategy when it comes to expanding into future products and markets.

 

Trust Wallet Funding, Valuation & Revenue

Trust Wallet is currently owned by Binance, the largest crypto exchange. Binance is a private company and doesn’t release many details regarding its financials. Right now, it is unclear what Trust Wallet is valued at. When Binance purchased Trust Wallet, details around the purchase price were not disclosed.

Binance has raised $2 billion through four funding rounds. Notable investors include Funcity Capital, Black Hole Capital, and Limitless Crypto Investments.[5]

Binance has been growing its revenue in recent years. In 2019, the company was estimated to have made $570 million in profit.[6] In 2020, Binance projected they would make $1 billion in profit.[7] That was a 75.4% increase over the previous year.

It was estimated that the company made $20 billion in revenue in 2021.[8] The same year, global crypto exchange revenues were predicted to have increased by 600%.[9] Binance increased its share of spot-market crypto trading from 49% in 2020 to 69% in 2021.[10]

The company’s userbase has also been increasing in recent years. It has gone from an estimated 21.5 million in 2020 to 28.6 million in 2021.[11]

 

Is Trust Wallet Profitable?

Trust Wallet is likely not yet profitable. It is unclear how much the company makes as it has never shared details about its sources of revenue or how much revenue it generates.

The company likely makes money through affiliate fees and its Trust Wallet Token. However, Binance might have purchased Trust Wallet, not as a revenue generator, but with a goal of achieving greater vertical integration. Trust Wallet could give Binance access to anonymized trading data and enable them to create integrated products and services.

For those reasons, it might not matter if Trust Wallet makes money or how much the company earns. Its goal might be to help Binance make money.

Binance has been profitable for quite some time. In 2020, the company generated $1 billion in profits, which is 75.4% more than the $570 million it made in 2019.[12] Its user base has also grown from 21.5 million in 2020 to 28.6 million in 2021.[13]

 

Conclusion

In conclusion, Trust Wallet is a great company that is doing what it can to create a secure and easy-to-use wallet for the cryptocurrency market. The team has found a way to make money by leveraging the blockchain, and we are excited to see what they will do next!

We hope this blog post has given you a good overview of how Trust Wallet makes money and its business model. When you’re ready to get started, we recommend that you take a look at their website.

With so many features and so much support, Trust Wallet is sure to keep users happy for years to come!

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Sources

  1. Techcrunch
  2. Cointelegraph
  3. Growjo
  4. Binance
  5. Crunchbase
  6. CoinDesk
  7. The Block
  8. Bloomberg
  9. Marketwatch
  10. Marketwatch
  11. Business Of Apps
  12. CoinDesk
  13. Business Of Apps