Fireside Chat: Payments, Agentic Commerce and the Evolution of Wallets with Pedro Gomes and Francesco Andreoli

Transcript

[applause] >> Welcome everyone. A lot of lights here. Welcome Pedro. And yeah, let's kick it off. Excited to actually like chat payments, giant e-commerce, everything wallets. And let's let's kick it off. Pedro, you want to quickly introduce yourself? >> Hi. I think this is maybe the second fireside chat we've done together. So, it's really good to reunite. Uh my name is Pedro. I'm the founder of WalletConnect. We created the WalletConnect network, which is the largest interoperability network across all digital wallets. And now we've launched WalletConnect Pay for merchants to accept crypto in their stores.

>> Yeah. Uh Francesco, I'm leading developer relation at ConsenSys. And yeah, yesterday we launched a giant wallet. Joe actually like presented a bit in our talk before. And I'm excited everything like, you know, wallet evolution. And we have different products for both like, let's say, agents and kind of like developers and builders. Uh I think we will touch a little bit on what what is happening here and in the space. But let's start with something kind of like basic, right? So, WalletConnect payment now infrastructure. Uh you guys in the past 6 months have been kind of like, you know, evolving quite quite well in a very interesting direction. You want to kind of like give an insight what what is happening and how things are evolving during these these times.

>> I mean, we are basically seeing a big shift on how people are building wallets. And even not just the wallet developers of how they're building wallets, but also how wallet users are interacting with wallets. Uh there was a world where there was a thousand applications every day, and there was another thousand applications the next month. And basically WalletConnect came as a necessity because as a wallet user for you to explore Ethereum, you had to engage and interact with multiple applications across the internet and the connectivity was a very big problem that needed to be solved. But now, as there's a bit of a consolidation of I like to call it the wallet actions, the things that you can do with a wallet. Uh wallets like MetaMask are consolidating those

features within the wallet itself. Now, the question is, what is the user going to interface when they connect to the external world with their wallet? Uh the number one pain point that we saw was with payment specifically. So, how can I use any wallet across any merchant, whether that's online or in store, that can interface with a completely different system, whether that's a payment provider in Nigeria or Argentina or Hong Kong, and I can use my favorite wallet? And that's exactly what our famous QR code has succeeded to do for DeFi and is now doing for payments.

>> It's quite impressive. We're chatting before a bit of chain, like how many type of different payments uh has been around, right? What are kind of like the main types of those payments that you see? Obviously, like I'm a bit biased around like kind of like remittance or like kind of like peer-to-peer payments. Could be also micro payments, specifically for like uh you know, yeah, paying someone for a small services. I think agentic kind of commerce with export 2 is also like definitely like uh getting traction here. But what are kind of the categories where if you need kind of like box out those payment categories, what would be like the top three?

>> It's funny because if you look at the history of WalletConnect, we went from a very general purpose network that did everything. It was like a Swiss Army knife for wallets. And now, we focus exclusively on payments. But at the same time, payment is such a large world. Like you have payments between two parties, whether that's I just sending to Francesco some money. But then, there's a big difference between two parties within the same country and two parties international, where that would be classified as a remittance rather than a peer-to-peer payment. Then, there's payments between consumers and businesses and also vice versa between businesses and consumers. And then, there's obviously a difference between if you're paying between two businesses as well. So, within the payments world,

there's a big category. And from what we've seen in the past, like crypto payments have had multiple attempts of doing this. Most of the time, they actually onboarded the businesses to a completely new platform, which businesses were not very happy with. Uh so, we've tried to take a very different approach where we help existing payment providers actually accept crypto without having the merchants onboard in a completely new platform. >> Yeah, I think uh we definitely want to hear also a little bit more about like kind of the lesson learned about uh uh yeah, kind of like these web two experiences into our like how a web three company also moving into kind of this type of world around payment merchant and relationship based is actually like changing and what are the top kind of like lesson learned.

But, I think touching a bit what you said at the beginning like focusing on payment is definitely like a big uh priority uh also for us. I think like the uh let's say the UX experiences are also like changing. Like every cycle, I think like it's definitely like different. We see um a strong like evolution of uh meeting the users where where they are. So, a lot of kind of like uh ways that uh people are not interacting with like extra uh features, extra platform. And uh when we started actually integrated you know, a purpose uh prediction market directly on on extension and mobile, we started actually to see like the the behavior was very um was very like strong. Like people

actually wanted to have everything in the same uh some kind of like super super app uh specific kind of experiences. And also according to that, like they were also ready to kind of pay a premium for actually having a de-risked situation because every time you actually like interact with an extra uh layer, you also like expose yourself to an extra security concern. Um so I think like the type of like user definitely like uh entering this market are uh are changing, right? And the consumer behavior is changing, but I think also like UX is improving. But the question is also for you is like do you think the UX is improving? Is it improved enough? What are the kind of the things that you wish to see also like uh being kind of like adopted more?

You know, I remember last year we were in a fireside chat like that where we speaking about account abstraction, right? How we can abstract more the way. And I think obviously like in payment things has been changed a lot. >> Yeah, and account abstraction still plays a big role, uh but it kind of is a very specific one, right? Because uh like you said, meet the users where they are. Uh there's different types of users. Like there's going to be the existing applications, let's say an Amazon, who's just going to embed a wallet into the Amazon website. So you're never even going to see that you actually have a wallet. It's just going to be part of the website. But there's also going to be the scenario where a Revolut actually also embeds a wallet within the banking experience. So you don't even know that there's an actual

wallet, but it it does feel more like a financial experience. So it's less like an embedded wallet and more like a wallet as a service hidden behind a bank. And then there's going to be like the dedicated banking experience like more like what MetaMask is building, right? With MetaMask card and MetaMask USD. So that's going to be more like a crypto native experience, but trying to simplify as a super app, right? And WalletConnect always wants to make sure that it caters to all of these, right? So it's trying to be as broad as possible. And what we want is to have uh consolidation and unification across all of these experiences. So our main focus is always to break out the fragmentation and unification. And the QR code

standard we built has been quite successful, and it's something that we're pushing very hard with. >> Yeah, I definitely see like through like MUSD, the Meta Mask stable coin, right? And Meta Mask card, right? Like the how distribution is important and how also this merchant relationship is important. But in the same in the same like angle, I also see that people are obviously accustomed to specific experiences. And I would love to understand a bit, you know, you've been I think we discussed what the first time kind of like this this this changing kind of like narrative and strategy like back in the in in uh What is Air S? Now it's like 6 months. Like what what are kind of like the main lesson learned that you want to share that you kind of like discover? I really like this

payment in and payment out concept. You want to kind of share a little bit more about this lessons. >> Yeah, because if you think about the pain points, at the end of the day Wallet Connect is primarily a B2B business with a consumer-facing brand. So it's a B2B2C. And we end up focusing on what the consumers actually feel the most attracted with. So pay ins, like you go to a store and you can just pay with crypto. No crypto cards, just like straight crypto transactions at the merchant. That's very attractive and very tangible for the usual consumer.

But when you actually talk to businesses, they actually have the opposite problem. They actually want to pay out to consumers, whether that's a marketplace where for example they have to pay out to multiple recipients or even a content creation platform where they have people creating content, let's say, in Philippines, in China, in South Africa. Like they can't support every single banking platform possible. So a stable coin payout is really attractive to them because it simplifies their logistics quite a lot. So we did see a lot of demand at the beginning on the pay ins because that's what we had focused on. And kind of like the fallacy of you have a hammer everything looks like a nail. But then as we saw the pipeline grow, we actually had way more

demand for the payouts. And it was quite interesting to see how Wallet connect having built this massive wallet network with over 700 wallets actually had quite a competitive advantage in that market. >> I think at the end is also distribution what matters, right? So, I think that's that's super important. Yeah, I mean distribution to let's say users by distribution I think to agents right now it's quite important. I think also like you know, the infrastructure is being shaped. There is a lot of different kind of iteration that you want to kind of like provide to kind of to kind of satisfy both kind of like you know, human interaction and also like agents interaction. But at the end of the day I also think like you know, people will use and leverage

like harnesses or agent, but you will still be the one still kind of like guard railing like the decisions. Yeah, so I just kind of think yeah, we kind of like switch a bit like a gears, right? I think on the agentic commerce you definitely see a lot of like growth especially on on the standard side. But I think like you know, there is not a strong PMF like a stable coin, right? I think we're still in a very experimental kind of phase. I think things are moving in in the right direction.

And I think at the same time we're moving in the direction that we want to give more guardrails to agents. Right now there is a lot of like let's say beast modes being pushed on on different like traders CLI and people just looking for more instrument to to push like their other trading experiences, right? Did you hear like agentic conversation at Money 2020? How was the like on the payment side, right? XPRT I think is a bit like two two technical, but you know, stablecoin payments through through agent is it something that you hear more about or >> I think the reason we hear about this correlation between stablecoins and agentic payments is because they're both

internet native technologies, right? It's almost like they both live in the same house. There's like almost like intrinsic reason why they should work together. But there's there's a missing piece here where stable coins have succeeded because they have definitely provided a very clear experience where self-custody wallets have a good experience with stable coins where you have the right controls and permissions to actually allow this. And actually USDC kind of pioneered this where you're able to do what's called pull payments where you don't have to transfer something before it has been validated or verified by a counterparty.

So you could essentially uh authorize a payment without the payment actually settle on chain. And this is actually how most card payments work. So doing authorizations is what made stable coins work, not just because they're tokenized dollars. And basically agentic payments actually are missing this aspect. The the authorization piece is clearly missing here. So as you said, the beast mode like kind of like YOLO, let the agent do whatever you want, is kind of funny if you want to build a mini app or if you want to build a quick PowerPoint presentation, but it's not so funny if it's actually going to manage and buy a bunch of flight tickets and hotels.

>> Yeah, that was actually the entire purpose of thinking about planning and the kind of like executing on this MetaMask agent wallet because the entire goal was and I tested like mostly of the the CLI out there like gasless right now are non-existent, right? And uh you know, I would definitely like sacrifice some latency if I know that there is a uh a transaction simulation detector, if I have some specific insurance on uh on on a transaction. Uh so there are actually like security check on tops, right? Even before the agent signing or transacting specifically, right? So I think uh um yeah, I think like the kind of Yolo mode is is something that will if you're like a serious

kind of like let's say trader, not just acting as an agency, but if you're actually running different trading operation on different kind of like levels including like perps and and prediction, you definitely need to have those carlays in action. And I think like, you know, it's just eventually we will also like get in a more carlays stronger carlays guarantees you have probably like some trade-off and you have different setups. But yeah, I'm excited about seeing that, but I also in the in some ways I definitely see that we're still in a big kind of like experiment experiment mode because, you know, playing a bit the devil's advocate like I don't know if you check the export or two kind of volumes.

You definitely see same agents kind of running the same transactions. So, you can even argue like the PMF is still too early to to see. But yeah, excited. So, I think like you shared a bit the the the lessons learned here. What are kind of also the misconception that I think Web3 has right now that we should kind of like change a bit our mind when actually we're speaking both kind of like with bigger payment merch merchant like Web2 like counter players. Yeah. >> Um I don't want to be too negative, but like basically when you think about crypto, like we always think that we have the expertise obviously. Like we we've been building this technology for so long. We

understand that very clearly, but there is definitely a bigger leverage where they they don't need us as much as we need them. Like it really is a distribution game and a lot of the things that we could replicate, they already have. In fact, even when we're talking about guardrails for agentic payments, like theoretically speaking, cards payments are quite good at doing permissions and authorizations. They don't need a new version of it. So, that theoretically you could do agentic payments with cards. Uh one thing that they don't have is the self-custodial aspect of it. And that's definitely one of the biggest uh validations that we've seen as we talk

to these payment providers, where they need to be compliant with like travel rule and Mika and all of these new regulations. And WalletConnect has been able to take a very uh good stance because we actually built this not because of travel rule. Like, we built wallet verifications, we built sign-in with Ethereum back when NFT communities were being built, back when there were DAO governance, back when there was like all of these airdrops. We built all of this technology for a completely different reason, and then the regulation actually came to us. And then we had everything built right into these self-custody wallets, where you could do wallet verification and identity built in into the WalletConnect SDK. So, this is one of the clear things where you

realize that they don't need our distribution, we need their distribution, but they don't have the self-custody aspect because it completely shifted how the world works, where there's always this counterparty or third party that controls the user rather than the user controlling themselves. >> I agree. I I agree on the And what about like um like I don't know, the IDs. So, like, you know, the centralized identity. I'm thinking about like agent reputation right now. Uh is it something that you think makes still sense or you think like, you know, bigger players will just build their own reputation centralized ecosystem and and that's it?

>> Yeah. I mean, the IDs are are are a simple identifier within like a bigger spectrum. Like, what as I mentioned before, self-custody is the key differentiator here. Like, before the IDs, like, you would just go to some server and say, "Tell me this user is this user." You don't have the human in the loop aspect because uh the human is not in control of his identity. Now that the human is actually in control of his identity, we need to have a superior user experience while allowing the user to have full control of his identity.

And DIDs provide this kind of thin layer that bridges between server-based like infrastructure and like wallet-based infrastructure. So, we do use DIDs and what within wallet infrastructure. Now, the question is how does wallet connect interface with the rest of the world and can they read these DIDs such that it's usable within their systems? >> Yeah, cool. So, we have 1 minute left. Anything like that you're looking forward to that we kind of like need to work on that you wish kind of like will exist in the next let's say let's say 2 to 6 months, right? The space is moving so fast quickly.

>> Yeah, so I think when we think about card payments, we take it for granted, but like back in the day like in the '90s, if you gave the people like those digits behind the credit card, people were like getting stolen, like they would lose all of their money. There was zero trust. That's exactly how we feel about the wallets addresses. Like it gives us anxiety. And then Visa and MasterCard for like the next 20 to 30 years built all of these guardrails and infrastructure and and essentially the user experience that we now take for granted.

That's what we need to do for wallets. Like wallets need to have this like embedded and very native experience where it feels just as safe. Where you have like two-way fair authorization, you have granular controls for agents, you have the ability to essentially memorize your profile over one identity, go to a website, and you say, "I'm Pedro." And pay with whatever wallet I have. Like that's the vision where wallet payments and card payments will be almost indistinguishable from each other and actually will be preferable because it's a self-custody version of the form.

>> I agree. I I should even add like, you know, I think permission permission enabled infra like by default, you know, build by by by design, right? I think it's it's something that we we definitely need to have. And I think granular granular permission and guardrails for specific actions. Sounds good. Awesome. Thanks so much, Pedro. Thanks so much for listening. I wish we had some Q&A session, but we're out of time. And yeah, appreciate the time. Thank you, everyone. >> Thank you. >> [applause]