WalletConnect: Exploring Sustainable Network Monetization

Abstract

• WalletConnect is exploring fees, not for users, but for apps that derive value from the Network.
• Fees are still in the discovery phase as WalletConnect explores monetizing the network.
• Fees are paid in WCT, creating recurring token demand.
• Collected WCT fees are redistributed to WCT stakers, wallets, custodians, node operators, and the community.
• End users will not pay to use WalletConnect. The UX remains smooth and free.
• This model aligns long-term incentives and makes the Network sustainable as it decentralizes.

1 Background / Motivation

Since 2018, WalletConnect infrastructure has quietly powered the backbone of onchain activity, securely connecting wallets and apps across ecosystems, with no cost to the users, apps, wallets, or custodians that rely on it. As the Network scales and decentralizes, it’s time to explore a more sustainable model.

The idea of introducing fees isn’t about paywalls or added friction. It’s about sustainability, alignment, and rewarding the participants who keep the network running, without compromising the open, permissionless foundation that the ecosystem is built on.

Fees are here to grow the Network, not gate it. They’re affordable, volume-based, and proportional to the value derived from WalletConnect. As adoption scales — driven by increased institutional adoption and fast-growing verticals like payments — fees help fund the infrastructure that the onchain economy relies on, making the Network more robust and frictionless.

As the WalletConnect Network decentralizes, fees will strengthen the Network and reward the wallets, nodes, users, and contributors who keep it running, creating both further utility and demand for the WalletConnect Token (WCT) alongside this.

Fees will not be charged to end users of the network.

2 Why Introduce Fees Now?

By the end of 2025, WalletConnect is expected to power more than $400B in Total Network Volume (TNV). WalletConnect powers more value annually than some of the world’s leading fintech companies. The goal is simple: power more onchain value than TradFi giants like Visa, Mastercard, Stripe, and Alipay. But unlike those systems, value on WalletConnect flows directly into applications and the ecosystem.

Until now, applications have captured immense value through WalletConnect, whether connecting user wallets and institutions to DeFi, facilitating onchain payments, or onboarding users across chains.

The WalletConnect Network is vital to the onchain economy, but it has essentially been free to use. A fee-less design doesn’t reward the ecosystem participants who keep the network secure and high-performing: node operators, wallets, custodians, users, stakers, and SDK developers. That design was important while the Network developed its market fit, but fees are crucial for its long-term position as essential infrastructure for onchain activity.

Introducing fees will enable a sustainable, resilient, and decentralized connectivity layer while allowing the WalletConnect Network to invest in network growth, strengthen security, and continue to lower latency.

Fees offer a path forward that keeps WalletConnect free for end-users while enabling meaningful rewards for contributors and expanding the utility of the WCT token.

3 How the Proposed Fee System Works

Network Value Flow

• The WalletConnect Network (WCN) provides the infrastructure that connects wallets and apps, powering both retail, institutional, and fintech DeFi activity.
• Users (retail/institutional) connect to apps via wallets and custodians.
• Through these connections, value transfer is facilitated (e.g., swaps, lending, deposits, and payments).
• Apps capture value from these connections by charging fees to their users.

Apps Pay Fees in WCT

• Apps that create value through the WalletConnect Network contribute a monthly usage-based fee.
• Fees scale with each App’s Total Network Volume (TNV), so higher-volume Apps pay more in absolute terms but enjoy a lower effective rate, benefiting from economies of scale.

• This model encourages growth and efficiency: as Apps drive more volume through the network, their marginal cost per interaction falls, strengthening alignment between App success and protocol sustainability.

Fees are Paid in WCT

• Network fees are priced in USD and paid in WCT, since WCT is the native payment asset of the WalletConnect ecosystem.
• Every transaction powered by the Network reinforces WCT’s practical utility and recurring demand.

Revenue is Redistributed to the Ecosystem

The WCT collected from fees charged to Apps is distributed as follows:

• Wallets & Custodians: Entry points for users; essential to onboarding and security.
• Node Operators: Run the infrastructure and keep the network reliable.
• WCT Stakers: Long-term token holders who lock their tokens and receive rewards.
• The Community: Rewards and support for community-led initiatives.
• Grants: Support app innovation and ecosystem growth.
• Research and Development: A portion earmarked for long-term improvements to Network performance and scalability, as proposed via Network governance.

This keeps WalletConnect’s communication layer neutral, performant, and secure, while requiring those who benefit from the Network to help sustain it.

Overview of the proposed fee system

4 The WalletConnect Flywheel

Fees don’t just fund infrastructure; they create momentum:

• WCT partner grants and incentives attract more institutions to go online.
• The more institutions that join the Network, the more users they bring with them, so more capital.
• Wallets and custodians are rewarded
• That creates stronger incentives to onboard users and institutions and keep them active onchain.
• More users ⇒ more capital
• Capital flows through the apps they connect to.
• More revenue ⇒ higher fees
• As more users and institutions interact with apps for swapping, staking, depositing, or payments, more value flows through the WalletConnect Network. Since fees are volume-based, increased volume leads to higher protocol revenue. But that cost scales with increased adoption, not against it.
• Higher fees ⇒ stronger incentives

Every fee paid fuels the ecosystem. That revenue is redistributed to the wallets, users, custodians, community, node operators, and stakers who maintain the Network. The more fees collected by the Network, the more these participants are rewarded, driving further participation, better infrastructure, and stronger wallet-user relationships.

The WalletConnect Network is the infrastructure. Apps build on that infrastructure and earn from the activity they create. In return, they contribute fees paid in WCT that sustain the Network. That WCT value is distributed to the other Network participants, rewarding the builders and participants who make it grow.

5 Will Fees Vary?

Yes, but predictably, depending on the application growth and market conditions.

WalletConnect fees are still in the discovery phase and may evolve as the Network matures. But the guiding principle is clear: fees will be volume-based and designed for scale.

Apps below the $1 million monthly volume threshold won’t pay any network fee; this ensures smaller or early-stage apps can grow before contributing.

As volume increases, the effective fee rate decreases, meaning larger apps benefit from lower relative rates.

Here’s how they’re structured:

• Fees are calculated in USD to keep pricing clear and predictable.
• WCT becomes the default medium of exchange for Network fees.
• Apps pay those fees in WCT, the WalletConnect Token.

6 What This Means for Token Holders

Network fees create direct, recurring benefits to Network participants.

• Stakers benefit from rewards: Staking rewards are determined by the amount staked and the staking or locked period. As WCT demand rises, stakers benefit from predictable on-chain reward parameters and potential token appreciation.
• Revenue flows back to contributors: Node operators and wallets receive rewards based on performance and participation, creating stronger incentive loops as Network usage grows.

7 What This Means for Users

End users will never be charged to use WalletConnect. Connect for free, anytime and anywhere.

8 What If My Application Does Not Use WalletConnect for Transactions?

If your application uses WalletConnect for anything other than powering transactions, network fees will not apply to those activities under the current proposal.

Put simply: No value transacted = no fees.

9 What’s Next

Fees are still in the discovery phase.

The WalletConnect Foundation will continue exploring how and when to activate fees, with proposals and decisions governed by WCT holders.