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MetaMask Raking in ~$170k/Day Shows DeFi Wallets Work as Businesses

MetaMask is making about $170k per day thanks to its token swap feature, Tom Schmidt of Dragonfly Capital said in a tweet, which was later confirmed with data the wallet’s team published in a Dune Analytics dashboard.

The decentralized wallet and most popular gateway to DeFi is processing between $15M and $20M in daily trading volume through the swap feature launched in October, Dune Analytics data show. MetaMask takes 0.875% in fees from each trade, which resulted in as much as $198k of revenue from a record $22.7M in volume on Jan. 24.

Sustainable Business

These numbers show that wallets and decentralized exchanges and aggregators can grow into sustainable businesses. This contradicts the common take that open source protocols can’t be profitable because developers can easily copy the code and create a competitor with lower or no fees.

“I have a feeling that this is going to be good news for wallets everywhere. A lot easier to invest in something with a validated business model,” said MetaMask developer Dan Finlay, in response to a tweet. 

Over 100K unique accounts have executed 236k swaps within MetaMask, the data show. That’s still a small portion of the ~1.3M total accounts interacting with DeFi protocols. 

MetaMask’s daily swap volume is 10 times lower than other aggregators, like 1inch Exchange, whose daily volume has fluctuated around $200M during January. 

All About The Fees

MetaMask’s 0.875% in fees is nearly three times what flagship decentralized exchange (DEX) Uniswap does with its 0.3% cut.

The wallet’s token swaps feature serves as an aggregator, accessing many DEXs at once, some of which are themselves aggregators, in an attempt to be for token swaps, what Expedia is for travel quotes, Finlay said in a post yesterday. Perhaps convenience trumps low fees as users attempt to keep their trading processes simple.

The revelation that MetaMask is making ~170K a day in fees has some Twitter users asking “when airdrop.” Uniswap airdropped its UNI token to users in September and 1inch dropped did the same in late December, so doubtless others are hoping for a similar event with MetaMask.