Originally published on: December 03, 2024
Ethereum co-founder, Vitalik Buterin, is on a mission to improve security and privacy in Web3 wallets. In a recent blog post on Dec. 3, Buterin emphasized the importance of integrating features that prioritize user privacy and security within these wallets.
According to Buterin, users can only truly benefit from the decentralization, censorship resistance, and other properties that Ethereum and its applications offer if their wallets also possess these essential features. He proposed various ways to facilitate transfers among Ethereum’s layer-2 scaling networks, such as Optimism and Arbitrum.
Ethereum currently hosts numerous layer-2 scaling networks, collectively managing over $50 billion in total value locked (TVL), as reported by L2Beat.
Web3 developers are urged to incorporate privacy features into all Web3 wallets, rather than limiting privacy to specialized wallets. Buterin pointed out the inconvenience users face when making private transfers on Ethereum, as it often requires them to use a separate “privacy wallet.”
To address this issue, Buterin suggested implementing a system where wallets store a portion of a user’s assets as a “private balance” in a privacy pool to fund transfers securely.
Furthermore, Buterin advised integrating multisignature authorization into all Web3 wallets as an added layer of security. This feature requires several signers to approve transactions, enhancing the security of user assets.
Additionally, Buterin emphasized the need for simplifying transfers among layer-2 networks by enabling direct token transfers to a user’s wallet on a different layer-2 network. He proposed a format for wallet addresses that streamlines this process, making it more user-friendly and efficient.
Buterin’s push for Web3 developers to accelerate layer-2 decentralization aligns with his commitment to only recognize scaling solutions that meet his criteria for decentralization. By 2025, he plans to acknowledge only layer-2 networks that have established fraud-proof or validity-proof mechanisms.
Stay updated on the latest DeFi developments and financial opportunities by subscribing to the Finance Redefined newsletter, offering expert analysis and insights delivered weekly to your inbox. Join the conversation and make informed decisions in the rapidly evolving world of decentralized finance.
