Gate Research: Evolution of Crypto Wallets and CEX Going On-Chain

Gate Research has released its latest report, Evolution of Crypto Wallets and CEX Going On-Chain, which systematically traces the evolution of crypto wallets from the birth of Bitcoin—when they primarily served as private key management and transaction-signing tools—into core entry points for on-chain finance. The report reviews how major waves such as DeFi Summer, inscriptions, Memecoins, and on-chain derivatives have continuously increased the frequency and complexity of on-chain user interactions, pushing wallets to evolve from passive asset management tools into All-In-One, on-chain “CEX-like” platforms that integrate asset management, trading, issuance, and distribution. It also analyzes the paths through which wallets have achieved commercialization breakthroughs during successive new-asset cycles.

The report further examines, from a structural perspective, the reshaping of the relationship between wallets and CEXs. It finds that several traditional CEX advantages are being unbundled and migrating toward wallets and on-chain infrastructure layers. At the same time, CEXs have not remained passive; instead, they are extending their service reach through embedded wallets and on-chain strategies. Using Gate Web3 Wallet as a case study, the report explains how exchanges can build a unified gateway to on-chain finance while retaining strengths in compliance, fiat on/off-ramps, and user services, in response to the ongoing migration of users and assets on-chain.

Gate Research believes that as trading, execution, and asset management capabilities continue to concentrate at the wallet layer, competition among wallets is shifting from feature accumulation to key dimensions such as trade quality, experience abstraction, compliance capabilities, and AI-driven execution. Wallets are increasingly taking on portions of CEX core functionality, objectively pressuring exchanges to accelerate their on-chain and embedded-wallet strategies. Looking ahead, wallets and exchanges are expected to enter a prolonged phase of boundary reshaping and coordinated evolution, jointly shaping the next stage of crypto-financial infrastructure.

Key Takeaways

• Origins Revisited: Wallets originated as private key management and transaction-signing tools; asset control derives from private keys, forming the industry’s foundational principle—“Not your keys, not your coins.”
• Establishing the Gateway: DeFi Summer cemented wallets as the mandatory gateway to on-chain finance, though early commercialization remained limited.
• Structural Evolution: Waves of NFTs, inscriptions, Memecoins, and on-chain derivatives propelled wallets toward All-In-One, on-chain “CEX-like” platforms.
• Commercial Breakthroughs: Wallets increasingly control trade routing and traffic distribution, enabling observable monetization across asset issuance, high-frequency trading, and new-asset discovery.
• Relationship Reconfiguration: Portions of CEX core capabilities are migrating to wallets and on-chain infrastructure, while exchanges respond by accelerating on-chain strategies via embedded wallets.
• Competitive Focus: Trade quality, experience abstraction, compliance capabilities, and AI execution are emerging as the key differentiators in the next phase of wallet competition.
• Trend Outlook: As wallets assume parts of CEX functionality, they are pressuring exchanges to speed up on-chain deployment, ushering in a long-term phase of competition and cooperation between the two.

Read the full report → Gate Research: Evolution of Crypto Wallets and CEX Going On-Chain

Gate Research is a comprehensive blockchain and cryptocurrency research platform that provides deep content for readers, including technical analysis, market insights, industry research, trend forecasting, and macroeconomic policy analysis.

Disclaimer

Investing in cryptocurrency markets involves high risk. Users are advised to conduct their own research and fully understand the nature of the assets and products before making any investment decisions. Gate is not responsible for any losses or damages arising from such decisions.

Gate Team

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