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Why embedded wallets are better for web3 games

January 28 2025

Web3 wallets are a core component for interacting with decentralized applications (dApps) and handling digital assets. Traditionally, wallets like MetaMask and Rainbow have been the go-to solutions for users to manage their tokens and NFTs. However, as web3 gaming has grown in popularity, developers have encountered challenges integrating these traditional wallets seamlessly into gaming environments. The result is often a disjointed experience: players must manage multiple interfaces, disrupting immersion and slowing down the onboarding process.

This is where embedded wallets come in. Embedded wallets integrate directly into games or applications, allowing users to manage assets without leaving the platform. They also reduce friction and make it easier for players to interact with web3 elements.

In this article, we will dive into what embedded wallets are, how they differ from traditional wallets, and why they are becoming a preferred solution for web3 game developers. We will also explore the challenges of fragmentation within embedded wallets and how Sequence solves this issue by connecting wallets across the gaming ecosystem.

Key takeaways

• Traditional wallets like MetaMask add friction, leading to higher abandonment rates in web3 games.
• Embedded wallets simplify onboarding by removing the need for external apps and complex setups.
• Embedded wallets improve the UX by securely managing private keys on remote servers and allowing easy authentication methods like social logins.
• Guest wallets let players engage without creating accounts, proven to increase conversion rates (e.g. Skyweaver saw a 73% increase).

Why friction matters in gaming onboarding

Friction during onboarding can have severe consequences for player engagement and retention. Studies show that when onboarding involves too many steps or becomes overly complex, users are much more likely to abandon the process. For instance, gaming platform PlayOJO experienced a 165% increase in engagement after simplifying its onboarding process, highlighting how critical smooth, frictionless onboarding is to success​.

In blockchain gaming, where managing digital assets is a key part of the experience, traditional wallets introduce significant friction that disrupts the onboarding flow. Players who are excited to jump into a game often need to navigate complex wallet setups instead. This makes them far more likely to abandon the game altogether.

Example of a traditional wallet setup: MetaMask

Let’s consider the setup process for MetaMask, one of the most commonly used web3 wallets:

1. Download and install MetaMask.
2. Create a digital wallet, involving setting up a password and managing a seed phrase for recovery.
3. Fund the wallet with cryptocurrency (which may require using an external exchange and undergoing verification).
4. Connect the wallet to the game and sign a transaction.

Each of these steps adds complexity and interrupts the player's experience, requiring them to navigate multiple platforms and interfaces. This process, while standard for web3 applications, can feel overwhelming, especially for players unfamiliar with blockchain technology and networks.

By contrast, embedded wallets streamline the entire process. Players can immediately interact with in-game assets without needing to install additional software, manage security phrases, or even purchase cryptocurrency upfront. Additionally, guest wallets, which don't require immediate registration or wallet setup, allow players to play without registering for an account, further reducing friction. In fact, Skyweaver saw a 73% increase in conversions after adopting guest wallets, illustrating how effective a frictionless solution can be.

We are continuing to improve the wallet experience with Guest Wallet Authentication: a new feature within the Sequence Embedded Wallet that simplifies onboarding processes.

October 27, 2024

With these advantages, embedded wallets are essential for reducing onboarding friction, helping game developers retain players, and offering a smoother, more immediate entry into web3 gaming.

Embedded wallets: UX and security advantages

Embedded wallets dramatically improve the user experience (UX) in web3 games by simplifying the onboarding process and handling much of the complex blockchain infrastructure behind the scenes. A key feature of embedded wallets is their architecture, which differs from traditional wallets in how users manage and store private keys—the cornerstone of blockchain security.

In traditional wallets like MetaMask, users typically store private keys locally on their devices. This requires users to take responsibility for managing their seed phrases and passwords, which can be daunting and risky for those unfamiliar with web3 technology. If users lose access to their seed phrase, they permanently lose access to their assets, making this a high-stakes responsibility.

Embedded wallets offload much of this complexity. In most cases, wallet providers store private keys on a remote server or cloud infrastructure. This means that users don't have to handle these private keys directly, significantly reducing the likelihood of user error or lost assets. Instead, security protocols verify user identities via multi-factor authentication or linking wallets to social accounts, offering a more accessible and less stressful experience for players.

Here’s how embedded wallet architecture typically works:

• Remote key management: The private key is generated and stored securely on the provider’s server, rather than being held locally by the user. In the case of Sequence, private keys are managed in a trusted execution environment using Amazon Nitro Enclave and AWS Key Management Service (KMS), ensuring that keys remain highly secure. Players authenticate through familiar methods like passwords, social logins, or even biometric data.
• Access through API integration: Embedded wallets integrate directly with the game through APIs, allowing the game to perform blockchain interactions—like signing transactions or trading NFTs—on the player’s behalf. This happens behind the scenes, ensuring that players don’t need to leave the game or interact with complex blockchain interfaces.
• Guest wallets and progressive onboarding: Many embedded wallets, including those offered by Sequence, allow for the creation of guest wallets, which don't require immediate registration or wallet setup. A temporary wallet is generated and linked to the user’s session, and as the player continues to engage, they can choose to upgrade to a full wallet by connecting it to a social account or email. This provides a seamless transition from guest to permanent status without disrupting the gameplay experience.
• Security and recovery: Even though private keys are stored remotely, security is still a priority, through advanced encryption and authentication methods. Should players lose access to their account, they can recover it through email or social authentication, rather than relying on a seed phrase. This architecture helps mitigate the risk of asset loss due to human error, a common problem with traditional wallets.

Get started with embedded wallets

Sequence Builder

1. Explore how Sequence Embedded Wallets solution can help you integrate web3 seamlessly into your game and deliver exceptional player experiences.
2. Sign up for free into Sequence Builder, our all-in-one web3 development platform solution, and start building right away!

Sequence makes building onchain simple. Developers and teams can launch, grow, and monetize apps with unified wallets, 1-click cross-chain transactions, and real-time data, all in a modular and secure stack. No more stitching together fragmented tools or battling poor user flows. Sequence is production-ready infrastructure that helps teams ship faster, onboard more users, and scale confidently. From chains and stablecoins to DeFi and gaming, Sequence powers developers and applications across the EVM ecosystem with billions in transaction volume and millions of users. Trusted by leaders in blockchain, Sequence powers today’s onchain apps and delivers future-proof infrastructure for tomorrow’s breakthroughs. Learn more at sequence.xyz _.