The hidden concerns behind the Web3 super unicorn Phantom

Author: zhou, ChainCatcher

The cryptocurrency wallet market in 2025 is witnessing a brutal battle for market share.

As the meme coin craze fades, high-frequency trading users are flocking to exchange wallets with lower fees and stronger incentives. In the face of the closed-loop ecosystem of exchanges, the survival space for independent players is continuously shrinking.

Against this backdrop, Phantom's performance has attracted attention. At the beginning of the year, it raised $150 million, pushing its valuation to $3 billion. Since the fourth quarter, the project has launched its own stablecoin CASH, a prediction market platform, and a crypto debit card, attempting to find new growth points beyond trading.

$3 Billion Valuation, From Solana Origins to Multi-Chain Expansion

Looking back at Phantom's development history, in 2021, the Solana ecosystem had just exploded, and the on-chain infrastructure was still incomplete. Traditional crypto wallets like MetaMask primarily supported Ethereum, lacking compatibility with other chains, resulting in certain shortcomings in user experience.

Typically, when creating a wallet, users must manually write down a seed phrase of 12 or 24 words; if the key is lost, assets cannot be recovered permanently, which makes many potential users feel that it is cumbersome and risky.

The three founders of Phantom had previously worked for years at 0x Labs (an Ethereum DeFi infrastructure project). They seized this opportunity and chose to enter from Solana, creating a wallet with a simple interface and intuitive operation. Its core innovation lies in optimizing the backup process: providing various simple methods such as email login, biometrics, and encrypted cloud backup to assist in replacing the manual writing of seed phrases, significantly lowering the entry barrier for newcomers.

In April 2021, the Phantom browser extension was launched, and within months, the user base surpassed one million, becoming the preferred choice for Solana users. According to RootData, in July of the same year, Phantom, still in the testing phase, secured $9 million in Series A funding led by a16z; in January 2022, Paradigm led a $109 million Series B round, valuing it at $1.2 billion; until early 2025, Paradigm and Sequoia led another $150 million round, pushing its valuation to $3 billion.

As its scale expanded, Phantom then opened its multi-chain territory, supporting multiple public chains including Ethereum, Polygon, Bitcoin, Base, and Sui, attempting to shed the label of being a "Solana-only wallet." However, Phantom still does not natively support BNB Chain, and users have previously complained that Phantom supports ETH but not BNB Chain, leading to missed airdrop opportunities.

The Joys and Concerns of 2025

For Phantom, 2025 is a tale of two extremes: on one hand, rapid breakthroughs in user and product levels; on the other hand, a significant erosion of trading volume share by exchange wallets.

Specifically, user growth is the bright side. Phantom's monthly active users grew from 15 million at the beginning of the year to nearly 20 million by the end of the year, with growth rates ranking among the top in independent wallets, especially with significant user increases in emerging markets like India and Nigeria.

At the same time, Phantom's custodial assets exceeded $25 billion, with peak weekly earnings reaching $44 million, and annual revenue once surpassing MetaMask, with Phantom's cumulative revenue nearing $570 million.

However, concerns on the trading volume side are equally prominent. According to Dune Analytics data, Phantom's share of the embedded swap market across the network fell from nearly 10% at the beginning of the year to 2.3% in May, and further shrank to only 0.5% by the end of the year. Exchange wallets, leveraging fee advantages, rapid new listings, and substantial airdrop subsidies, attracted a large number of high-frequency trading users, with Binance Wallet currently occupying nearly 70% and OKX (wallet + routing API) accounting for over 20%.

The market's greater concern for Phantom lies in its deep binding to Solana. Data shows that 97% of Phantom's swap transactions occur on Solana, while Solana's total locked value (TVL) has dropped over 34% from its peak of $13.22 billion on September 14, currently falling to a six-month low of $8.67 billion. This directly drags down Phantom's core trading metrics.

In the face of these pressures, Phantom is betting its resources on new products, attempting to carve out a second growth curve.

In terms of products, Phantom has launched a series of differentiated features:

• In July, it integrated Hyperliquid perpetual contracts, driving approximately $1.8 billion in trading volume within just about 16 days, generating nearly $930,000 in revenue through a rebate mechanism (builder codes);
• In August, by acquiring the meme coin monitoring tool Solsniper and the NFT data platform SimpleHash, it further solidified its coverage of segmented trading demands.
• The native stablecoin CASH launched at the end of September, with supply quickly surpassing $100 million, and peak transactions in November exceeding 160,000, with its core competitiveness lying in fee-free P2P transfers and accompanying lending rewards;
• In December, the Phantom Cash debit card debuted in the U.S., allowing users to spend directly with on-chain stablecoins and compatible with mainstream mobile payments like Apple Pay and Google Pay;
• On December 12, it announced the launch of a prediction market platform, integrating the Kalshi prediction market within the wallet, which is currently open to eligible users;
• It also launched a free SDK "Phantom Connect," allowing users to seamlessly access different web3 applications with the same account, further lowering the onboarding barrier for developers and users.

Among these, the most attention-grabbing are the debit card and the CASH stablecoin, as Phantom attempts to solve the "last mile" problem of cryptocurrency asset consumption through them.

Phantom CEO Brandon Millman has publicly stated that there will be no token issuance, IPO, or self-built chain in the short term, and all efforts are focused on refining the product to make the wallet a financial tool usable by ordinary people. He believes that the ultimate outcome of the wallet race is not who has the largest trading volume, but who brings cryptocurrency into everyday payments first.

However, the "last mile" of cryptocurrency payments is not an easy road, and Phantom is not the first independent non-custodial wallet to launch a debit card.

Prior to this, MetaMask had already partnered with Mastercard, Baanx, and CompoSecure in Q2 2025 to launch the MetaMask Card, supporting real-time conversion of cryptocurrencies to fiat for spending, and rolling out in multiple regions including the EU, UK, and Latin America. MetaMask's card has broader coverage and launched earlier, but is limited by Ethereum and Linea networks, resulting in higher costs and slower speeds, with user feedback indicating "convenient but rarely used."

In contrast, Phantom's debit card started later and is currently only being rolled out in a small area in the U.S., with actual adoption still to be observed. Theoretically, it relies on Solana's low fee advantage, which may be more competitive in fee-sensitive emerging markets, but in terms of global coverage and merchant acceptance, it still has a significant gap compared to the MetaMask Card.

Regarding the stablecoin, if CASH cannot form a sustained network effect, it may follow the path of other wallets' native stablecoins that started strong but declined, such as MetaMask's native stablecoin mUSD, which quickly surpassed $100 million in supply after launch but dropped to about $25 million in less than two months.

Conclusion

As the meme craze fades, trading volume is no longer a reliable moat; independent wallets must return to the essence of financial services.

Overall, Phantom integrates Hyperliquid perpetual contracts and the Kalshi prediction market on the trading side to retain high-end users; on the consumption side, it bets on the CASH stablecoin and debit card, attempting to bring on-chain assets into everyday life.

This dual-track drive of "trading derivatives + consumer payments" is Phantom's self-redemption under the pressure of the Matthew effect in the wallet race. It is not only seeking a second growth curve but also defining the ultimate outcome of independent wallets.

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