In our digital era, we get revolutions with cutting-edge technology but are also stuck with complex problems. The same applies to crypto-enthusiast startups who headfirst into the crypto space to earn immense profits. Yet, they are jammed in midway due to development costs, security bugs, improper marketing strategies, and unnecessary promotional issues.
Fear not, Crypto wallets will shower startups with numerous profit-generating streams once it is designed properly like a seamless vehicle that is well-oiled.
We are here with a detailed insight that offers you complete knowledge about ‘How crypto wallets make money?’
Before knowing about the revenue streams, first, get a clear view of…
How Do Crypto Wallets Work?
Knowing about the crytpo wallet’s working process may help startups to design the revenue streams to earn money. Let’s explore the user and admin dashboard working process in detail.
User Dashboard
- For the registration process, the user has to provide the email address, phone number, and other basic details. The registration norms and policies may change based on the country or the region.
- Then, the crypto wallet account is provided with private and public keys. The public key is more or less similar to a bank account number where it is visible to others for transactions. The private key is like a passcode or password which gives access to the crypto wallet.
- When funds are sent from one account to another, the user has to sign with the private key for a successful transaction.
- The transaction is then sent to the blockchain network where miners or validators of that specified network will confirm the transaction process.
- After the successful transaction, the data is updated on the blockchain network.
Admin Dashboard
- When new user activity is found, the admin analyzes the KYC verification and approves the user to get access to the crypto wallet.
- When the user requests the transaction, the admin then finalizes the transaction to proceed.
- After the approval from the admin, the transaction will be completed.
This is how a crypto wallet works for the user and admin dashboard. Based on the crypto wallet’s nature, the security protocols may change.
So, without any distractions, let’s dive into the important query of…
How Do Crypto Wallets Make Money?
Crytpo wallets (may be hardware or software modules) act as digital tools for managing, securing, and storing cryptocurrencies. Some of the common revenue-generating mechanisms of crypto wallets include,
Transaction Fees
One of the common ways to generate average revenue from crytpo wallets is transaction or trading fees. When a crypto user who trades within the exchange platform will pay a small amount for every successful transaction. This fee can be provided either for the blockchain or network or for the crypto miners (validators). The transaction fees differ based on various factors like transaction limit, speed, and efficiency.
Service Fee – Along with the transaction fee, service fees are also collected from the wallet admin for specialized features, better customer support, higher security measures, etc.
Network fee – The transaction fees are divided into portions between the wallet provider and the miners. For instance, if a crypto user wants to send Bitcoin, one part of the network fees is given directly to the Bitcoin miners, and the remaining portion is taken by the cryptocurrency wallet provider.
Listing Fees
Users who want to introduce their new cryptocurrencies into the crypto realm can list them in the crypto wallet platform. The cryptocurrency developers will pay a sum amount to the wallet admin in the name of ‘Listing Fees’. By paying this fee, the cryptocurrencies will be accessible to crypto investors.
Startups who aim to conduct crowdfunding (ICO, STO, etc) to raise funds for their projects will list their newly created tokens. Hence, this fee is considered a primary source of income for the crypto wallets.
Integration Cost – In addition to the listing fees, integration costs are collected to ensure the smooth functioning of the tokens. Also, the security protocols and technical interface are also checked thoroughly.
Deposit/Withdrawal Fees
Custodial wallets that are usually integrated into the centralized exchange will charge deposit and withdrawal fees from crypto users. Usually, these fees are fixed for each cryptocurrency.
Deposit Fee – This fee is covered where the cryptocurrencies are deposited in the crypto wallet or the crytpo exchange. It is charged for less common cryptocurrencies or crypto bought through fiat currencies.
Withdrawal Fee – Custodial crypto wallets charge withdrawal fees from crypto users after every successful transaction. The cost of crypto withdrawal changes based on various factors.
Network Fees – This is for the blockchain network to ensure smooth transactions. In the crypto wallet, the cost may be displayed for user consideration.
Staking Fees
Some popular cryptocurrency wallets offer crypto staking services for higher interest and profits. Rewards are provided for crytpo users who stake and a part of the commission will be taken by the crypto wallet admin. When the staked cryptos are distributed, the fees or the rewarding commissions will be collected.
Validator Nodes – The wallet providers who follow the PoS (Proof-Of-Stake) mechanism will earn a commission from staking rewards when users delegate their stake to these nodes.
Affiliate & Partnerships
The crypto wallet providers will partner with popular exchange platforms or other financial platforms to earn money. They earn revenue when users make trades or transactions through their affiliate links or integrate third-party services like fiat-to-crypto gateways.
Sponsored Listings – Crypto Wallets may display third-party links, certain tokens, blockchain projects, etc to gain user traction and engagement.
Premium Features
Crypto users who want advanced or enhanced security protection can register for the premium features option. The premium services can be offered in weekly, monthly, or yearly packages for users. Customizations can also be made in those features for the user dashboard.
Some of the premium features of the crypto wallet include lower fees, customizable fee structure, customer support, enhanced security options, etc. Even fiat-to-crypto or crypto-to-fiat conversion features are integrated as subscription features in many crypto wallets.
Hence, through these sources, revenue can be generated by the cryptocurrency wallet provider. Apart from that, many other add-on sources can also be integrated as per business strategies. In the next part, we have mentioned some of the add-on revenue streams.
Additional Revenue Streams Of Crypto Wallet
Additional revenue streams are integrated to enhance the probability of increased profits, and revenue.
Advertising
Crypto wallets can display third-party advertisements, within the platform. Even promoted messages, notifications, and banner ads are displayed for the third party. The third parties will pay a certain amount as fees which result in additional revenue for the wallet provider.
Educational Courses
Some of the Cryptocurrency wallets offer educational content and courses for fees that help users understand the tough blockchain and crypto concepts. This not only enhances the revenue but also creates a brand identity for the wallet platform.
Cross-Platform Integration
Cryptocurrency wallets can partner with DeFi platforms, DEX aggregators, or NFT marketplaces. Through this partnering wallet providers can earn money when users engage with crypto wallet services.
Token Launchpads
Startups who want to raise funds for their crypto projects will conduct popular crowdfunding methods. Crypto wallets help startups to launch their newly created tokens through launchpads.
these add-on revenue streams are for cryptocurrency wallets for users and for startups to earn money from various streams. Hence, it is evident that crypto wallet development also now become a profitable business idea for newbie startups in the competitive crypto market.
As the money-making factors of the crytpo wallet are explored, now is the right time to know more about the technical side of the crypto wallet creation. Crypto wallets can be created based on various development methodologies. One such easiest method is adopting a White label crypto wallet in which the features are already created and ready for deployment.
Pick a client-centric, user-friendly, and robust cryptocurrency wallet development company that help you launch a revenue-generating crypto wallet. One such company that stands out of the box in the crypto space is none other than Coinsclone. Beyond just delivering a crypto project, our team focuses on offering you a profitable business model.
Even if you are feeling like…
Why Choose Coinsclone For Cryptocurrency Wallet Development?
Coinsclone is a top-notch cryptocurrency wallet development company as their prior service in the digital landscape. With a proven track record of 200+ crypto projects, our developers have made a special spot in newbie startups’ minds. With our skilled set of developers, you can customize the exchange platform as per your business needs and requirements.
Developing a full-fledged crypto wallet is not a daunting task unless you focus on choosing the right crypto wallet development company. Coinsclone will be the best choice to kick-start your crypto business without any flaws. Contact our business team and ensure your success!
