Understanding User Retention in Crypto Wallets Through Data

As the Web3 ecosystem expands, the number of crypto wallets and active users continues to grow.

More people are exploring decentralized finance (DeFi), NFTs, and tokenized communities. But there’s a problem: most users don’t stick around.

According to recent data, a large percentage of wallet users drop off shortly after onboarding, never returning after their first transaction. This article explores why user retention is such a challenge in Web3 and what wallet builders can do about it.

At ND Labs, we’ve worked on dozens of wallet projects and dApps, so we know what keeps users engaged and what pushes them away.

Why Retention Matters in Web3

User acquisition is relatively easy in crypto. Airdrops, referral programs, and hype bring in curious users every day. But retention — the ability to keep those users active — is where most wallets struggle.

The cost of poor retention is high:

Decreased lifetime value per user
Wasted marketing spend
Weak network effects
Poor token utility adoption

Improving retention is not just a UX issue — it’s core to the business success of any Web3 product.

Line graph comparing 1-day and 7-day user retention rates between Binance Web3 Wallet and Uniswap Smart Wallet

Key Wallet Retention Stats (Dune Report v2)

The Dune Wallet Report v2 reveals some eye-opening insights:

70% of users make just one transaction and leave.
Only 13% of new Binance Web3 Wallet users return after one week.
Smart wallets (e.g., Uniswap Wallet) perform better, but retention is still low overall.

Binance vs. Uniswap Wallet Retention

Metric	Binance Web3 Wallet	Uniswap Smart Wallet
Users Returning After 1 Day	~24%	~40%
Users Returning After 7 Days	~13%	~30%
Avg. User Actions (7 Days)	1.1	3.8
Engagement Boost from Quests	None	Active

Conclusion: Better UX and embedded engagement mechanics (like quests and swap flows) directly impact user stickiness.

Reasons Users Don’t Come Back

1. Poor UX

Seed phrases, network selection, gas fees — too complex for beginners
Vague error messages and confusing flows
Poor mobile responsiveness

2. High Entry Barriers

Difficult to fund wallets
Requires holding native tokens just to transact

3. Lack of Clear Utility

No post-onboarding direction
Limited in-wallet functionality (e.g., no access to dApps)

4. Lack of Feedback

No push notifications or updates
No gamified rewards, badges, or streaks

5. Social Isolation

No friend system, referral tracking, or community visibility
No integration with Telegram, Discord, or X (Twitter)

How to Build Wallets People Actually Use

1. Simplify the UX

Social/passkey logins (no seed phrases) are gaining traction as a smoother, safer entry point into Web3. More on this in Will Wallets Replace Passwords?
Gasless transactions + network abstraction
Plain-language transaction confirmations
Interactive onboarding flows and tooltips

Tip: If you’re building a wallet, start with Privy, Web3Auth, or UniPass for secure, seamless login experiences. For a broader perspective, refer to our Crypto Wallet Development Guide 2025.

2. Keep Users in the Loop

Push notifications for balance changes, rewards, airdrops
Reminder nudges for missed actions
Use tools like WalletConnect Push, Push Protocol, or Telegram bots

3. Integrate dApps Natively

In-wallet dApp directories
Built-in swaps, staking, NFT views, and quests
Embedded Telegram mini apps for smoother Web3 onboarding

4. Add Gamified Engagement

XP, streaks, milestones, and level-up systems
On-chain quests and badges via platforms like Layer3 and Galxe
- Layer3: Task-based engagement (e.g., “Bridge to Base” or “Mint NFT”) + XP
- Galxe: Campaign-based badges and verifiable social identity

If you’re launching a wallet, consider integrating quests or partnering with platforms like Layer3 or Galxe to keep users active and curious.

Let’s Talk

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Should You Build Your Own Wallet?

If your product requires:

Deep dApp integration
White-label branding
Custom login or onboarding logic
Full control of UX and features

Then yes — building your own wallet makes sense. Explore tools like Dynamic or Turnkey for embedded wallets with modular architecture. Or, let us handle the heavy lifting. At ND Labs, we offer a white-label non-custodial wallet solution tailored to your business and technical needs.