The Hidden and Concerns Behind Web3 Super Unicorn Phantom

Author: Zhou, ChainCatcher

The crypto wallet market in 2025 is playing out a brutal battle for market share.

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

Against this backdrop, Phantom’s performance has attracted attention. Early in the year, it raised $150 million, pushing its valuation to $3 billion. Since Q4, the project has launched its own stablecoin CASH, a prediction market platform, and a crypto debit card, attempting to find new growth points outside of trading services.

$30 billion valuation, from Solana origins to multi-chain expansion

Looking back at Phantom’s development history, in 2021, the Solana ecosystem was just exploding, and on-chain infrastructure was still imperfect. Traditional crypto wallets like MetaMask mainly supported Ethereum-based chains, with limited compatibility for other chains, resulting in some user experience shortcomings.

Typically, when creating a wallet, users must manually write down a 12 or 24-word seed phrase. Losing the key means assets can never be recovered, which makes many potential users feel cumbersome and risky.

Phantom’s three founders previously worked for years at 0x Labs (an Ethereum DeFi infrastructure project). They saw this opportunity and chose to start with Solana, creating a wallet with a simple interface and intuitive operation. Its core innovation lies in optimizing the backup process: offering multiple simple methods such as email login, biometric authentication, and encrypted cloud backups, replacing manual seed phrase writing and greatly lowering the entry barrier for beginners.

In April 2021, Phantom’s browser extension version launched, and within a few months, user numbers exceeded one million, becoming the first choice for Solana users. According to RootData, by July of the same year, Phantom, still in testing, received a $9 million Series A funding led by a16z; in January 2022, Paradigm led a $109 million Series B, with a valuation of $1.2 billion; by early 2025, Paradigm and Sequoia led another $150 million funding round, pushing its valuation to $3 billion.

As the scale expanded, Phantom then launched a multi-chain version, supporting multiple public chains including Ethereum, Polygon, Bitcoin, Base, and Sui, attempting to shed the label of “Solana-only wallet.” However, currently Phantom still does not natively support BNB Chain. Previously, some users complained that Phantom supported ETH but not BNB Chain, leading to missed opportunities for airdrops.

2025: Joys and Worries

2025 has been a rollercoaster for Phantom: on one hand, rapid breakthroughs in user and product metrics; on the other, a significant loss of trading volume share to exchange-based wallets.

Specifically, user growth has been impressive. Phantom’s monthly active users increased from 15 million at the start of the year to nearly 20 million by year-end, ranking among the fastest-growing independent wallets, especially with notable increases in emerging markets like India and Nigeria.

Meanwhile, Phantom’s assets under custody surpassed $25 billion, with peak weekly inflows reaching $44 million. Its annual revenue once exceeded MetaMask, and currently, Phantom’s total revenue is close to $570 million.

However, concerns about trading volume are also prominent. According to Dune Analytics data, Phantom’s share of the embedded swap market on the entire network dropped from nearly 10% at the start of the year to 2.3% in May, and further down to only 0.5% by year-end. Exchange-based wallets, leveraging fee advantages, rapid new product launches, and high airdrop subsidies, have attracted a large number of high-frequency traders. Currently, Binance Wallet accounts for nearly 70%, with OKX (wallet + routing API) combined making up over 20%.

A bigger concern in the market is Phantom’s deep binding to Solana. Data shows that 97% of Phantom’s swap transactions occur on Solana, and Solana’s total value locked (TVL) has fallen over 34% from its peak of $13.22 billion on September 14, now down to a six-month low of $8.67 billion. This directly drags down Phantom’s core trading metrics.

Facing these pressures, Phantom is investing resources into new products, attempting to open a second growth curve.

On the product front, Phantom has launched a series of differentiated features:

• In July, integrated Hyperliquid perpetual contracts, which, within about 16 days, drove approximately $1.8 billion in trading volume, generating nearly $930,000 in revenue through rebate mechanisms (builder codes);
• In August, acquired meme coin monitoring tool Solsniper and NFT data platform SimpleHash, further consolidating coverage of niche trading needs.
• At the end of September, launched its native stablecoin CASH, with supply quickly surpassing $100 million, and peak monthly transactions exceeding 160,000. Its core competitiveness lies in fee-free P2P transfers and associated lending rewards;
• In December, launched the Phantom Cash debit card in the US, supporting on-chain stablecoin payments and compatible with Apple Pay and Google Pay;
• On December 12, announced the launch of a prediction market platform, integrating Kalshi’s prediction market within the wallet, now open to eligible users;
• Simultaneously released a free SDK “Phantom Connect,” allowing users to seamlessly access different Web3 applications with the same account, further lowering onboarding barriers for developers and users.

Among these, the most attention-grabbing are the debit card and CASH stablecoin, as Phantom attempts to solve the “last mile” problem of crypto asset consumption.

Phantom CEO Brandon Millman has publicly stated that in the short term, they will not issue tokens, go public, or build their own chain. All efforts are focused on refining the product and turning the wallet into a financial tool accessible to ordinary people. He believes that the ultimate goal of the wallet race is not who has the largest trading volume, but who can bring crypto into everyday payments first.

However, the “last mile” of crypto payments is a tough road. Phantom is not the first independent non-custodial wallet to launch a debit card.

Previously, MetaMask partnered with Mastercard, Baanx, and CompoSecure in Q2 2025 to launch the MetaMask Card, supporting real-time conversion of cryptocurrencies into fiat for spending, and rolling out in the EU, UK, Latin America, and other regions. MetaMask’s card has broader coverage and launched earlier, but due to limitations on Ethereum and Linea networks, it is more expensive and slower, with user feedback indicating it is “convenient but used less.”

In comparison, Phantom’s debit card started later and is currently only available in limited regions in the US. Its actual adoption remains to be seen. Theoretically, leveraging Solana’s low fees, it might be more competitive in fee-sensitive emerging markets, but in terms of global coverage and merchant acceptance, it still lags significantly behind MetaMask Card.

Regarding stablecoins, if CASH cannot generate sustained network effects, it may follow the path of other native stablecoins in wallets, such as MetaMask’s native stablecoin mUSD, which quickly surpassed $100 million 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 Kalshi prediction markets to retain high-end users; on the consumption side, it bets on CASH stablecoin and debit cards to truly bring on-chain assets into daily life.

This dual-track approach of “derivative trading + consumer payments” is Phantom’s self-rescue amid the Matthew effect in the wallet sector. It is not only seeking a second growth curve but also defining the ultimate fate of independent wallets.