What is WalletConnect Network?

(Source: WalletConnect)

WalletConnect Network is a chain-agnostic, high-performance decentralized connection protocol. It utilizes an innovative rendezvous-hashing architecture to achieve globally distributed operation of the relay database, while supporting end-to-end encrypted message transmission. These features make WalletConnect a key platform for future cryptocurrency transactions, social interactions, payments, and even identity verification. Currently, the network consists of two main types of nodes:

• Service Nodes: Responsible for storing and retrieving messages, maintaining availability and performance. Nodes must stake WCT and earn rewards based on performance metrics (uptime and latency).
• Gateway Nodes: Handle high-frequency connection traffic and data forwarding, ensuring the UX experience is on par with Web2.

The roles of participants and ecological dynamics in the WalletConnect Network

Participants in the WalletConnect Network are diverse, and each group can participate in network operation and governance by holding WCT or providing infrastructure.

• Node operators: Provide infrastructure, ensure stable message transmission, and earn efficiency and staking rewards.
• Wallet developers: Integrate through WalletKit to provide high-quality UX and earn certification and additional rewards.
• Application developers and SDK: 70% of the traffic comes from SDK, and these tools will also receive a one-time WCT allocation.
• End users: Participate in governance through voting, testing new features, and submitting UX feedback.

Tokenomics of WalletConnect Network

The initial total supply of WCT is 1 billion tokens, which are non-transferable in the early stages, aimed at stabilizing the network, preventing speculative trading, and allowing participants to focus on governance and development. The specific end time of this non-transferable period will be determined by community governance. The distribution of WCT is centered around fairness and long-term orientation, designed as follows:

• WalletConnect Foundation (27%): For collaboration, reward programs, infrastructure grants, and network operations.
• Airdrop plan (18.5%): Allocated to users, nodes, applications, and wallets, it will be distributed in multiple seasons, with some available for collection in the early stages of the mainnet launch.
• Team Members (18.5%): Allocated to the WalletConnect and Reown teams, with a four-year linear unlock and a one-year lockup.
• Node and User Rewards (17.5%): Used for staking and operational performance incentive mechanisms, to be gradually released annually.
• Early supporters (11.5%): Provide a quota for early resource providers, also with a 1-year lock-up period and a 4-year unlocking period.
• Development Fund (7%): Supports continuous upgrades of the protocol and SDK.

(Source: whitepaper.walletconnect)

WCT has a no-inflation plan, meaning that there will be no new coin issuance in the next three to four years, and all network incentives will come from the original distribution.

The role and function of WCT

WCT plays four major roles in the network:

1. Governance: WCT holders can vote on network parameters, fee structures, node settings, and future proposals to promote community co-governance.
2. Staking: Participate in node operation or validation to earn staking rewards, and increase weight based on the lock-up time.
3. Reward Distribution: Used to reward node operators, wallet developers, and SDK contributors, supporting overall network performance.
4. Network Fees: Currently not enabled, but in the future may be paid by the application side to support the sustainable operation of the network.

Staking mechanism

Participants who wish to operate a node must stake at least 100,000 WCT and lock it for at least 52 weeks to become a qualified node. Stakers can receive staking rewards based on the following conditions:

• The longer the lock-up period, the higher the weight (up to a maximum of 2 times enhancement for a four-year lock-up).
• The earnings of all stakers will be distributed based on the proportion of their individual weight in the total weight of the entire network.
• If a node performs poorly (such as low uptime or high latency), it may face slashing penalties, be temporarily ineligible for rewards, and be removed from the active node set.

Why is WCT important?

WCT is not just another governance token; it is a component of the Web3 infrastructure that enables the WalletConnect Network to truly move towards decentralization, sustainability, and trustlessness. Unlike the monopolistic service model of traditional centralized API providers, WalletConnect returns control to the community and users through incentives, governance, and transparency, avoiding data monopolies and censorship risks. As Web3 applications expand from transactions to social, payment, and identity verification, WCT will become a common protocol asset for these new scenarios.

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Summary

WalletConnect is reshaping the user experience of Web3, moving beyond just peer-to-peer connections to a scalable, composable, decentralized user interaction network. WCT, as the token of this system, not only supports the overall operation but also carries governance, participation, and value capture. This is a long-term revolution about open network sovereignty, user autonomy, and the future of protocols.