Vitalik Buterin urges Web3 wallets to improve security, privacy

Ethereum co-founder Vitalik Buterin urged Web3 wallet developers to implement features improving privacy and security in a Dec. 3 blog post.

“[A] user only benefits from any decentralization, censorship resistance, security, privacy, or other properties that Ethereum and its applications offer to the extent that the wallet itself also has these properties,” Buterin said in the blog post.

He also proposed ways to ease transfers among Ethereum’s layer-2 (L2) scaling networks, such as Optimism and Arbitrum.

Ethereum hosts dozens of L2 scaling networks, which collectively handle more than $50 billion in total value locked (TVL), according to data from L2Beat.

Related: Vitalik: L2s that aren’t at least ‘stage 1’ are dead to me

Better privacy, security

Web3 developers must integrate privacy features into all wallets, rather than relegating privacy to a handful of specialized wallets, Buterin said.

“[U]p until now, making private transfers on Ethereum has required users to explicitly download and use a ‘privacy wallet’,” he explained, adding:

“This adds great inconvenience and reduces the number of people who are willing to make private transfers. The solution is that private transfers need to be integrated directly into wallets.”

One way to do this is for a wallet to “store some portion of a user’s assets as a ‘private balance, in a privacy pool,” which the wallet would use to fund transfers, he said.

On Nov. 26, a United States court ruled in favor of Tornado Cash, saying the US Treasury Department overstepped in sanctioning the privacy protocol. This potentially paves the way for more onchain privacy features.

Buterin also recommended integrating multisignature authorization — where several signers must authorize transactions — into all Web3 wallets for added security.

Cross-L2 transfers

Additionally, Buterin urged Web3 wallet developers to add features to simplify transfers among L2 networks, including sending tokens directly to a user’s wallet on a different L2.

“Your wallet should be able to give you an address that (following the style of this draft ERC) looks like this: [email protected],” Buterin said, referring to the Optimism L2 suffix appended to the wallet address.

“When someone (or some application) gives you an address of this format, you should be able to paste it into a wallet’s "to” field, and click “send”. The wallet should automatically process that send in whatever way it can,” he said.

Since September, Buterin has been pushing Web3 developers to hasten layer-2 decentralization, stating that he only plans to acknowledge scaling solutions at “stage 1” of his decentralization scale.

In a Sept. 12 X post, Buterin said he takes this “seriously” and that in 2025 he only plans to publicly mention layer-2 networks that have an active fraud-proof or validity-proof scheme in place.

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