Encrypted wallet extended to include DeFi central trading and earnings functions, now integrated within the application
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1h ago
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MetaMask, Phantom, and Jupiter are integrating transaction, lending, payment, and earnings functions into their wallet applications. The article outlines the different approaches of each company regarding transaction fees, routing, gasless transactions, stablecoin earnings, as well as US regulations and taxation.
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Cryptocurrency wallet providers have incorporated trading, lending, and payment functions into their respective applications. Phantom charges a fee of 0.85% for most exchanges, while MetaMask promotes up to 4% annualized floating returns through Money Account.

  • Phantom and MetaMask charge a handling fee for exchanges, while Jupiter separates the routing cost from additional wallet fees.
  • MetaMask's Money Account integrates stablecoin earnings, card transactions, and consumption into the same balance.
  • The Auto-Earn of Jupiter will deposit the selected stablecoins into the lending vault and control each token separately.
  • Gasless Transactions can deduct network costs from the tokens being traded, rather than charging a separate fee.
  • US tax guidelines treat transfers between cryptocurrency exchanges and a user's own wallet differently.

MetaMask, Phantom, and Jupiter all describe products that combine self-management with financial services, but their documentation shows that they adopt different approaches regarding transaction execution, lending, and transaction fees.

According to the Money Account guidelines of MetaMask, users still control their own funds, while deposits earn returns through a third-party DeFi platform. The exchange documentation of Phantom lists the transaction costs within its application, whereas Jupiter describes a Solana wallet that is connected to its own routing and lending infrastructure.

Encrypted wallets integrate earnings, consumption, and transactions into one.

On June 30th, MetaMask launched Money Account on Monad. As previously reported by crypto.news, this product supports converting stablecoins into mUSD and also provides trading and card-swiping payment functions.

Consensys stated during its launch that deposits would be placed into a smart contract treasury managed by Veda and screened by Steakhouse Financial. The company indicated that the first lending destination is Morpho, and subsequently, it will also connect to the Aave market.

In the current help guide, MetaMask promotes an annualized yield of up to 4%, stating that this rate may change daily depending on market conditions. According to the guide, the displayed yield is calculated after deducting product fees and network fees, while transferring funds to other networks or certain trading accounts may incur additional network fees.

For cardholders in eligible regions, MetaMask indicates that the balance of Money Account can be directly used for consumption. The documentation also distinguishes between mUSD held in a regular account and mUSD deposited into Money Account; the former does not accrue interest automatically.

In Jupiter Wallet, the provider's Auto-Earn documentation describes another arrangement: users can enable the function of automatic deposit into the Jupiter Lend revenue treasury for a single stablecoin.

According to this guide, the supported assets include USDC, USDT, JupUSD, EURC, USDG, and USDS. As long as the wallet is unlocked, the extension will check the balance every hour and deposit all the tokens into it once the balance of the enabled tokens reaches the selected threshold.

Jupiter indicates that this feature is applicable to wallets that use mnemonics or private keys, and does not include Jupiter ID wallets. The product guide further states that disabling Auto-Earn will stop new deposits; however, funds that have already been invested in lending will remain in those wallets until they are withdrawn.

For the funds deposited into Aave, the supply guidelines of this protocol explain that the tokens will enter a smart contract liquidity pool, from which borrowers can use these funds. Aave indicates that the supply interest rate will vary according to borrowing activities and governance settings, rather than remaining fixed.

In the risk document, Aave warns that software vulnerabilities, flawed price predictors, and changes in the value of collateral can all affect the protocol. The document lists audits, bug bounties, and adjustable risk controls as safeguard measures.

Built-in exchanges bring different fees and routing options.

According to the fee guidelines of Phantom, a charge of 0.85% applies to most exchanges. Exceptions include certain recharges that go into the balance of perpetual contracts.

Phantom lists network fees separately and describes price impact as another cost associated with trading on-chain liquidity. For cross-chain exchanges, the guidelines state that bridge provider fees are currently included in the price impact, but users can view provider information before confirmation.

In the exchange guide for MetaMask, the provider lists a fee of 0.875% and explains that their service will search decentralized exchanges and exchange protocols. MetaMask indicates that they do not provide liquidity directly themselves.

In contrast, the transaction fees listed in the extension wallet documentation for Jupiter range from 0% to 0.5%, depending on the pair being traded. According to the product page for Jupiter, no additional platform fees are charged on top of the routing fees.

In terms of enforcement, MetaMask indicates that it will conduct private auctions for transactions that meet the criteria, rather than placing them in a public queue waiting for confirmation.

In the same guide, MetaMask explains that robots can insert transactions before and after user orders to profit from price changes, a practice known as a sandwich attack. The provider states that private routing can reduce the risk of harmful transaction sequencing, but it cannot guarantee complete protection in all situations.

Jupiter also describes the built-in transaction sorting attack protection provided by Ultra; Ultra is the routing engine used by its wallet.

Gasless How tools change the cost of users' payment networks

Through the gasless-swap function, when a user lacks the native assets of the chain, MetaMask will deduct the network costs from the tokens that are being exchanged.

The supported networks listed in its documentation include Ethereum, BNB Smart Chain, Linea, Base, Arbitrum, and Polygon. MetaMask indicates that this feature cannot be used when the transaction value is lower than the gas cost.

For Solana transactions that meet the conditions, Jupiter indicates that the wallet will bear the network costs and recover an equivalent amount from the received tokens. Its product documentation excludes NFT transfers, limit orders, and regular orders from gasless execution.

The exchange guide for Phantom also describes that on networks that support Solana and are compatible with Ethereum, when the balance of native tokens is insufficient to cover network fees, gasless transactions can be used.

Wallet transactions trigger regulatory and tax issues in the United States

Phantom The investment in trading tools also extends to staffing. In a report dated July 1st, CEO Brandon Millman stated that after the team behind Ventuals closed the perpetual markets based on Hyperliquid's OpenAI and Anthropic, the company has hired three of them to join the trading and data teams.

In terms of US regulation, Phantom and Hyperliquid Policy Center requested the establishment of more targeted CFTC rules in a submission filed on July 10th.

According to this document, these organizations believe that developers of decentralized trading software should not automatically register as exchanges or clearing houses. They also argue that non-hosted wallet interfaces should not be considered referral brokers.

For US token holders, IRS indicates that regardless of whether taxpayers receive information statements, any taxable digital asset income, gains, and losses must be reported.

The virtual currency guidelines of this institution distinguish between transfers between exchanges and transfers between wallets owned by the same person. According to IRS, converting cryptocurrencies held as capital assets into another cryptocurrency requires confirmation of capital gains or losses; however, transfers between a user's own wallets are generally not taxed.

As wallet services expand, so does transaction control.

In August, MetaMask launched Agent Wallet, allowing AI agents to conduct transactions within the user-defined expenditure limits and protocol permissions.

According to MetaMask, its default Guard Mode will pause transactions that violate these rules and wait for manual approval. The company stated that eligible transactions will undergo simulation and threat checks, and eligible losses can receive up to $10,000 in compensation per month.

"The agent can act, but it acts within the boundaries set by the user," MetaMask stated.

In terms of its own security infrastructure, Phantom announced the acquisition of Blowfish, integrating its anti-fraud team into the wallet company.

The extension documentation for Jupiter claims that its transaction protection feature can detect hidden transfers inserted by malicious browser extensions. This documentation also lists support for Ledger, Keystone, and Trezor hardware wallets, while indicating that the code for this extension is not currently open-source.

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