In the ecological landscape of Web3, connection layer protocols serve as a crucial link between users and decentralized applications, often undervalued yet indispensable. Since its inception in 2018, WalletConnect (now rebranded as Reown) has quietly grown into a core infrastructure supporting over 40,000 decentralized applications (dApps) and more than 600 wallet interactions. This article will analyze this protocol layer project, which has facilitated over 2.2 billion connections, from four dimensions: ecological development, token mechanism, market performance, and future potential, along with the investment logic and risk boundaries of its governance token WCT.

WalletConnect started in 2018 as an open standard and network for establishing secure connections between decentralized applications and wallets. After several years of development, the project has expanded from a single QR code scanning protocol to an ecosystem integrating hundreds of wallets and applications, allowing users to perform various operations such as message signing, transactions, and logins through a single connection. In September 2024, the project team announced the renaming of WalletConnect Inc. to Reown, highlighting its goal of building a complete user experience layer (AppKit and WalletKit) for Web3. Reown remains a core contributor to the open-source WalletConnectNetwork, responsible for developing the SDK and introducing community governance and incentive mechanisms to the network.

Essentially, WCT is a tool that allows users to authorize, manage, and transact across different WEB3 entry points from the wallet side; it currently has a high coverage rate, helping to avoid security risks on the device side.

• Since 2018, the network has provided integration services for over 40k dApp projects and 600+ wallets, creating over 150 million connections. It will continue to maintain the WalletConnect Network after the rebranding.
• The 2024 annual report shows that the WalletConnect network's connection volume grew by approximately 340% from 2023 to 2024, increasing from 41 million to 179 million; the total connections for the year exceeded 221 million, with about 4.1 million unique active wallets.
• An article by Everstake indicates that as of April 2025, Reown has recorded over 220 million connections and over 35 million unique wallets using the protocol, completing a $13 million Series B funding round in January 2025.

Overall, the protocol coverage of WCT is considered its most important moat, but it has not formed an effective and sustainable business revenue; there is significant room for business growth and narrative, but the official team has not actively explored this, remaining focused on account management with low activity maintenance.

Since its launch, WCT has continued to hover at a low level; it has experienced slight fluctuations with market movements;

Currently, the circulating market value is $60 million, with a fully diluted valuation (FDV) of $300 million. From a business fundamentals perspective, this is a relatively sufficient valuation; however, from the market side/liquidity perspective, it seems to have sufficient market maker (MM) intentions;

The main risks associated with the WCT token, apart from a small release ratio, include a doubling release in November 2025 (current circulating supply doubling), and a lack of use cases and support; once rapid supply occurs, there may be significant volatility.

WCT is also clearly aware of the limited value support for the token, thus it has been advancing from the perspectives of product toolization/token empowerment; attempting to further enhance coverage and expand use cases on the user side;

• Positioning and Use: WCT (ConnectToken) is the governance and incentive token of WalletConnectNetwork, aimed at achieving decentralization and sustainable operation of the network. The Everstake article points out that WCT plays three main roles in the Reown ecosystem:
  • Governance: Token holders can participate in voting to decide on network upgrades, ecological fund usage, and other matters; on-chain governance will be introduced in 2025, allowing token holders to directly decide on key issues.
  • Staking and Rewards: Users can stake WCT to the network to earn rewards, and staking is also used to incentivize node operators, enhancing network security.
  • Ecological Funding: A portion of WCT is used as an ecological fund to provide grants to developers and creators, encouraging the building of applications on the Reown network.
• Supply and Distribution: The total supply of WCT is 1 billion. Cryptorank shows its main distribution as follows: foundation treasury 20.05%, team 18.50%, reward pool 17.50%, seasonal airdrop 13.50%, others (partners, strategic reserves, etc.) 30.45%, public offering 4.00%. As of May 2025, the circulating supply is approximately 186.2 million WCT (about 18.6%), with the remaining portion gradually released according to a multi-year unlocking plan.
• Governance and Participation Threshold: The initial airdrop phase primarily targeted users, developers, and partners participating in the WalletConnect network; token holders will need to participate in governance through Snapshot or on-chain voting in the future. Token holding and staking may be linked to rights (such as node operation qualifications, airdrop rewards, etc.).

WCT has relatively good recognition among retail investors, although it has not generated revenue, its exposure can attract and build buying interest; it is currently listed on major exchanges;

Additionally, it includes KRW trading pairs on Upbit, making it easy to quickly gather liquidity among retail investors in South Korea;

From the order book perspective, WCT's liquidity far exceeds its underlying asset level, showing good liquidity; for the USDT trading pair on Binance, a ±2% depth can reach over $1 million; daily trading volume is also quite good, but the maintenance cost is relatively high.

Summary

Overall, WCT has a solid background and investment scale, and the market's intentions are clear; after its launch, there has not been a significant price surge, and the theoretical valuation could reach an FDV of over $800 million;

However, the overall release is low, and there will be a one-time unlocking of excessive supply, making it unsuitable as a large position target;

Considering all factors, it is suitable as a medium to short-term focus target at key positions.

The above report data is edited and organized by WolfDAO (x:10xWolfDAO). If you have any questions, please contact us for updates;

Written by: WolfDAO

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