ConsenSys Expands MetaMask with Web3Auth Acquisition and Invests in Ethereum Treasury

The developer of MetaMask, ConsenSys, has acquired the Web3 infrastructure provider Web3Auth. The transaction amount remains undisclosed.

Founded in 2019, this platform caters to approximately 50 million end users and supports over 8,200 applications within the Web3 ecosystem.

The primary objective is to enhance the wallet user experience. Additionally, ConsenSys aims to tackle the issue of seed phrase management, which it identifies as «one of the main risks» associated with self-custody of assets.

According to the company, 35% of users do not back up their seed phrases, putting their funds at risk. The integration of Web3Auth will enable users to create and recover wallets using familiar Web2 login methods, such as social media authentication or device-based authentication.

This acquisition will also expedite the integration of non-EVM compatible networks into MetaMask, specifically Solana and Bitcoin. In the future, this will facilitate seamless cross-chain transfers without gas fees. Full support for the first cryptocurrency network is expected to be launched in the third quarter.

Developers will gain access to tools for embedding wallet SDK and key management, simplifying the onboarding process for new users. ConsenSys anticipates that this will help «bring the next billion users into Web3.»

The integration will occur in stages, starting with developer tools. A complete rollout of all features is anticipated within a few weeks, by the end of summer.

Simultaneously, ConsenSys led a private stock placement worth $425 million for SharpLink Gaming.

The latter is an American sports betting platform.

SharpLink plans to issue shares worth $1 billion to establish the largest Ethereum treasury in the market. This will allow them to join other publicly traded companies employing a similar strategy.

The funding will provide SharpLink the means to acquire Ethereum as a primary reserve asset. The company also intends to partake in staking and DeFi initiatives.

To manage its Ethereum strategy, SharpLink has forged partnerships with firms ParaFi and Galaxy Asset Management.

Upon the completion of the transaction, ConsenSys CEO Joseph Lubin will assume the role of Chairman of the Board at SharpLink.

Other participants in the funding round included ParaFi Capital, Electric Capital, Pantera Capital, Arrington Capital, Galaxy Digital, Ondo, White Star Capital, GSR, Hivemind Capital, Hypersphere, Primitive Ventures, and Republic Digital. Additionally, SharpLink’s CFO Robert DeLucia contributed to the funding.

It is worth noting that in November 2024, ConsenSys established the non-profit organization Linea Association to promote the development and decentralization of L2 solutions based on ZK-Rollups for Ethereum.