Jun 12, 2023 - Economy

Magic looks to take the mystery out of web3

Illustration of a magician's hand holding a hat with a crypto cube appearing in it.

Illustration: Gabriella Turrisi/Axios

People use computers despite not knowing how they work — so if web3 could be made that useful and that simple, maybe it could be as ubiquitous.

Zoom in: That's Magic's mission — to make web3 useful and easy. Its business is effectively abstracting away the complexities of crypto and NFT ownership for other businesses with software.

Of note: Funding in this climate has been anything but easy. Though the startup is among the few shops in the crypto industry raising money — $52 million last month in a round led by PayPal Ventures — Magic CEO Sean Li told Axios it was among the "toughest" he's experienced.

  • "The whole team spent a lot of time getting this done so it’s a testament to their grit. There were a lot of rejections," he said.

How it works: Magic is basically an Easy Button for big brands to get into web3.

  • It's a wallet-as-a-service provider.
  • One of Magic's early rollouts was Magic Links, a passwordless login so that one could open a wallet by clicking a link in an email.

Details: Mattel is a Magic customer, which means when the crypto curious stumble upon their Hot Wheels or Barbie digital collectibles and go to create a wallet — Magic makes at least that experience a non-complicated one.

  • Be smart: The alternative is more complicated — using an app or a browser extension that might require a several-word password or seed phrase.

The big picture: Li thinks that for web3 to reach the masses, companies like his need to meet web2 folks halfway.

  • "Call it web 2.5 – It’s basically web2 companies that are looking into it, but don’t go fully web3 degen yet."
  • "Whenever there is a new piece of technology, it takes a lot to explain why it matters," he said.

💭 Our thought bubble, via Axios Crypto's Brady Dale: Blockchain startups will always be tempted to make user experiences so much like web2 that one might someday wonder if a lot of web3 isn't really just web2 with some magic space money pixie dust

What's next: Li wants to expand Magic's footprint and grow the number of its unique wallets, now around 20 million.

  • "We’re prescaling to make sure we can handle that traffic. We also have aspirations to expand to markets outside of the U.S.," he said.

The bottom line: The goal after finding utility, is to make it repeatable — that for Magic means striking more partnerships with the brands we may already know.

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