We are excited to announce Daylight has raised $6M, led by USV and co-led by 1kx.

Daylight is the “onchain for you” API that powers the Home and Discover tabs of major wallets like Coinbase Wallet, MetaMask, Zerion, and OKX Wallet with personalized transaction recommendations: mints, claims, quests, and more.

It’s like the home tabs of Netflix or Spotify, but with things to do onchain instead of movies or music. Every month, we make transaction recommendations to >6M addresses.

We are grateful to be backed in this round by USV and 1kx, whose experience in internet and crypto networks will give us a significant edge as we grow the Daylight network. Prior pre-seed investors Framework Ventures and Chapter One also participated in this round, as well as new angels including evgeny.eth (Co-Founder, Zerion), vadim.eth (Co-Founder, Zerion), corbin.eth (early Consensys), idobn.eth (Co-Founder, Blockaid), razniv.eth (Co-Founder, Blockaid), nir.eth (Co-Founder, Yup), and Shreyas Hariharan (Co-Founder, Llama). This round brings the total raised to $9M.

With this new capital, we are hiring staff-level backend engineers to scale from 6M monthly addresses to tens of millions, expand beyond mints, quests, and claims into new recommendation categories, and leverage our offchain data to improve our algorithm.

We are just getting started - powering the front doors of the onchain world is the first step in our mission to drive 5% of all onchain GDP.

Work at Daylight

We are looking for staff-level backend engineers with deep experience designing and scaling REST APIs. Our API serves tens of thousands of requests per second, summarizing millions of rows of offchain data and terabytes of onchain data in hundreds of milliseconds.

The problems we work on are meat-and-potatoes software engineering: writing code understandable to others; optimizing PostgreSQL queries; tracing code paths for bottlenecks; getting the most out of AWS infrastructure.

These are some things we believe in as a team:

• Prioritizing the problems that most impact our goal

• Minimizing distractions

• Writing good tests

• Communicating openly and directly

• Everyone, and especially engineers, thinking about product and API design

More details can be found on our careers page.

Integrate with Daylight

If you want to add an “onchain for you” experience to your app, learn more here and reach out: kyle@daylight.xyz. We drive 5% of our partners’ transacting users, and could do the same for you.

If you are a creator or app and want to reach your audience across the Daylight network, learn more here and submit your projects here (it’s free!). We’ve driven hundreds of thousands of transactions for others like you.

If you are a creator tool (for creating mints, claims, quests, tokens, etc) and want to help your creators reach new users, learn more here and reach out: kyle@daylight.xyz. We have similar integrations with tools like PartyDAO, Highlight, Zora, and more.

To understand our “Onchain for you” experience (and see if you have any unclaimed airdrops yourself), check out Daylight’s own web app: daylight.xyz.

Yes, obviously we need more apps. But there is a faster and easier parallel path that no one is talking about:

10% of the 100M monthly CEX traders will trade onchain as CEXs suddenly "list" every DEX-based token.

This was not possible before. Each token had to be reviewed and approved by a CEX's legal team, and very few tokens got approved. Liquidity for the token needed to be spun up on the CEX, and sometimes custody solutions for a new chain needed to be created.

But now - thanks to passkey-based web wallets like Coinbase Smart Wallet that 10x internet UX - it is not just possible but very compelling to CEXs.

In the same UI where you buy CEX tokens, you’ll be able to buy any DEX-based token. Exchanges will use DEX liquidity instead of spinning up their own. Users will spend from their CEX balance via a “magic spend” feature (no need to transfer balances to an onchain address first), and the purchased token will land in their onchain web wallet address.

All the token details pages that CEXs already have for every onchain token will go from dead ends to immediate pathways onchain.

This path requires no behavior change. It doesn’t require you to believe there’s a wider audience for minting, questing, etc - just that 10% of the 100M CEX traders will trade onchain to access more tokens without a new app download, backup phrase, funding a new address, or learning a new UI.

Coinbase will lead the way here, and most other exchanges will follow. They have every incentive to do so - it’s a large new revenue source:

• Can now “list” every token and capture swap fees (like MetaMask's swap revenue).

• Don’t need to build up their own liquidity (just use aggregated DEX liquidity).

• Can "list" tokens with much lower legal risk (see a judge’s recent ruling that Coinbase Wallet is not a broker).

• Can drive users to their own L2s (Base is making $60M / year).

These 10M onchain transacting users will have funded addresses powered by passkey-based web wallets that can be accessed anywhere on the internet outside of the originating CEX - no dapp browsers, WalletConnect, or browser extensions. 

This is a highly attractive user base for high caliber builders, and will accelerate our jump from 10M to 100M as more apps come onchain.

If you work at a CEX and want to discuss how to pull off this large new revenue source, please reach out: kyle@daylight.xyz.

Mint this article on Paragraph.

Thank you to Nir, Brenner, Jayme, Salvino, 0xDesigner, and Christopher for feedback on this article.

For the first time in crypto, there is a clear path to hundreds of millions of monthly transacting users.

It won’t happen for any of the hardcore crypto reasons like “democratizing finance” or “decentralization”.

It will happen because the upcoming crypto UX is 10x better than web2.

Current web2 UX is actually horrible - we are just used to it. We all have 30 different financial app accounts, wait days for bank transfers to clear, hunt for and paste email confirmation codes, rebuild our social graph in each new app, and generally grind our way through the Internet.

It’s as if we are calling a taxi dispatcher, hoping the taxi shows up, and then awkwardly paying afterwards in the middle of traffic, but soon we will be able to just tap a button on our phone. The crypto tools coming online now make the Internet so much more usable that people will demand this new level of user experience from apps, even if they never know it’s crypto under the hood.

The new toolset

Near-instant, low-gas L2s are an obvious level-up. But there are four more unlocks that will push us well over the threshold of “better than web2”:

Passkeys

Passkeys are passwords or private keys that you don’t have to remember, can’t be stolen, and don’t have to be typed in. They are easy to create, are stored securely on your devices and cloud backups, and can be called back up later to sign messages or transactions easily using your device’s PIN or biometrics. Amazon, Google, LinkedIn, Shopify, Uber, and more all support passkeys now.

Web Wallets

Web wallets are “cross-app embedded wallets”, a phrase coined by the Capsule team. These require no mobile app or browser extension to use, and pattern match what users expect from the Internet - SSO’ing into apps instead of the foreign and janky “Connect Wallet” flow of crypto today. These are made possible by passkeys, require no Sign in with Google / Apple / Twitter, and are cross-app so you can bring your identity with you around the Internet, unlike today’s embedded wallets.

Smart Contract Accounts

With smart contract accounts and paymasters, gas will often be abstracted away, multistep transactions will be bundled up into one, and account recovery will be much more user-friendly. Users will be able to grant very constrained permissions (“session keys”) to specific apps to transact for them (like they give some apps the ability to tweet for them) so transactions can be one click with no confirmation pop up.

Open Social Graphs

Like the promise of the original social apps, new social protocols like Farcaster are creating unruggable social graphs tied to users’ onchain addresses. This means any app that is aware of your address can build a personalized and social experience for you, as soon as you sign up.

The new UX standard

For the next Friend.tech, Nikita Bier special, or Airchat, you’ll “Sign in with [Coinbase / Capsule / MetaMask / Binance / etc]” as easily as you sign in with Apple or Google. 

There won’t be 24-word backup phrases, wallet app downloads, or broken WalletConnect flows. There won’t be any “input the 6 digit code we emailed you” or typing in 4 different passwords for your Google account until you get the right one. It’ll be a simple confirmation using a passkey - even easier than today’s standard SSO flow.

Immediately when you enter, the app will be personalized to you, pulling in your onchain history and your social graph. Gone will be the days of dark patterns pushing users to share their contacts - your friends will already be there.

You won’t need to wait 72 hours for your ACH transfer to hit the next Robinhood app. You won’t need to transcribe your credit card. You won’t need to copy and paste your new app-specific address into your other wallet to transfer funds. Your funds will already be accessible via your web wallet.

You’ll go from no Bracket.Game account to betting on the same sports teams as your friends in 30 seconds instead of 3 days. Visit-to-activation rates will go from 1% to north of 10%. Product managers everywhere will rejoice.

Crypto wins because it makes the Internet more usable, and every web2 app will be forced to adapt. Finally, we’ll all have a rational answer to “why build this on crypto?”.

P.S. What this means for you:

Exchanges must reinvent themselves onchain to keep up, creating web wallets for their userbases. See Coinbase Smart Wallet as an example (choose the blue “Create a wallet” button instead of “I already have a wallet” when prompted).

Wallet apps that want to appeal to the mass market should add a web wallet offering.

Embedded wallet providers should offer cross-app experiences, like Capsule today, Dynamic’s upcoming global wallet, or Privy’s upcoming global wallet.

Apps should stop trying to recreate their own social graphs and use Farcaster. 

In this cross-app address-aware world, acquiring users will be more efficient with affiliate programs like GMX’s and Lido’s, and dapp creators would be wise to add their own or use providers like Spindl and Fuul.

Thank you to Nitya Subramanian, Wilson Cusack, Noam Hurwitz, Itai Turbahn, Bobby Thakkar, and Morley Zhi for feedback on this article.

Mint this article on Paragraph.