MetaMask Considers Native Token Amid Regulatory Shifts

MetaMask, the most popular Ethereum wallet with over 30 million monthly active users, is considering the launch of a native token. Co-founder Dan Finlay hinted at this possibility in a recent interview, stating that while no concrete plans have been made, the idea is under consideration. Finlay emphasized that any official announcement regarding a token launch would be made directly through the MetaMask wallet to protect users from fraudulent schemes.

Speculation about a MetaMask token, codenamed MASK, began in 2021. That same year, MetaMask’s parent company, ConsenSys, started experimenting with community-driven governance based on tokens. The speculation was further fueled by a tweet from ConsenSys CEO Joseph Lubin, who questioned “Wen $MASK?” In 2022, Lubin stated that the aim was to encourage “gradual decentralization” in ConsenSys projects, with a decentralized autonomous organization (DAO) to distribute funds, not rule.

Finlay indicated that a changing regulatory environment could provide opportunities for a safer token launch. He mentioned that with a more permissive administration, there’s room for safer token launches. However, he warned that securities laws are a barrier, as many token offerings continue to exist in a legal no-man’s land. Finlay expressed concern about scams arising from speculation, stating that MetaMask would never use unofficial channels such as text messages or email for token-related announcements. Official updates would only be reported at MetaMask’s site or inside the wallet itself.

MetaMask is also facing competition from other wallets such as Rainbow and rabby, which are gaining traction. This competition has prompted MetaMask to improve its user experience. Finlay recognized the challenge, stating that the company is in a permissionless space where competition is fierce. Over the last year, the MetaMask team has deployed interface enhancements to stay ahead. The dominance of the wallet arises from its role as a gateway to decentralized applications on Ethereum. Its potential token could deepen users’ interaction with its ecosystem, introducing community-driven features and/or incentives.

Discussions about a token date back to a 2021 developer call, in which engineer Erik Marks suggested the community ownership method over a token. Later, Lubin characterized the DAO as a funding mechanism rather than a governance body with safeguards from exploitation by opportunistic investors. Finlay reiterated that any token would not become a “quick profit scheme” according to MetaMask’s long-term decentralization goals.

The regulatory environment remains a primary concern. Finlay observed that while a more laid-back U.S. administration would be better for innovation, securities laws still exist. He cited the former Chair of the SEC, Gary Gensler’s position on how many of such launches look like securities offerings and should be treated meticulously. MetaMask’s hesitations stem from its concern for user trust. In attempting to protect its reputation in the face of increasing competition and changing regulations, the company focuses on official channels and warns of scams.