The Truth About MetaMask: Who Owns It and Why It Matters for Your Crypto

You’re probably using MetaMask to manage your cryptocurrency and interact with the Ethereum blockchain (and, nowadays, many others), but have you ever stopped to think about who’s behind this popular wallet? It’s owned by ConsenSys, a blockchain software company co-founded by Joseph Lubin, one of Ethereum’s co-founders. 

While ConsenSys has received significant funding from institutions like JP Morgan, it still maintains control over MetaMask’s development and direction. But what does this mean for you, the user? Does it impact the security and decentralization of your transactions? Let’s explore the implications of MetaMask’s ownership.

What is Metamask?

One of the most widely used digital wallets in the web3 space, MetaMask is a self-custodial wallet that allows you to manage your identity and digital assets within the Ethereum blockchain and other decentralized platforms.

As a leading innovator in the web3 space, MetaMask allows you to interact with decentralized applications (dApps) seamlessly, thanks to its accessibility as both a browser extension and a mobile application.

With over 30 million monthly active users as of February 2024, MetaMask is one of, if not the most popular digital wallet in the crypto community. Its huge user base shows how effective it is in simplifying interactions with the blockchain ecosystem.

You can leverage MetaMask swaps to find ideal token exchange rates across decentralized exchanges (DEXs) for Ethereum-based assets, with a service fee of 0.875%.

MetaMask enables you to tap into the vast potential of decentralized finance (DeFi) and non-fungible tokens (NFTs), all while maintaining control over your digital assets.

Simply put, if you’re a fan of using dApps and DEXs, you’ve probably used MetaMask.

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Who owns Metamask?

MetaMask is owned by ConsenSys, a blockchain software company founded by Joseph Lubin, one of the co-founders of Ethereum. 

JP Morgan’s stake in ConsenSys is less than 10%, and the company has publicly addressed claims suggesting otherwise.

MetaMask operates under a custom license, having shifted from an open-source model to a proprietary one in August 2020. With major investors like ParaFi Capital, Temasek, SoftBank Vision Fund 2, and Microsoft on board, ConsenSys continues to innovate in the web3 space through MetaMask and its other products.

The role of ConsenSys in the Ethereum ecosystem

Okay, so ConsenSys owns MetaMask, but what do we know about this company? As you investigate the world of decentralized applications and blockchain technology, you’ll notice ConsenSys’s presence is ubiquitous.

Founded in 2014, ConsenSys has established itself as a leading blockchain software company, dedicated to developing infrastructure and tools that facilitate seamless interactions with dApps and crypto services.

ConsenSys’s impact on the Ethereum ecosystem is huge. Here are three key aspects of its role:

1. Creator of leading self-custodial wallet: ConsenSys developed MetaMask, a widely used self-custodial wallet that enables users to manage their Ethereum-based assets and interact with dApps.
2. Infrastructure provider: ConsenSys built Infura, a scalable infrastructure platform that allows developers to connect their applications to the Ethereum network.
3. Supporter of decentralized applications: ConsenSys supports over 1,000 dApps, empowering a global community of builders and developers within the Ethereum ecosystem.

How ownership affects MetaMask’s development and privacy policies

As you consider ConsenSys’s role in the Ethereum ecosystem, it’s natural to wonder how the company’s ownership of MetaMask influences the wallet’s development and approach to user privacy. 

You might expect a wallet developed by a prominent blockchain software company to prioritize decentralization and user autonomy. However, the facts suggest that the relationship between ownership and development decisions is a bit more complicated.

ConsenSys’s ownership of MetaMask has led to a proprietary software model, which raises concerns about the platform’s alignment with the decentralization ethos of Web3.

You’ll notice that default settings in MetaMask expose identifiable user information to data collection networks, which somewhat contradicts the platform’s stated goals of enhancing user autonomy and privacy.

Also, MetaMask’s centralized transaction processing, managed by ConsenSys, highlights the tension between the company’s ownership and the platform’s commitment to decentralization.

It becomes clear that ConsenSys’s influence has shaped MetaMask’s approach to user privacy and decentralization. This has started ongoing conversations about the trade-offs between usability, privacy, and innovation.

Potential risks for users

Even though MetaMask is considered decentralized, when you use it, you’re entrusting ConsenSys with some degree of control over your digital assets and personal data.

But how much control does ConsenSys actually hold, and what implications does this have for user privacy, especially in the face of regulatory pressure?

Let’s take a look at MetaMask’s data policies and the potential risks of centralization in a decentralized tool.

Risks of centralization in a decentralized tool

ConsenSys’s proprietary model and ownership of MetaMask create potential risks for users. Here are three key concerns:

1. Transaction processing: MetaMask processes transactions through a centralized service owned by ConsenSys, which can potentially expose your data to tracking and data collection networks.
2. Default settings: Despite being a leading self-custodial wallet, default settings in MetaMask have been criticized for compromising user privacy. This might reflect a fundamental flaw in its design.
3. Ownership structure: With less than 10% ownership of ConsenSys by JP Morgan, some believe that funding from major financial institutions still contributes to the centralization risks faced by users of MetaMask.

These concerns highlight the need for you as a user to be aware of the potential centralization risks associated with using MetaMask.

Key points on MetaMask’s data policies

Several key points regarding MetaMask’s data policies raise concerns about the type of data collected and who can access it.

You should know that MetaMask collects identifiable user information through default settings, which may expose data to collection networks and trackers.  We already mentioned this, but why does this matter?

It raises significant privacy concerns, as your data can be accessed by third-party networks due to MetaMask’s integration with dApps and reliance on external APIs.

Regular reviews and adjustments to data policies would be a great idea to mitigate risks associated with user data collection and the potential for privacy violations. 

Implications for user privacy in the context of regulatory pressure

As mentioned, MetaMask’s data policies raise concerns about user privacy, and these concerns become even more pronounced in the context of regulatory pressure.

Here are some of the most pressing risks that could potentially be brought to the table:

1. Data sharing risks: Regulatory pressure can lead to changes in MetaMask’s privacy practices. This can potentially result in more data being shared, i.e. less anonymity for users.
2. Security threats: Malicious apps mimicking MetaMask have been reported, which is an extra complication in privacy protection amidst regulatory scrutiny.
3. Loss of control: As a user, you may have limited control over your data and how it’s used, which can erode trust in the Web3 environment.

Alternatives to MetaMask: What other options are out there?

As you weigh the pros and cons of using MetaMask, realizing that it’s not the end-all-be-all crypto wallet, you may start to think about what other options are available.

There are many great crypto wallets out there. Some examples include Trust Wallet, Coinbase Wallet, and Atomic Wallet (to name a few), each offering unique features that may better suit your needs.

For the Coinbase Wallet, we covered the differences between the two in our MetaMask vs. Coinbase Wallet comparison.

Other popular crypto wallets

Beyond MetaMask, a plethora of alternative crypto wallets offers users a range of features and functionalities to manage their digital assets effectively.

As you explore the world of crypto wallets, you’ll discover a wide range of options available, including some of the world’s leading wallets. Of course, no wallet is perfect and, if undergoing severe scrutiny, it’s very likely all of them would have certain imperfections. Still, that doesn’t mean we should stop looking.

When evaluating the alternatives, consider the following popular options:

1. Trust Wallet: With support for over 100 blockchains, Trust Wallet is a popular choice among users looking for a mobile wallet with decentralized exchange capabilities and dApp integration.
2. Coinbase Wallet: If you’re already using the Coinbase exchange, the Coinbase Wallet is a natural choice, offering a user-friendly interface for accessing decentralized applications and storing private keys.
3. Atomic Wallet: With support for over 500 cryptocurrencies, Atomic Wallet is a non-custodial wallet that focuses on security, privacy, and atomic swaps. It’s a great option for users seeking an all-encompassing wallet solution.

These wallets, among others, provide a range of features and functionalities that cater to different user needs, and they give you options for finding the best fit for managing your digital assets.

Of course, as a side note, there are also hardware wallets, a.k.a. cold wallets, such as Ledger Nano S or Trezon Model One, which come with their own set of pros and cons. You can even use hardware wallets in combination with MetaMask.

Comparing MetaMask to other popular software wallets

When to consider switching wallets and what to look for in a secure crypto wallet

Switching wallets isn’t always an easy decision, but there are several scenarios in which moving to a different wallet can be a good move. 

When searching for a secure crypto wallet, these are the most important factors to keep in mind:

• Enhanced privacy needs can be a key motivator. If you’re particularly sensitive about data collection, MetaMask’s data policies might feel intrusive, especially with the recent attention to data sharing and tracking. Wallets like Trust Wallet are known for their stronger privacy protocols, and they may be preferable if you prioritize anonymity and tighter control over your personal information.
• Wider asset support is another common reason to consider switching. MetaMask’s compatibility with EVM-compatible blockchains serves a wide range of Ethereum-based users, but if your portfolio includes assets on other blockchains like Bitcoin or Solana, you may find this limiting. Also, if you’re heavily involved in NFTs or DeFi protocols, you may benefit from wallets with features designed for these use cases.
• Improved security features are another factor that could drive a decision to switch. MetaMask, while popular, can be vulnerable to phishing attacks if users aren’t vigilant. Wallets with additional layers of protection, like hardware integration (such as Ledger and Trezor) or advanced security models (like Zengo’s MPC technology), can provide peace of mind. 

Should you use Metamask?

As you weigh the pros and cons, you’ll find that MetaMask’s compatibility with the Ethereum network is a significant advantage. With MetaMask, you can easily manage your digital assets and identities while interacting with dApps.

You should use MetaMask if you value convenience and flexibility. The wallet is available as both a browser extension and a mobile app, so you can access your assets seamlessly across different devices.

Also, MetaMask’s Swaps feature enables you to aggregate decentralized exchanges for ideal token exchange rates, ensuring competitive pricing. Simply put, MetaMask is very convenient and easy to use, and it offers lots of quality-of-life functionalities.

However, MetaMask does have its limitations and may not suit everyone’s needs. Its support is largely limited to Ethereum and EVM-compatible networks, so users with assets across multiple blockchains, like Bitcoin or Solana, may prefer wallets like Trust Wallet or Atomic Wallet. 

Privacy concerns also arise due to MetaMask’s data policies, which may feel intrusive to those who value being anonymous.

Additionally, MetaMask’s high visibility makes it a frequent target for phishing attacks, so users seeking added security layers might look to wallets with multi-signature or hardware integrations.

The bottom line

You’ve now got the lowdown on MetaMask’s ownership. With ConsenSys holding the reins, you may want to think about whether you continue to trust MetaMask blindly. 

Let’s make something clear though. MetaMask is great at so many things, and so far, they’ve mostly done right by their users. But that doesn’t mean that we shouldn’t think critically about who owns the wallet where we keep our funds.

Should you use MetaMask? That’s for you to decide. If you value convenience, flexibility and ease of use, MetaMask has got you covered. However, if you prioritize security above all else, there’s nothing wrong with looking into alternatives.

If you do decide to look into other options and if you need a country-specific crypto wallet, make sure to check out the following articles:

• Best Crypto Wallets in Australia for 2024
• Best Crypto Wallets in the UK for 2024
• Best Crypto Wallets in Canada for 2024

Source: https://coincodex.com/article/53130/who-owns-metamask/