What is the Phantom Wallet?

Phantom Wallet is a non-custodial cryptocurrency wallet and browser extension that provides users a secure and user-friendly way to manage their digital assets. Initially made for the Solana blockchain, Phantom now supports Ethereum, Polygon and Bitcoin, but remains one of the most popular wallets for Solana. Phantom allows users to safely store, send, receive, and exchange cryptocurrencies and NFTs and interact with DeFi protocols. Phantom quickly gained popularity due to its user-friendly interface and the explosive growth of Solana.

Phantom Wallet History

Phantom Wallet was co-founded by CEO Brandon Millman, CPO Chris Kalani and CTO Francesco Agosti. Millman was previously a senior engineer at Twitter and helped build the decentralized exchange 0x.

The team raised $9 million in a Series A funding round in July 2021, setting its sights on developing a wallet for the nascent Solana blockchain.

Phantom was launched during a time of robust growth for Solana and the cryptocurrency market as a whole and quickly became one of the most popular on-ramps for the Layer 1 blockchain. Within a year, it claimed to have over three million users. In January 2022, the team raised $109 million in Series B funding, valuing the company at $1.2 billion. Phantom expanded beyond being just a browser extension and created mobile versions of the wallet for iOS in January 2022, and later on Android in April 2022.

Phantom also expanded its support to other blockchains such as Ethereum, Polygon and Bitcoin, including the novel token types for Bitcoin Ordinals and the BRC-20 standard in 2023. In May, Phantom surpassed PayPal to become the number two app on the Google Play Store for free finance apps.

Features and Use Cases

Phantom provides users with easy access to common wallet functions like sending, receiving and storing SOL and SPL tokens (similar to Ethereum's programmable ERC-20 tokens). The wallet integrates with decentralized apps on the Solana network, enabling users to interact with DeFi protocols, NFT marketplaces and others directly from the wallet.

One-click staking also allows users to stake their SOL tokens within the wallet to earn yield.

Phantom has in-app token swapping, forgoing the need to interact with a separate decentralized exchange for those who wish to swap immediately at market price.

Phantom is also compatible with Ledger hardware wallets for offline security.

What’s needed to create a Phantom Wallet?

Users can download Phantom as a browser extension or mobile app on the Phantom Wallet website. From there, users can follow the prompts to set up the wallet within their browser’s extension store. Users should always be careful to ensure they are downloading and installing the official Phantom Wallet application.

After installation, users will be brought to a new tab to create their new wallet, including a password that will be used to access it in the future. Following this, users will be presented with a secret recovery seed phrase, which must be stored in a safe location. A seed phrase is the only means to recover a wallet and must be kept secure. Losing the seed phrase could mean losing access to funds, and if someone else gets the seed phrase, they can take the user’s funds.

Once the password is set up and the seed phrase is saved and secured, users can click continue to proceed, and their wallet is set up and ready for use. For mobile users, the above steps are similar but carried out on a smartphone instead.

Are there any risks to using Phantom Wallet?

Although Phantom has robust security features, no system is entirely immune to hacks or security breaches. Users should take care to avoid phishing scams, though Phantom has implemented certain features to assist users in detecting malicious actors, such as protection alerts, simulated transactions, URL verification and community reports.

Furthermore, if a user sends funds to the wrong address or loses their seed phrase they can lose their assets. Certain apps in the DeFi space can also have vulnerabilities.

In a famous case, a significant security breach in August 2022 affected thousands of users on the Solana blockchain. The attack led to the loss of approximately $4.1 million worth of SOL and other tokens from thousands of wallets. After the investigation, it was discovered that the entire incident traced back solely to the Slope wallet, a separate wallet application, and the Solana team stated all hacked addresses were at one point created, imported, or used in the Slope application.

Nevertheless, the breach underscores the importance of maintaining wallet security and for individual users to take extra care when operating in the crypto and DeFi landscape.