Trading Platforms Risk $180M Yearly as Users Flee to Onchain Rivals

Felix Pinkston
Jan 12, 2026 23:46

Fireblocks warns retail trading apps are losing 15% of users to competing platforms. Embedded wallets offer a path to recapture onchain trading activity.

Retail trading platforms are hemorrhaging users to onchain competitors, with an estimated 15% of active traders conducting business elsewhere each month, according to new analysis from Fireblocks.

The wallet infrastructure provider calculates this leakage could cost a platform with 2 million active users roughly $180 million annually in lost revenue—assuming $50 in monthly fees per user. Once those habits form on competing apps, they rarely return.

The Structural Problem

Traditional trading platforms face a fundamental speed disadvantage. Adding new assets requires custody decisions, legal reviews, chain-specific integrations, and lengthy approval cycles. Onchain-native platforms? They can enable new assets in days, sometimes hours.

“When a new market opens—whether a prediction market, a new perpetual contract, or a tokenized asset—users don’t wait,” Fireblocks notes. “They open a second app.”

The timing matters. Onchain derivatives already process billions in daily volume. Prediction markets have reached multi-billion-dollar annual volumes. Tokenized treasury products and credit instruments are live and trading.

Fireblocks Pushes Embedded Wallet Solution

The company’s pitch centers on embedded wallets—crypto wallets integrated directly into existing applications rather than requiring separate downloads. Users authenticate through familiar methods like email or social login, with the blockchain complexity hidden entirely.

These wallets typically use Multi-Party Computation or account abstraction to remain non-custodial while eliminating seed phrase management. Gasless transactions and cross-chain execution happen behind the scenes.

Fireblocks recently strengthened its position in this space. On January 7, the company acquired TRES, positioning the combined entity as what it calls “the first complete operating system for digital assets.” The firm already powers wallet infrastructure for major players including Kraken.

Historical Precedent

Fireblocks draws parallels to previous industry disruptions. Online trading platforms crushed phone-based brokers in the late 1990s despite incumbent resistance. Commission-free trading was dismissed as unsustainable until it became standard, forcing acquisitions across the sector.

The pattern: when access costs drop dramatically, platforms that move slowly lose permanently. Regulation provided temporary protection in previous cycles but proved insufficient as a long-term moat.

What This Means for Traders

For users, embedded wallets promise simpler access to emerging onchain markets without managing separate apps or understanding blockchain mechanics. For platforms, it’s a defensive play—keep trading activity in-house rather than watching it migrate to crypto-native competitors.

The broader trend is clear: retail access to perpetual futures, prediction markets, and tokenized securities is expanding rapidly. Platforms that can’t match that speed face a choice between adapting their infrastructure or accepting permanent wallet-share erosion.

Whether embedded wallets deliver on their promise remains to be seen, but the competitive pressure driving their adoption isn’t theoretical—it’s already showing up in user behavior and platform revenue.

Image source: Shutterstock