Understanding WCT Token: The Full Form and Core Mechanisms of WalletConnect Governance

WCT, standing as the governance token of WalletConnect, is designed to evolve a Web3 infrastructure project from centralized management toward community-driven decision-making. The token represents far more than a governance tool—it’s a multi-functional asset that aligns participants’ incentives with the platform’s long-term success.

How WalletConnect Transitions from Central to Distributed Control

The WalletConnect Foundation currently steers the ecosystem through strategic grant distribution, developer support, and partnership development. However, this setup is intentionally temporary. As the network matures, the governance structure will decentralize through the formation of specialized councils, each handling distinct operational areas. WCT tokenholders gain voting power to shape protocol proposals and strategic decisions, with community participation ramping up progressively. This phased transition ensures stability while building toward true decentralization.

The Incentive Engine: Rewards Distribution Strategy

To bootstrap network participation, WalletConnect has earmarked 17.5% of total WCT supply for distribution as network rewards during the initial years. These rewards aren’t randomly distributed—they flow to active contributors whose work advances the platform’s mission of enhancing blockchain user experience.

Infrastructure providers, particularly node operators, receive performance-based rewards tied to their uptime and reliability metrics. This creates a direct relationship between operational excellence and financial returns, naturally incentivizing network participants to maintain high-quality infrastructure.

Staking: Securing the Network While Earning Returns

WCT holders can lock their tokens into staking mechanisms that simultaneously strengthen network security and generate passive income. The staking reward structure originates from the overall ecosystem rewards pool, with distribution parameters subject to community governance.

Stakers earn returns proportional to their commitment level, though safeguards prevent excessive token concentration among individual validators. The reward structure encourages longer commitment periods and larger stakes through graduated incentive tiers, aligning individual financial motivation with network health.

Fee Architecture and Future Monetization

The current model operates without fees, prioritizing network adoption and user growth. As the ecosystem demonstrates maturity and stability, the community can propose, debate, and democratically approve fee structures through governance voting.

A leading proposal suggests implementing a Monthly Active User (MAU)-based fee model for the relay service infrastructure. This approach scales fees proportionally with actual usage, ensuring that costs remain manageable for smaller users while capturing appropriate revenue from larger-scale operations.

Why This Design Matters

By combining governance rights, reward opportunities, and staking mechanisms, WCT creates overlapping incentives that align diverse network participants—from developers to infrastructure operators to traders—toward shared success. The gradual transition from foundation management to community control reflects a commitment to sustainable, resilient decentralization.