diff --git a/api/web3/verify.ts b/api/web3/verify.ts
new file mode 100644
index 00000000..ae4f17a4
--- /dev/null
+++ b/api/web3/verify.ts
@@ -0,0 +1,130 @@
+import type { VercelRequest, VercelResponse } from "@vercel/node";
+import { createClient } from "@supabase/supabase-js";
+import { verifyMessage } from "ethers";
+
+const supabase = createClient(
+  process.env.SUPABASE_URL || "",
+  process.env.SUPABASE_SERVICE_ROLE || "",
+);
+
+export default async function handler(req: VercelRequest, res: VercelResponse) {
+  if (req.method !== "POST") {
+    res.setHeader("Allow", "POST");
+    return res.status(405).json({ error: "Method not allowed" });
+  }
+
+  try {
+    const { wallet_address, signature, message, nonce } = req.body;
+
+    if (!wallet_address || !signature || !message || !nonce) {
+      return res.status(400).json({ error: "Missing required fields" });
+    }
+
+    const normalizedAddress = wallet_address.toLowerCase();
+
+    // Verify the signature
+    let recoveredAddress: string;
+    try {
+      recoveredAddress = verifyMessage(message, signature).toLowerCase();
+    } catch (error) {
+      console.error("Signature verification failed:", error);
+      return res.status(401).json({ error: "Invalid signature" });
+    }
+
+    // Check if recovered address matches provided address
+    if (recoveredAddress !== normalizedAddress) {
+      return res.status(401).json({ error: "Signature does not match wallet" });
+    }
+
+    // Verify nonce exists and is not expired
+    const { data: nonceData, error: nonceError } = await supabase
+      .from("web3_nonces")
+      .select("*")
+      .eq("wallet_address", normalizedAddress)
+      .eq("nonce", nonce)
+      .single();
+
+    if (nonceError || !nonceData) {
+      return res.status(401).json({ error: "Invalid or expired nonce" });
+    }
+
+    const expiresAt = new Date(nonceData.expires_at);
+    if (expiresAt < new Date()) {
+      return res.status(401).json({ error: "Nonce has expired" });
+    }
+
+    // Mark nonce as used
+    await supabase
+      .from("web3_nonces")
+      .update({ used_at: new Date().toISOString() })
+      .eq("nonce", nonce);
+
+    // Check if user already exists with this wallet
+    const { data: existingUser } = await supabase
+      .from("user_profiles")
+      .select("id, auth_id")
+      .eq("wallet_address", normalizedAddress)
+      .single();
+
+    if (existingUser) {
+      // User exists, link to their account
+      return res.status(200).json({
+        success: true,
+        existing_user: true,
+        user_id: existingUser.id,
+      });
+    }
+
+    // Create new Web3 user
+    const email = `${normalizedAddress.substring(2)}@web3.aethex.dev`;
+    const username = normalizedAddress.substring(2, 10);
+
+    // Create Supabase auth user
+    const { data: authData, error: authError } = await supabase.auth.admin.createUser({
+      email,
+      password: require("crypto").randomBytes(32).toString("hex"),
+      email_confirm: true,
+      user_metadata: {
+        wallet_address: normalizedAddress,
+        auth_method: "web3",
+      },
+    });
+
+    if (authError || !authData.user) {
+      console.error("Failed to create auth user:", authError);
+      return res.status(500).json({ error: "Failed to create account" });
+    }
+
+    // Create user profile
+    const { data: profileData, error: profileError } = await supabase
+      .from("user_profiles")
+      .insert({
+        auth_id: authData.user.id,
+        email,
+        username,
+        wallet_address: normalizedAddress,
+        user_type: "game_developer",
+        full_name: `Web3 User ${username}`,
+      })
+      .select()
+      .single();
+
+    if (profileError) {
+      console.error("Failed to create user profile:", profileError);
+      return res.status(500).json({ error: "Failed to create user profile" });
+    }
+
+    return res.status(200).json({
+      success: true,
+      user_id: profileData.id,
+      email,
+      username,
+      wallet_address: normalizedAddress,
+    });
+  } catch (error: any) {
+    console.error("Web3 verification error:", error);
+    return res.status(500).json({
+      error: error?.message || "Verification failed",
+    });
+  }
+}