DeFi refers to decentralized finance – various products and simplified services that disrupt the financial industry by removing all intermediaries. To access decentralized financial services, you need a DeFi wallet.
In this article, we will walk you through the basics of DeFi wallet and recommend some of the best DeFi wallets.
What is a crypto DeFi wallet?
A crypto DeFi wallet (or Web3wallets) is a digital wallet that gives users access to decentralized ﬁnance (DeFi) products, and complete ownership over their assets. With a DeFi wallet, you have direct control over your digital assets. Unlike a centralized exchange that acts as a custodian of your crypto private keys, a DeFi wallet gives you full access and control of your keys. This ensures only the wallet owner has access to the funds.
Importantly, most DeFi wallets for crypto operate as Web 3.0 wallets, enabling access to decentralized apps (dApps) across the web, including most DeFi protocols. They are vital in providing secure, accessible, and intuitive interfaces for interacting with DeFi products. In addition, a crypto DeFi wallet supports multiple cryptocurrencies, including NFTs and DeFi tokens and other digital assets. Lastly, transactions via DeFi wallets are anonymous. They do not require KYC (Know Your Customer) verification.
How to choose a DeFi wallet?
Getting a DeFi wallet for cryptocurrency is the first step for anyone who wants to engage in cryptocurrency trading. It is crucial to choose a DeFi wallet that is secure and suits your needs. To do so, consider the following factors:
- Supported digital assets – not every wallet will support the crypto assets you’re looking for. Some DeFi wallets may oﬀer staking, yield farming, etc.
- Security – make sure the wallet has robust security features to safeguard your assets.
- Simplicity – How easy it is to set up the wallet, manage various assets or navigate new solutions and oﬀerings. The question comes down to how convenient and the ease of accessing various DeFi products like staking, yield farming, and other earning opportunities.
Best crypto DeFi wallets
MetaMask is one of the most secure DeFi wallets for storing crypto and interacting with decentralized applications. It allows you to transfer and receive ETH and ERC20 tokens and supports Binance Smart Chain BEP20 tokens.
MetaMask enables trading on layer two solutions like Polygon, making it highly versatile. As a result, MetaMask is a popular choice among DeFi users. For example, you can easily link your MetaMask wallet to popular NFT marketplaces like OpenSea or Rarible and receive your NFTs instantly in your wallet. The wallet is available as an app on Android and iOS, but you can also install it on your browser to use it as a local wallet.
WalletConnect is an open-source protocol used for connecting multiple wallets using QR codes. This can include other DeFi wallets, exchanges, dApps, and more. Many wallets and exchanges have integrated WalletConnect to provide easier access to DeFi products and services.
3. Crypto.com DeFi wallet
If you require access to a full suite of DeFi services in one place, then try crypto.com DeFi wallet. Oﬀered by one of the most popular crypto exchanges in the market, this DeFi wallet allows you to interact with DeFi dApps through WalletConnect. The wallet comes with a passcode, biometric authentication, or 2-factor authentication for an extra layer of security.
4. Coinbase wallet
Coinbase – one of the largest exchanges on the market – recently launched its own DeFi crypto wallet. It is an actual non-custodial wallet, with access keys stored locally on the user’s own browser.
Coinbase DeFi wallet currently supports 500+ cryptocurrencies, including Bitcoin and Ethereum. It also serves as a safe storage for digital collectibles like NFTs. More importantly, perhaps it is to note that the Coinbase DeFi wallet allows users to receive and send digital assets using a username instead of the usual public wallet address. The wallet is also available on desktop as a browser extension on desktop and an application on Android and iOS.
5. Trust Wallet
Trust Wallet is another popular DeFi wallet that gives users the ability to stake cryptocurrencies within the app. It is a fully compatible crypto DeFi wallet oﬀering access to dApps like Uniswap and crypto exchanges such as Binance. If you are just entering the DeFi space for the first time, Trust Wallet oﬀers an excellent entry point. It provides an intuitive, easy-to-use solution. More importantly, Trust Wallet has a backup facility for funds recovery in the event of a hack or theft.
Ledger is a hardware wallet (cold storage) that oﬀers the best security for your digital assets since it stores your private keys oﬄine in a safe physical device. You can connect the wallet to DeFi dApps via the Ledger app. Ledger DeFi wallet supports 1800+ currencies.
Trezor DeFi wallet works the same way as Ledger and safely stores the private keys for cryptocurrency assets oﬄine. It oﬀers top-notch security features for storing crypto and DeFi tokens – you need a PIN to access the wallet. In addition to the other outlined features, the order of the keypad constantly changes with each use to defeat keyloggers.
Coinomi is a multi-chain DeFi wallet that lets users seamlessly access DApps. It is also known to be one of the few crypto DeFi wallets that supports multiple blockchains and tokens. The wallet is available on both Android and iOS.
Argent is only accessible on mobile. It is a secure DeFi wallet uniquely popular for its clever use of smart contracts. Unlike other digital wallets that require a seed phrase to recover your digital assets, Argent eliminates seed phrases. Instead, it allows users to appoint Guardians who will verify a person’s identity and vote to reset access to the wallet. This provides a secure backup option for anyone who loses their seed phrase. Currently, Argent only supports Ethereum and ERC20 tokens.
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Is DeFi crypto wallet safe?
Crypto DeFi wallets are among the safest digital wallets in the market as they operate in a non-custodial manner. They let you keep your private keys, so you have complete control over your funds. However, if you lose your keys or get stolen, you will never see your cryptos again.
How to use a DeFi wallet?
In order to use your DeFi wallet, you simply need to connect your wallet to the DeFi protocol after installing and funding your wallet with crypto. The exact steps might vary depending on the platform, but usually itis quite straightforward and simple. Keep in mind that you need to confirm each transaction within your wallet and also pay for the transaction fee, so be sure your DeFi wallet is funded.
What is a DeFi wallet used for?
A DeFi wallet is a a non-custodial wallet, used for storing your cryptocurrency assets in a secure way. As opposed to other crypto wallets, DeFi wallet gives you complete control over your assets, and thus is considered one of the most secure way to store your crypto.