What Is Decentralized Wallet Meaning? A decentralized wallet, or personal wallet, is just what it sounds like: a crypto wallet you manage and maintain yourself. Let's explore more in this article.
What Is Decentralized Wallet Meaning?
A decentralized wallet is a non-custodial wallet that allows users to store crypto tokens and interact with DeFi protocols.
Thanks to the non-custodial nature of these wallets, users remain in full control of their digital assets because they hold their wallet's private keys (secret seed phrase that works like a password).
Two types of DeFi wallets
There are other categories that can be used to distinguish different crypto wallets: hot and cold wallets.
These terms simply describe two different types of storage for your cryptos: cold storage is for all those wallets that work offline; hot storage is for those wallets that are used online.
Usually, cold wallets are perceived as more secure — since they work offline — and come in the form of hardware wallets, but hot wallets allow you to access different DeFi platforms more easily and from different devices.
Among popular hot wallets we can find Metamask, WalletConnect and Trust, while popular cold wallets are Trezor and Ledger.
How to Choose a Decentralized Wallet
DeFi protocols are based on different blockchains. Hence, consider the blockchain of the DeFi protocol you want to use when choosing a wallet.
For instance, Ethereum-based DeFi protocols like Uniswap, MakerDAO, and Convex Finance require a wallet like MetaMask. On the other hand, you need a Solana wallet like Solflare, Phantom, or Sollet to use Solana-based DeFi protocols such as Serum, Solend, and Marinade Finance.
You can also choose wallets based on their capabilities. Some wallets only support one blockchain while others support multiple chains.
Finally, you can also look at the wallet's features to see if they'll fulfill your needs. For example, some wallets offer an in-app DApp Browser while others don't.
How to use a Decentralized Wallet?
After installing and funding a wallet with crypto, all you will have to do is connect the wallet to a DeFi protocol by using the option termed connect wallet. The connect button can be easily spotted in most of the DeFi protocols.
Popular Decentralized Wallet
Metamask wallet:
It is available as a browser extension and hence it can be used on a computer. However, metamask is soon launching a mobile application. It is built on the Ethereum blockchain and hence supports Ethereum-based assets.
Coinbase:
It is one of the most friendly DeFi wallets, it is easy to transfer funds, buy and store tokens and interact with other decentralized applications. The wallet has no custody but its private key is stored on the desktop of the user and hence can be retrieved if lost. Coinbase is one of the few wallets to support Bitcoin.
Argent:
Argent is a mobile-focused, decentralized app and is extremely friendly to users who are non-technical and are new to the world of decentralized finance. It has a security feature that allows the users to add guardians who can help to recover seed phrases and private keys if lost.
What Is Decentralized Wallet Meaning? How to Choose a Decentralized Wallet? - Hopefully, this article can help you to get some knowledge.
