Continuing the series of articles about DeFi related topics, this post will act as an overview for the many DeFi friendly wallets currently available. These wallets are an integral part, needed to connect to DeFi applications, where some wallets only focus on one blockchain, while some offer the ability to connect to multiple ones.
For those of you already experienced in the crypto world for many years, you may or may not remember the wallet "MyEtherWallet". This was one of the first widely used wallets, which had, for today's standard, a very poor and clunky UI/UX. Thankfully, many wallets have improved since then and now seamlessly connect to the many DeFi applications available on the market.
These wallets come in many shapes and forms. Some of them are a browser extension, some are hardware wallets, while some are mobile apps.
In essence a DeFi friendly wallet is...
- Key-based
- DeFi wallets are all key-based. This means a user needs to write down his/her private keys and store them somewhere safely in order to gain access to their wallet (sometimes called recovery phrase, seed phrase, private key). This usually comes in 12 or 24 words, which make up your private keys.
- If a user loses their private keys, they will have no possibility to gain access to their wallet nor - the nature of decentralised finance wallets
- as the saying goes - your keys, your crypto
- Non-Custodial
- no one has access to the wallets' assets other than the user when sending and transfering funds.
- Accessible
- easily access DeFi protocols and apps
- access to popular DeFi assets
Some of the most notable and widely used wallets are;
Metamask
- Metamask (Mobile app and Web browser extension)
- Considered as the most used crypto wallet and gateway to some of the most popular DeFi apps like Yearn Finance, Uniswap and Compound
- supports Ethereum and Ethereum based tokens ERC20 and ERC721
Binance Smart Chain
- Binance Chain Wallet (Web browser extension)
- most widely used wallet for Binance Smart Chain protocols and DeFi apps like PancakeSwap
- supports BEP-20 Binance Coin and BEP-20 Tokens
- Has Binance Bridge - for wrapping many of the biggest blockchains' native tokens to wrapped tokens on BSC
Coinbase Wallet
Trust Wallet
- Coinbase Wallet and Trust Wallet (Mobile wallets)
- allows users to buy and store ERC20 tokens
- collect NFT
- gain access to DeFi apps via their in-app browser
- Ledger Wallet (Hardware Wallet)
- Most crypto users have already heard of Ledger - a physical device
- allows users to store a multitude of assets
- BTC, ETH, ERC20 tokens, Litecoin,...
- Lending and Staking on Ledger Live App
Ledger is highly recommended for users who prioritise security for their digital assets
These are only a few from the many wallets available on the market and the post should act as a guideline, to easily understand what these types of wallets do. Dependant on your preferences, you will then need to choose accordingly but as always, I encourage you to do your own research!
Sources:
- https://trustwallet.com/blog/binance-smart-chain-in-numbers
- https://finematics.com/top-3-defi-wallets-for-2021/
- https://defirate.com/wallet/
- https://academy.binance.com/en/articles/how-to-get-started-with-binance-smart-chain-bsc
added to the river via Styx Exxp : https://www.nyx-labs.com/overview-of-defi-friendly-wallets/