Decentralized Finance (DeFi) is without a doubt the future of global finance given the impressive growth it has shown over the past few years. It offers investors the opportunity to participate in new and diverse markets such as the art of non-fungible tokens (NFTs) and exotic derivatives. To navigate DeFi and take full advantage of it, investors must have access to DeFi wallets.
The number of DeFi wallets is growing along with the industry, making it increasingly difficult for users to determine the one that suits them best. Therefore, it becomes extremely important for crypto investors to weigh their options before making the right choice.
This informative article will walk you through the key components of a good DeFi wallet and everything you need to know before choosing a secure one.
Let’s get started!
What is DeFi?
DeFi or decentralized finance is one of the latest financial technologies that allows participants to interact with financial services of lending, borrowing, trading and investing to generate income without the need for third parties, unlike the type offered by traditional financial services.
What is a DeFi Wallet?
DeFi wallets are access points for decentralized finance holders. When considering all the solutions available, DeFi wallets are the best and most secure methods that crypto enthusiasts can use and still have complete control over their assets. Unlike traditional banks, when using a decentralized finance wallet, you do not need verification from a third party.
However, when using a decentralized finance wallet, the security of your assets becomes only your concern. If you lose your login details, it is very likely that you will lose all your assets.
Key Components of a Good DeFi Wallet
There are several distinguishing features of DeFi wallets that make them unique and help them enter a highly competitive market.
Key based
The most important feature of decentralized finance wallets is their separate unique key pair. The keys are a 12-word seed phrase, and unlike centralized wallets, here users are responsible for protecting their private keys.
Non-Custodial
Being decentralized, all DeFi wallets are non-custodial in nature. Users can send and receive funds with the guarantee that they will be the only one with access to them.
Compatibility
Decentralized finance is happening on web3 apps, which means you have to access it from a web browser. All DeFi wallets are accessed by connecting a web3 wallet. Most mobile wallets have started integrating dApps browsers to make it easier to connect to DeFi apps without leaving the app. A good DeFi wallet should be compatible with your DeFi protocols and web browser.
Accessibility
DeFi is all about making the most of investors’ assets. To do this, non-custodial DeFi wallets must support all kinds of DeFi assets such as ERC20 tokens, stablecoins, and more.
What to Consider Choosing a Secure DeFi Wallet?
Since DeFi assets are stored in a DeFi wallet, their decentralized nature gives the owner absolute control over them. Thus, the owner is fully responsible for the safety of the assets in the wallet.
Therefore, you should pay special attention to choosing a secure DeFi wallet.
Let’s take a look at some of the features you’d better look out for before making your choice.
Multi-chain support
Multi-chain support is what the best DeFi wallets offer. The first choice you need to make before choosing a secure DeFi wallet is the blockchain you plan to use it with.
The crypto ecosystem is growing with more blockchains, and every crypto investor is familiar with chasing the best and latest staking and yield opportunities, as well as moving from one blockchain to another. With that in mind, you want a DeFi wallet that gives you access to as many chains as possible, so you don’t have to download a new wallet for every blockchain you choose to do business on.
Asset accessibility
Another important consideration is that your wallet preferences support the assets you are interested in, since naturally not all assets are supported by the wallet the user is interested in. While some wallets are designed to seamlessly interact with assets stored online, others natively support assets held in cold storage. Moreover, some wallets support staking and yield farming, while others do not.
As DeFi wallets are access portals to the vast DeFi community, you must choose a wallet that supports the assets and operations you have and use.
Security
DeFi wallet security is paramount before choosing. Generally, secure DeFi wallets are open-source and the wallet software is available to the public, so that anyone can review malicious codes and potential bugs. Consider what steps the wallet provider has taken to keep the user safe. To understand how serious security is for a provider, study the history of wallet security breaches, and avoid DeFi wallets with a long history of security breaches.
Social Presence
The social presence of a DeFi wallet is often overlooked by investors when making a decision. However, this factor can shed light on the features and overall value of a DeFi wallet. A good DeFi wallet is one that has an active social media presence and healthy engagement level.
The social accounts of the founders are also an important metric that can help the inverstore to make the right choice of a DeFi wallet. Wallets with a reputable team are often preferred over wallets that work with an obscure team.
Convenience
DeFi, as a promising sector, faces the challenge of complexity for the mainstream audience. Therefore, the ideal DeFi wallet choice is the one that combines functionality and convenience. An intuitive user interface is essential to smooth the process, and you should see if a DeFi wallet offers a step-by-step guide to help investors get up to speed.
CoinStats Wallet: a Secure DeFi Wallet
With all the information above, you can consider the CoinStats wallet as one of the best options. Being one of the most versatile and secure decentralized wallets in the world it allows the users to manage all their DeFi and cryptocurrencies in one place and buy, sell, trade, track and earn on their crypto holdings. The wallet includes biometric security and a 12-word seed phrase, providing an extra layer of protection for the users’ assets. Moreover, it allows users to exchange Ethereum, BSC or Polygon without having to switch between exchanges and buy cryptocurrency directly via credit/ debit card and bank transfer.
Closing Thoughts
DeFi adoption is steadily growing, resulting in a direct and proportional increase in the number of DeFi wallet users. Given that DeFi is free from centralized control, the responsibility for security lies entirely with the asset holder. Therefore, if you want to keep your assets safe, it is important to choose a secure wallet to store them.
Revolutionary DeFi wallets such as CoinStats have identified key market needs and provided comprehensive wallet options suitable for newbies and experienced traders alike.
We hope that our article will help you in the world of decentralized finance and you will be able to choose the most secure DeFi wallet for your needs.
