The issue of security in crypto storage has been a major setback over the years, with malicious attackers increasing by the day. According to a report by Chainalysis, investors lost close to $14 billion in 2021, most of which resulted from DeFi protocols being compromised. The trend has continued this year as more people flock to the DeFi market in search of life-changing opportunities. Is it worth the gamble if stakeholders don’t know how to securely store their digital assets?
Before the invention of DeFi, most crypto investors relied on centralized exchanges for crypto storage. However, it gradually dawned that even these custodial wallets are not as secure as expected. There have been several occasions where large crypto exchanges were hacked, resulting in millions of losses in users’ funds. With DeFi now in the picture, savvy crypto investors opt for non-custodial wallets, given that one is entirely in control of their private keys.
So, which are the best non-custodial wallets in the market? While the leading innovations in this niche offer similar services, software and hardware wallets are in two categories. It is also noteworthy that the existing non-custodial wallets differ in user experience. In the next section of this article, we will highlight three non-custodial wallets currently leading the pack.
Metamask is one of the pioneer non-custodial wallets; it touts over 10 million monthly active users (MAUs), according to an update by its developer, ConsenSys. This DeFi-oriented wallet is designed as a browser plugin, meaning that users have to download and install the official extension (add-on or plugin). Once the installation is complete, users can create a password, after which metamask will generate a 12-word backup phrase (master key).
Initially, metamask only supported the Ethereum blockchain, but it has since scaled to feature other ecosystems, including the BNB chain, Avalanche, Fantom and Polygon network. DeFi users across all these blockchain environments can use metamask to store their digital assets, provided they switch network icon when changing platforms. Above all, metamask users are entirely in control of their private keys, meaning no one can compromise their funds without the 12-word backup phrase.
Ambire is another non-custodial wallet that is quite friendly for newbies and veterans. Unlike metamask, this open-source wallet launched as a web application, enabling users to register through their emails. This design reduces the cumbersome work of managing seed phrases that can easily get lost if not stored properly. Meanwhile, Ambire users remain fully in control over their wallets and can also opt for self-hosting.
Other additional perks in this non-custodial wallet include hardware wallet support, automatic transaction fee management, Built-in swaps and cross-chain transfers and multiple network support (Ethereum, Avalanche, Fantom, Arbitrum, Polygon and the BNB chain).
As for the ecosystem governance, Ambire features a native token dubbed $WALLET, which doubles down as a reward tool for the platform’s users. $WALLET holders can vote for developments or integrations with other DeFi platforms.
Ledger is one of the leading hardware wallets that currently exist; it was launched in 2014 to serve the growing need for offline storage of private keys. By design, ledger wallets are device based and come in the form of USB drives. Contrary to hot (online) wallets, it is quite difficult for hackers to access a ledger wallet through the web. A good number of crypto veterans store their digital assets in the ledger wallet given the security attributed to offline storage.
Notably, there are two versions of the ledger wallet; Nano S and Nano X. The former was the first to debut and included support for multiple cryptocurrencies and up to 20 applications. On the other hand, the Nano X (latest version) supports up to 100 applications and a Bluetooth connection, enabling users to manage their crypto assets from anywhere. Ledger’s biggest competitor is the Trezor wallet, which also enjoys a significant share of the hardware wallet market.
Crypto may be a land of opportunities, but it can all go away in the blink of an eye. It is only prudent for the participants in this market to conduct proper due diligence before investing in any project. More importantly, crypto users should be careful in selecting where to store their newly founded wealth. The few examples in this article are a good starting point, but caution must be exercised at all times.