Web3 Wallets: Types, Functionality, and Features of Web3 Wallets

With the emergence of blockchain technologies and decentralized applications (dApps), the need for secure and convenient management of digital assets has become more relevant than ever. Web3 wallets are a revolutionary tool that connects users to the blockchain world, allowing not only the storage of cryptocurrency but also interaction with decentralized financial systems, trading NFTs, and participating in DAO governance.

In this article, we will provide a detailed explanation and answer the question “what is a Web3 wallet,” how it works, the types and functions that exist, as well as the process of setting it up and choosing one.

What is a Web3 Wallet?

Unlike traditional wallets that rely on intermediaries, Web3 wallets give the owner full control over their funds by providing private keys exclusively to them. This makes them an essential element of the Web3 ecosystem, which is built on principles of decentralization and transparency.

Web3 wallets offer a multitude of capabilities that make them an essential tool for blockchain users. Their functionality goes beyond traditional storage, receiving, and sending of cryptocurrency. Here are the main features that distinguish these wallets:

Web3 wallets allow direct connection to decentralized applications, providing access to NFT marketplaces, DeFi platforms, and DAOs. This simplifies interaction with the Web3 ecosystem.

The main feature of Web3 wallets is decentralization. The user controls their private keys themselves*, eliminating risks from third parties.
*With rare exceptions.

Modern Web3 wallets support multiple blockchains, including Ethereum, Binance Smart Chain, Polygon, Solana, and others. This makes them a versatile tool for working with various networks.

Many wallets, such as MetaMask and Trust Wallet, offer a convenient interface for managing non-fungible tokens (NFTs). Users can easily buy, sell, and store NFTs directly within the wallet.

Some wallets, like Argent, use smart contracts to automate financial operations, such as managing collateral or distributing income.

Web3 wallets simplify access to platforms for staking, farming, and cryptocurrency exchanges. This allows for effective asset management and earning opportunities.

Most wallets offer a simple interface suitable even for beginners while remaining functional for experienced users.

Web3 wallets do not require users to share personal information, ensuring a high level of anonymity and data protection.

Many Web3 wallets are open-source, allowing the community to make improvements and verify the security of the code.

Non-custodial wallets provide access recovery through a secret phrase, adding convenience if the user loses their device.

Web3 wallets have become a universal tool, combining the functionality of traditional financial applications with the capabilities of blockchain. Thanks to these features, they are becoming an integral part of the digital economy.

Modern Web3 wallets are divided into three main categories, each with its own advantages and limitations.

Examples of such wallets:

• MetaMask — one of the most popular wallets for interacting with dApps.
• Trust Wallet — a convenient wallet supporting multiple blockchains and DeFi functions.

This type of wallet requires the user to have knowledge about security: careful storage of keys and the secret phrase is necessary, as their loss will lead to loss of access to funds.

This simplifies the process of working with cryptocurrency but reduces the level of security.

An example is the Binance Wallet, which is convenient for beginners due to its simple interface and access to trading tools.

For example, Argent and Gnosis Safe wallets allow setting conditions for access to funds or integrating additional security layers.

Smart contract wallets are ideal for working with decentralized finance (DeFi), where complex asset management logic is required.

The market offers a multitude of Web3 wallets, each with unique functions and features. To help you navigate this diversity, we have prepared a detailed description of the most popular solutions.

MetaMask is one of the most well-known Web3 wallets, excellently suited for interacting with dApps and managing assets on Ethereum and other EVM-compatible blockchains. It is available as a browser extension and a mobile application.

Main Advantages of MetaMask:

• Easy integration with DeFi protocols and NFT marketplaces.
• Support for multiple networks, including Polygon and Binance Smart Chain.
• Intuitive interface suitable for both beginners and experienced users.

However, since it is a non-custodial wallet, users are fully responsible for the safekeeping of their private keys and secret phrase.

Trust Wallet offers support for over 65 blockchains and a vast number of tokens, including NFTs. It is a mobile wallet geared towards users seeking a universal solution for asset management.

Features of Trust Wallet:

• User-friendly interface for working with NFTs and DeFi.
• Built-in browser for connecting to dApps.
• Full control over private keys.

Trust Wallet is considered one of the most secure and convenient mobile wallets, which has earned it immense popularity among crypto enthusiasts.

Binance Wallet is ideal for beginners who are starting their journey in cryptocurrency. It is a custodial wallet integrated with the Binance ecosystem. It simplifies asset management and connection to Binance Smart Chain platforms.

Advantages of Binance Wallet:

• Ease of use, especially for those already familiar with the Binance platform.
• Ability to quickly integrate with other Binance products.
• High transaction speed within the ecosystem.

However, using a custodial wallet means that the management of private keys is entrusted to a third party.

Argent is a smart contract Web3 wallet focused on users working with DeFi. It uses innovative security features, such as the ability to recover access without a secret phrase.

Advantages of Argent:

• Support for complex operations through smart contracts.
• Intuitive interface for asset management.
• Ability to set security levels, including authorization through trusted contacts.

This wallet is especially useful for those actively working with DeFi protocols like Aave or Uniswap.

Coinbase Wallet combines convenience and security, offering users access to their funds through a mobile application. Unlike the Coinbase platform, this wallet operates as a non-custodial solution.

Features of Coinbase Wallet:

• Ease of use for trading cryptocurrency and working with NFTs.
• Ability to send funds using a username instead of long addresses.
• Integration with popular DeFi applications.

Choosing a Web3 wallet is an important step that determines how conveniently and securely you can manage your digital assets. The market offers a multitude of solutions, each suited for specific tasks. To choose the ideal wallet, consider the following key aspects.

Think about what you need a Web3 wallet for. If you plan to use it for storing cryptocurrency and simple transactions, a custodial solution like Binance Wallet may be suitable. However, for active work with DeFi, NFTs, or participating in DAOs, it is better to choose non-custodial wallets like MetaMask or Trust Wallet, which provide full control over funds.

If you want to automate asset actions, consider smart contract wallets like Argent.

Each Web3 wallet works with specific blockchains. For example, MetaMask initially supports Ethereum but can be configured to work with Binance Smart Chain, Polygon, and other EVM-compatible networks. Trust Wallet offers a broader range, supporting over 65 blockchains.

Before choosing a wallet, ensure that it is compatible with the networks and tokens you intend to use.

Security is one of the main criteria when choosing a Web3 wallet. If you want maximum protection, choose non-custodial wallets. In them, only you have access to private keys, meaning your cryptocurrency is protected from attacks on third-party servers.

However, it is important to remember that security depends not only on the wallet but also on your behavior:

• Never share your secret phrase and private keys with third parties.
• Use two-factor authentication if available.
• Regularly update the wallet application to protect against vulnerabilities.

For beginners, the convenience of the interface is an important factor. Wallets like Binance Wallet or Coinbase Wallet have an intuitive design and detailed instructions for users.

If you need advanced functionality, pay attention to wallets that support DeFi and NFTs. For example, Trust Wallet offers a built-in browser for connecting to decentralized applications, and Argent allows automating complex operations through smart contracts.

Before installing a Web3 wallet, study reviews from other users and the application's reputation. Reliable wallets like MetaMask and Trust Wallet have a large number of downloads and positive reviews in app stores.

It is very important to download wallets only from official websites or app stores (App Store and Google Play). Scammers often create fake versions of popular wallets to gain access to your funds.

Some wallets offer unique features that may be useful to you:

• Multisignatures. Suitable for joint asset management.
• Built-in Exchange. For example, Trust Wallet allows quick token swaps within the application.
• Recovery Features. Argent offers access recovery through trusted contacts, which is especially convenient.

Creating a Web3 wallet takes just a few minutes. Here is a step-by-step process:

Now you can use the wallet for trading, participating in DAOs, and other activities within the Web3 ecosystem.

AML Crypto offers the Btrace tool, which helps analyze crypto addresses. This solution allows you to verify the sources of funds, identify suspicious operations, and minimize risks.

Advantages of Btrace:

Web3 wallets are a fundamental tool for managing cryptocurrency in a decentralized ecosystem. They provide users with control, security, and access to the unique capabilities of blockchain.

However, it is important to choose the right wallet based on your needs and to adhere to security measures, especially if you are dealing with large amounts of funds. If you have questions about transaction security, the AML Crypto team is always ready to help!