When Satoshi Nakamoto came up with the paper for Bitcoin in 2008, no one would have imagined that it would take the world by storm in the way that it has already. While Bitcoin has become one of the most valuable and fastest-growing assets to invest in, blockchain technology has given rise to many innovations. One of those innovations is decentralized finance, or DeFi, as it is commonly known.
DeFi aims to revolutionize the financial world and give financial freedom to people in ways they have never known before. And in that regard, anyone who wishes to use DeFi to their advantage needs to have access to DeFi wallets. This article will give you all the information and knowledge you need to pick the perfect wallet for you amongst the long list of DeFi wallets available on the market.
What are DeFi wallets?
Decentralized finance aims to democratize the traditional financial world and give people control over their finances by removing the need for intermediaries such as banks and other financial institutions. And to achieve that, it is important to have a wallet that will store your assets and tokens. This wallet is known as a decentralized wallet or a deFi wallet.
What separates DeFi wallets from normal crypto wallets on exchanges, etc., is that the assets stored on crypto wallets on exchanges are never totally under your control. While the assets stored in DeFi wallets are totally under your control and, as a result, are nearly impregnable,
Features of a DeFi Wallet
There are a few distinguishing features of DeFi wallets that make them unique, and one should always look for these functionalities while selecting a DeFi wallet.
Key Based: The most salient feature of decentralized wallets is that they are secured using a 12-word seed phrase, most commonly known as the wallet key. To log in and gain access to the wallet, the user must remember their private keys, and without them, there is no other way to access the wallet.
Non-Custodial Wallet: A decentralized wallet is a non-custodial wallet, which means that the owner of the wallet is the only one who will have control over and access to those funds. No one but the user controls the private keys used to secure the wallet.
Accessible: Almost all the non-custodial wallets allow the users to access the whole suite of DeFi assets, such as ETH, ERC20 tokens, and stablecoins such as DAI, USDC, etc.
Compatible: All the decentralized wallets are web3 compatible and can be used to access the DeFi apps with their inbuilt browsers. This ensures a much more stable and secure setting for the assets stored in the wallets.
Now that we know what a DeFi wallet is and what its salient features are, Let us look at some of the best DeFi wallets available. A DeFi wallet could be a software or a hardware wallet, and each of those has its share of advantages. The list below of the best DeFi wallets will help you make the right pick for you.
3 Most Popular DeFi Wallets
When one hears the term crypto wallets, one immediately goes to Metamask, and rightly so. Metamask is one of the most commonly used decentralized wallets in the world. It can be installed in your web browser by simply installing a browser extension. On top of that, it is also available in the form of a mobile wallet app.
While mobile wallets have a long way to go when it comes to providing the full, seamless functionality of a DeFi wallet, they are still very useful. You can further secure your assets on Metamask by using hardware wallets, such as the Ledger Hardware wallet. Metamask supports all the ERC20 tokens, and the transactions are fast and smooth. On top of that, it is really simple and easy to use, which is why it is so popular amongst users.
Coinbase is one of the biggest crypto exchanges globally, and its wallet is not like the ones of other exchanges such as Binance. The Coinbase Wallet allows users to store their crypto assets using private keys directly on their devices and have complete control over them. Moving your assets to the Coinbase wallet and Coinbase exchange is also smooth. At the same time, it can be used to store all ERC20 tokens and NFTs to interact with decentralized apps.
One of the most revolutionary and best DeFi wallets available is the CoinStats Wallet. It opens up the doorway to all the DApps available in the market by storing all your tokens. It allows you to swap tokens on the BSC, Ethereum, and Polygon networks and supports buying cryptocurrencies directly using bank cards.
What’s more, with CoinStats, you can also link your portfolios to its crypto portfolio tracker on almost all major exchanges and wallets and track them in one place without switching between apps using the CoinStats Portfolio Tracker.
The wallets mentioned above are the best decentralized finance wallets available in the market, and picking any one of these would be the right choice. The only factor you should consider while making your pick is which one of the above wallets meets your requirements.