Crypto wallets are pieces of software that enable users to receive, store, and send digital currencies like BTC and ETH, as well as interacting with the blockchain in more complicated ways.
When Bitcoin was first launched in 2009, the only wallet available was a command line interface (CLI) which required the user to run a full node, downloading the entire blockchain onto their computer. To manage your wallet you typed in commands to generate new private keys and addresses, and send coins to other users. Early graphical wallet interfaces were a game-changer, but still clunky.
Fortunately, today’s wallets are far more intuitive and straightforward to use. They include mobile apps, desktop wallets, web apps, browser extensions, and even hardware devices for maximum security. They also enable the user to do far more than send and receive crypto, making it possible to engage with decentralised applications (dApps) including DeFi services like lending and borrowing, and playing P2E games. All of the complexity of creating transactions and submitting them to the blockchain network is abstracted away behind simple and convenient user interfaces, which make interacting with dApps as easy as using conventional web and mobile applications.
However, when deciding which wallet to use, there are many to choose from. Here are five popular and well-tested options.
MetaMask is the reigning king of DeFi wallets, with over 30 million monthly active users on Ethereum, Binance Smart Chain, and numerous other networks. It takes the form of a browser extension for Chrome/Brave and Firefox, with mobile versions for iOS and Android. Simply download the extension, follow the prompts to set up a wallet, and whenever you visit a Web3-enabled site, it will automatically interface with MetaMask, which will prompt you to confirm or reject any transactions the site wants you to make. This makes engaging with dApps seamless and intuitive.
MetaMask is the de facto choice for Web3 users, and there’s no question it’s a solid option. It’s good for storing and sending tokens, and more dApps allow users to connect with MetaMask than any other wallet. It doesn’t have the best UX of any wallet out there, but it’s very decent and its ubiquity in the DeFi space means you can’t go too far wrong with it. As a DeFi user, if you were only able to download one wallet, it should be MetaMask.
The good news is that you’re not restricted to one wallet, and there are plenty of others around to complement MetaMask.
Trust Wallet is a mobile wallet app for iOS and Android. Just as MetaMask is a solid choice for a browser extension wallet that enables you to access dApps, Trust Wallet is a great option if you need a mobile wallet. It’s Binance’s official wallet, and as well as being open source and supporting multiple assets (including bitcoin) the app allows purchases of crypto using a credit or debit card. The Android version of the wallet has support for DeFi dApps, you can trade on Binance DEX, and you can connect to smart contract platforms including Ethereum and Binance Smart Chain. There’s also an NFT wallet.
Just like MetaMask, Trust Wallet is set up using a Seed phrase, which is used to generate private keys for addresses on different chains. You’ll need to back this up and keep it safe, in case you ever need to recover your wallet.
One unusual feature of Trust Wallet is its utility and governance token, TWT. This can be used to vote on ecosystem decisions like adding support for new chains or tokens. TWT also gives holders discounts on trading and commission fees.
Hardware wallets offer the ultimate in crypto security. These devices can be used to generate and manage private keys, creating and signing transactions offline before broadcasting them to the network. This air-gapped approach means they are far safer than regular browser and mobile wallets (which, when due care is taken, are nevertheless very safe themselves).
SafePal offers both a hardware wallet and a mobile wallet, giving you the best of both worlds depending on your needs. The offline wallet provides strong security, though when you want to use DeFi protocols and other dApps, you’ll need to move your tokens to the mobile wallet – unlike Ledger and some other hardware wallets, it’s not possible to interact with dApps directly from the device itself. However, the SafePal S1 hardware wallet is around half the price of its competitors, making it a good choice for beginners who have a particular concern for security.
As well as supporting various DeFi applications, SafePal also has its own token, SFP, which can be used to gain discounts on fees and other perks. There’s also SafePal Cypher, an extremely robust physical wallet used to store private keys for backup purposes.
1inch is best known as an exchange aggregator: a service that allows users to connect to multiple exchanges at the same time, accessing liquidity across the whole market and ensuring the best price for their trades. 1inch also offers a powerful mobile wallet with some unusual and attractive features.
The wallet supports multiple chains, allows users to store regular tokens and NFTs. Naturally, it provides an aggregator for efficient trading from the app. Users can also stake 1inch tokens, the governance token of the service.
So far, so good, but there are a couple of features that set the 1inch wallet apart. One is its use of the Secure Enclave, which is a subsystem within the Apple chip. This isolates activity (in this case, signing crypto transactions) from the main processor, like a special vault within the chip – meaning that even if the device is compromised there is another layer of protection.
The second is flash transactions for the Ethereum network. Front-running has become a huge problem on Ethereum. Bots scan the mempool for transactions that have been submitted but not yet confirmed on the blockchain, and submit their own transactions first if there is any information that can be exploited in them (such as large trades being placed, which will move the market). Flash transactions are typically executed without going to the public mempool, avoiding this problem and the implicit costs and other problems.
Rainbow aims to do for crypto wallets what Apple did for mobile phones in 2007. While crypto wallets have moved on in leaps and bounds since the early days, they can still tend to be somewhat utilitarian. Rainbow is an absolute triumph of user experience, making it a fantastic choice for new DeFi users but one that also has plenty of features veterans will appreciate.
With Rainbow, it’s all about design, without compromising on functionality or dumbing things down by eliminating more complex features. For example, users can swap tokens with Uniswap from within the app; buy ETH and Dai with Apple Pay or a debit card; log into top DeFi dApps using WalletConnect; browse, buy and store NFTs; and even buy an ENS domain name to use instead of a long Ethereum address. Bottom line? Rainbow somehow manages to combine functionality with usability, to the point where diving into the crypto world actually becomes fun.