What is a Web3 Wallet?
At its core, a wallet consists of two things: Your public key and your private key.
The public key is like your mailbox: It enables you to receive things other people send you.
The private key is like the key to that mailbox: It lets you retrieve, use and send the things inside that mailbox.
In practice, most crypto wallets look more like an app: They’re mobile apps, Chrome extensions or desktop apps. Some wallets are pieces of hardware, which provides an extra layer of security.
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Types of Web3 Wallets
There are multiple types of crypto wallets. It might seem overwhelming at first, but you can imagine it like your non-crypto assets: You don’t store your spending money in the same account as your savings.
Before we get into the types themselves, we need to specify that most wallets are blockchain-specific.
In this article, we’ll only cover EVM wallets. EVM stands for Ethereum Virtual Machine and means that it works on Ethereum and all networks built on Ethereum. That means in most cases, an Ethereum wallet is also an Avalanche wallet, an Optimism wallet, a Polygon wallet, etc.
This is because all of these are so-called layer 2 networks: They’re built “on top” of Ethereum and use the same underlying technology with modifications.
Custodial Crypto Wallets
Custodial crypto wallets are those where another party holds your keys for you. That means your crypto is technically not in your possession.
An example of this is a centralized exchange like Coinbase (not to be confused with Coinbase Wallet). You create an account and trust the company with the security and financial management.
A few custodial providers include:
- Binance
- Coinbase
- Kraken
- Crypto.com
- Kucoin
Custodial storage is convenient, but it denies you the ability to trade on decentralized exchanges, buy NFTs or do most other web3 things.
Custodial wallets also expose you to risk if the exchange goes under (like FTX did), if it limits your choices (like Kraken shutting down their staking program) or if regulatory pressure increases.
That’s why we advocate for non-custodial wallets.
Non-Custodial Crypto Wallets
Non-custodial wallets (also called self-custodial) are web3’s typical wallets. They enable you to yield farm (earn returns on crypto), trade NFTs and be independent. You’re in power of your own security and store your seed phrase yourself.
But no matter what web3 wallet you use, scams are rampant in web3. Few wallet UIs tell you what a transaction actually does. That’s how scams happen: Malicious token approvals. That’s why we created our Chrome extension Fire, which shows you exactly what you’re signing so you never get scammed. Download it for free here!
Because most wallets are non-custodial, there are several types of non-custodial crypto wallets.
Let’s explore a few:
Web3 Browser Wallets
Note: All the browser wallets we mention also have mobile apps. The “mobile crypto wallets” section focuses on wallets which started on mobile or are exclusive to mobile apps.
MetaMask
MetaMask has become the go-to wallet for web3 and commands a large market share. It’s available both as a browser extension and a mobile app. It’s also one of the most battle-tested wallets and has been around since 2016 without major security leaks or risks.
Because it was initially created as a product for engineers, its UI can be difficult to use, especially for beginners. Besides challenging UX, MetaMask has the features you’d expect from a wallet.
- Storing tokens, viewing NFTs
- Switching networks to anything EVM-related
- Buy crypto with you credit card from the extension/app
- Swap tokens without leaving your wallet
Phantom
Phantom started as the go-to wallet for the Solana blockchain and has recently expanded to Ethereum/EVM blockchains.
The Features are comparable to those of MetaMask or most other wallets. Additionally, Phantom offers a mobile app on iOS and Android as well as browser extensions for FireFox and Microsoft Edge.
But one major advantage of using Phantom’s wallet is storing both SOL (and other tokens on the Solana blockchain) as well as EVM assets. This makes it the ideal wallet for anyone who trades on both blockchains.
But the most unique thing about Phantom is its simple UI. Phantom’s user experience is generally more intuitive than that of most other wallets, which makes it ideal for beginners.
Coinbase Wallet
While Coinbase is a centralized exchange, Coinbase Wallet is a self-custody wallet. That means it gives you full control over your crypto. Like Phantom Wallet, Coinbase Wallet also supports multiple chains, including Ethereum, bitcoin, Litecoin, Solana and Dogecoin.
There are three main unique features to Coinbase Wallet:
- Coinbase ID. In Coinbase Wallet, you can claim a more readable address, which reads something like yourname.cb.id. That makes sending and receiving easier and minimizes typos when copy-pasting complicated addresses.
- Community features: Coinbase Wallet lets you follow wallets and ENS addresses to see what NFTs they’re buying, which tokens they’re trading and what other people send them.
- Wallet-to-wallet messaging using XMTP, which lets users connect with other web3 enthusiasts.
Hardware Crypto Wallets
Hardware wallets have a physical component which stores the private key. They’re known as secure because they’re disconnected from the internet and require the physical device to sign transactions.
Ledger
The best-known hardware wallet provider offers a variety of hardware wallets and supporting software. Ledger wallets take two main forms:
- The Ledger Nano series wallets look like flash drives with small displays and connect to your laptop or phone via Bluetooth.
- The Ledger Stax wallet looks more like a tablet and makes it easier to get an overview and approve transactions directly on the device.
Besides the hardware wallets, Ledger offers the Ledger Live mobile app (for portfolio tracking), custodial services for large organizations and much more.
While they’re the most popular hardware wallet brand, Ledger recently faced some backlash against their Recover feature.
Trezor
With more than 10 years in the crypto space, Trezor is one of the most established hardware wallet providers. It offers hardware wallets that connect to other devices with a USB-C cable as well as an app which gives an overview over your portfolio.
There are many other crypto hardware wallets like BitBox, Ngrave, Keepkey, among others.
Mobile Crypto Wallets
As the name implies, mobile wallets are apps on your phone. An iOS wallet or Android wallet lets you interact with web3 on the go.
Uniswap Wallet
Built by Uniswap Labs, the team behind the number one DEX Uniswap, Uniswap Wallet is a self-custody iOS wallet which focuses on enabling swapping and easy portfolio management.
It also enables backing up your wallet via iCloud and manually. Web3 hardliners would consider an iCloud backup a vulnerability and store their elsewhere, but the iCloud backup certainly adds convenience.
Uniswap Wallet offers seamless swaps on:
- Ethereum
- Polygon
- Arbitrum
- Optimism
Rainbow
Few wallets have easier UX than Rainbow. Rainbow is a mobile Ethereum wallet available on the Google Play Store and iOS App Store. It offers the same features as most wallets: Buying, swapping, sending, etc.
But Rainbow is different from others like MetaMask because it is mobile-only (there is no browser extension). You can connect to dApps with Rainbow using WalletConnect, but always need to use your phone to do so.
Trust Wallet
Most of the wallets we cover in this guide are for Ethereum or EVM chains only. Trust Wallet is an exception: It covers multiple additional blockchains, including bitcoin, BNB Smart Chain, Bitcoin, Dogecoin, Tezos and many more.
While Trust Wallet is more versatile, the multitude of addresses and blockchains can be overwhelming for beginners.
Smart Contract Wallets
All wallets we discussed so far rely on EOA (externally owned account) technology. Without diving too deep into the technical details, EOA accounts have limited “abilities” and rely on a lot of manual interactions from the owner.
Smart contract wallets expand what wallets can do and enable various new web3 wallet features.
Smart contract wallets are what they sound like: Wallets with all the powers of smart contracts. Often powered by ERC-4337, smart contract wallets enable features no other wallet has:
- Social recovery (replacing the need for a seed phrase)
- Batch transactions (simplifying multiple transactions into one click)
- Batch revoking token approvals to stay safe
- Gas sponsoring
- And many more!
There are more examples of account abstraction, but those are the basics.
All of these require not only new types of wallet providers, but also the support of developers who build using these new token standards.
MPC Wallets
Multi-party computation (MPC) wallets remove the need for seed phrases by never storing the private key in one place, but distributing it across different parties and servers. This means the private key never exists in its entirety, making it nearly impossible to steal.
Zengo
Zengo is an MPC wallet that boasts that zero of its wallets were ever hacked. By removing the need for seed phrase custody, the provider aims to make it easier to keep your crypto safe and remove a potential vulnerability, the seed phrase.
Fireblocks
While Fireblocks is not a wallet you can download, but an institutional digital asset provider, they offer MPC wallets as a service.
Multisig Wallets
Multi-signature wallets require two or more signatures to approve any transaction, transfer or approval. This is ideal for company funds or project funds because no one person can run away with the funds.
Technically, these wallets are smart contracts. While this makes them sound similar to smart contract wallets, multisig wallets are usually less sophisticated. While smart contract wallets can also be multisig wallets, smart contract wallets usually offer things most multisig wallets don’t: Gas sponsoring, batch transactions and other things.
Safe
Formerly known as Gnosis Safe, this multisig wallet is the go-to for many in web3. It’s especially versatile because it’s available on 12 chains. Safe lets you create a multi-signature wallet on Ethereum mainnet, Gnosis Chain, Polygon, Avalanche, Optimism and many others.
Account Abstraction Wallets
ERC-4337 (more commonly known as account abstraction) is one of the most exciting developments in the Ethereum ecosystem because it enables various features that were impossible before. These include gas sponsoring, batch transactions, batch revoking of token approvals, social recovery wallets and so much more.
In a nutshell, ERC-4337 gives wallets the power of smart contracts. Because of this, account abstraction wallets are synonymous with smart contract wallets (there are technical differences, but we’ll leave those to the technical people).
While “normal” wallets usually have similar features, account abstraction creates more differentiated wallets:
Avocado Wallet
One of the newest wallets in the Ethereum ecosystem, Avocado is a smart wallet that has a few novel features:
- The “gas tank”: Gas fees are one of the most annoying things to web3 newbies. They’re confusing and often expensive. While Avocado doesn’t eliminate gas fees, it pays them from the gas tank, a type of sub-wallet holding USDC stablecoins. This makes it more transparent and gives you a better overview than subtracting gas fees from your ETH balance.
- Network abstraction: Instead of constantly switching networks to connect with different dApps, Avocado abstracts them away and makes connecting easy.
Ambire Wallet
Ambire has features you’d expect from most wallets but also lets you:
- Sign up with email and password: This makes it easier to create and secure your wallet than complicated storage. In fact, you don’t even need to download a browser extension.
- dApps inside the dashboard: Because many trustworthy dApps are built right into the dashboard, you can swap, bridge and trade without leaving your wallet (and without falling victim to spoofing scams).
Argent
Argent focuses on DeFi users on layer 2s. Layer 2 networks are built on top of Ethereum like Polygon, Optimism, Arbitrum One and zkSync. They usually have far lower fees than Ethereum mainnet and confirm transactions faster.
Argent focuses on enabling this with a few unique features:
- Social recovery: Instead of writing down a seed phrase, you can use “social recovery”, which allows you to recover your wallet with the help of friends’ wallets.
- Bridgeless layer 2 purchasing: To get tokens onto layer 2, you have to buy it from your wallet and then bridge it to a different network. This is complicated and can cost expensive fees. Argent lets you buy funds directly on layer 2 networks.
- Staking & earning: By leveraging partnerships (e.g. with Lido), Argent lets you on your crypto without l the app.
Candide Wallet
Candide is a special wallet because it was built as an open-source public good for the Ethereum community. While many wallets will need to make a profit in one way or another, Candide is free to use and the code can be used, copied and changed by anyone.
This is great for innovation on Ethereum, but also has a risk: Open source technology needs to be maintained by the community—which isn’t guaranteed if no team is being paid salaries.
That being said, we believe in Candide’s mission to provide tooling for everyone in web3 and to make using Ethereum safer and easier for everyone.
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