Web3 Wallets

Blockchain technology is revolutionizing how people carry out their transactions. In the past, conventional banks and financial institutions had complete control over how people transacted money and assets. Banks secure transactions by acting as custodial third parties, but they also slow down the process, and raise transaction costs. Web3 eliminates the middlemen and enables fast and convenient global payment systems. The best part is that all Web3 transactions are verified and recorded on the blockchain, which is an immutable database. Therefore, nobody can manipulate the recorded transaction data, making blockchain the ideal third-party credit risk evaluator.

Introduction

The earliest form of internet, dubbed Web1, was mostly centered on the users being consumers of whatever information was out there. Web 2 brought about the concept of user-generated content and applications, which is great. PayPal and Yandex are examples of web wallets that have been part of the Web2 era. However, the network controls much of the data, transactions and other functions in Web2, which creates privacy concerns. The hallmark of Web3, which we’re steadily evolving into, is decentralization, and Web3 applications are decentralized, giving users complete autonomy over their online interactions. The evolution is fueled by blockchain technology, and crypto enthusiasts get to enjoy all these benefits.

The wallets are designed to interact with dApps built on blockchain technology. They make it easy to manage your crypto and digital assets like NFTs and other tokens. There are more than 2.5 million wallets across all blockchains. In fact, you might have interacted with one without knowing it. In this Web3 wallet review, we’ll discuss the best wallets in 2023, their features, benefits and disadvantages, how to set one up and our expert ratings.

Top Web3 Wallets

1. MetaMask – The Best Overall
2. Trust Wallet – The Best for Mobile Transactions
3. Phantom Wallet – The Best for Comprehensive Management of Assets
4. Coinbase – The Best Wallet for Instant Crypto Transactions
5. Exodus Wallet – The Best Wallet for Total Control Over Your Digital Assets
6. My Ether Wallet – The Best Non-Custodial and Open-source Wallet
7. Torus Wallet – The Best for Beginners
8. Binance Direct Wallet – The Most Secure DeFi Wallet
9. Zerion Wallet – Ideal for Wallet-to-Wallet Transactions
10. Argent Wallet – The Best for DeFi and Web3 Applications

Best Web3 Wallets Reviewed

1. MetaMask – The Best Overall

MetaMask was launched in 2016 and is Headquartered in San Francisco, California. The Consensys-owned wallet started as a browser extension that worked seamlessly with Firefox. However, the company wanted to make a more versatile product for all its consumers and developed a downloadable app compatible with both Android and iOS. MetaMask tops our list of Web3 Wallets because of its high level of versatility and security. It provides one of the best environments to store your crypto, manage your ETH and also manage digital wallets. It’s the most popular way for crypto enthusiasts to interact with websites using Ethereum and also Dapps.

While it’s not possible to store Bitcoin in this wallet, you can wrap the currency and store it as WBTC. Ethereum supports Polyon, BNB Smartchain and Ethereum. It’s also one of the most secure wallets offering clients passwords and seed phrases to secure their tokens and other digital assets. Metamask Wallet also offers an impressive selection of 18 languages to its users across the globe, including English, French, German, Arabic, Russian, Bahasa, Turkish, Vietnamese, Dutch, Romanian, Chinese, Japanese, Korean, Ukrainian, Thai, Dutch, Italian and Filipino. The platform has more than 10 million active users across the globe, and regularly updates its privacy settings to match changes in the industry. It takes the top position because of its decentralized and non-custodial nature, which are the hallmarks of Web3. We’d give it an overall rating of 4.8/5.

Pros

• Connects to almost all Dapps on Ethereum’s blockchain
• It accepts both Bitcoin and Ethereum
• The setup process is simple for beginners in crypto
• Users can get rewards for staking and holding
• It has a browser extension for ease of access

Cons

• Very limited support of other coins besides Eth and its tokens
• Less secure than hardware wallets
• It does not offer coin-to-fiat conversion

2. Trust Wallet – The Best for Mobile Transactions

Trust Wallet is a product of Binance Labs. It is a separate product from the Binance CEX and the wallet attached to it. Before its acquisition by Binance, Trust was owned by Victor Radchenko who started it in 2017. After Binance Labs acquired it in 2018, they embarked on making it more user-friendly and versatile. It currently supports more than 33 chains and their tokens.

The most impressive quality of Trust Wallet is that it supports more than 250,000 tokens across chains like Polygon, xDai, Solana, Tezos, BNB Smartchain and many others. The app is available for Android, iOS, and also as a Chrome extension. Trust Wallet has an impressive open-source code, and is constantly getting improved upon. It is available in English, Vietnamese, French, Turkish, Chinese, German, Portuguese, Japanese, Bahasa, Korean, and Japanese. It stores ETH in a secure environment and interacts with dApps within the Ethereum blockchain. Users can also stake their tokens on the desktop wallet. Trust is user-friendly and popular, which is why we give it a 4.7/5.

Pros

• It is decentralized and non-custodial, and you’re always in control of your assets
• The code is open-source, which makes it easier to improve its kinks
• It supports more than 33 blockchains and their tokens
• The mobile application has a simple and user-friendly interface
• You can easily buy tokens with a credit card on the web version of the wallet

Cons

• Low level of security because it’s a hot wallet

3. Phantom Wallet – The Best Wallet for Comprehensive Management of Digital Assets

Phantom Wallet was launched in January 2022 as a re-imagined digital wallet for DeFi and NFTs. The company, Phantom Technologies, has its headquarters in San Francisco, California. The wallet simplifies sending, receiving, storing and swapping of tokens on the Solana Blockchain. However, the App has evolved and currently also supports Ethereum and Polygon Networks. It has both mobile and a browser version, and allows users to access many decentralized apps across the Web3 landscape. Users can easily access Uniswap, Aave, Blur and OpenSea through this wallet. The user interface is closely modeled to resemble MetaMask’s, which means it matches the latter’s user-friendly, easy-to-set-up and intuitive design.

Phantom app is currently available for Android and iOS and also has a browser extension that works with Chrome, Brave, Firefox and Edge. The most impressive features include that it’s non-custodial, allows token swaps, and also allows users to get NFTs and collectibles. It currently works with Solana, Ethereum and Polygon Apps. Language options include Thai, Vietnamese, Portuguese, Turkish, Filipino, Chinese, Bengali, Japanese, Korean, English, Spanish, German, French, Italian, Punjabi, Swahili, Tamil, Telugu, Yoruba, Burmese, Amharic, Arabic, Gujarati, Chinese, Russian, Hindi, Indonesian, Malay, Hausa, and Igbo. The app is constantly coming up with improvements to give its users a positive experience, which is why we’ve ranked it third with an overall score of 4.6/ 5.

Pros

• NFTs are grouped according to similarity for easy search
• The wallet is non-custodial and the user has complete control and autonomy over their assets
• It’s possible to perform token swaps, and the app displays information like the slippage, tolerance and the estimated fee
• The wallet supports transactions with Ledger Nano X, making it possible to securely store your digital assets offline
• It merges seamlessly with 93 dApps, including Audius, Soldate, Affiliarum, Apex, Protocol and many others
• Users can also stake Solana tokens and receive rewards for it

Cons

• The software is currently not open source
• It shares the vulnerabilities that come with all other hot wallets

4. Coinbase – The Best Wallet for Instant Crypto Transactions

Coinbase started in 2012 as a decentralized crypto exchange. The American company has its headquarters in San Francisco and is even listed on NASDAQ. You can perform transactions like buying, swapping, receiving, bridging and even browse dApps on Coinbase. The wallet is easy to install and compatible with both Android and iOS devices. It also has a desktop app for both macOS and PC.

Users can access an array of tokens on Coinbase, including all ERC 20 tokens, and all EVM compatible chains like Avalanche, Polygon, BNB Chain, Polygon and others. The wallet is available in 10 languages including English, French, Chinese, Spanish, Russian, Portuguese, Korean, German, Italian, and Japanese. Our Web3 wallet review rated Coinbase 4.5/5 because of its versatility and continued improvement over the years.

Pros

• Simple to set up and use as a crypto and NFT storage
• Compatible with all other BIP39 wallets
• It supports a wide variety of tokens
• Instant withdrawals
• The Wallet is very transparent and clearly displays all its crucial information for users to access
• You can reach customer support through email, chat and phone

Cons

• Unpredictable transaction fees

5. Exodus Wallet – The Best Wallet for User Autonomy

Exodus Wallet was launched in 2015, and its parent company has its headquarters in Nebraska. The aim of the team that developed the wallet was to make it easier for everyone to access cryptocurrency. It is an excellent wallet of choice for beginners as it has a simple user interface and instant chat support. The network charges a fee to send assets but receiving them is free. It also allows users to buy, sell and swap within the wallet. Exodus is available for both Android and iOS. You can also access it via your desktop. The wallet is only available in English at the moment. We gave this wallet a 4.4/ 5 rating.

Pros

• It is easy to set up and start operating
• It is a secure multi-chain wallet, and you can use it to access all Ethereum, Solana and other layer 2 tokens
• They are completely non-custodial, which puts the user in complete control of their private keys, heightening the security of their tokens
• They have a regular update schedule, which simplifies the process of correcting any arising issues with the code
• Users can stake their tokens and other assets

Cons

• The wallet does not support conversion between crypto and Fiat
• The code is not open-source
• The wallet doesn’t have 2FA

6. MyEther Wallet – The Best Non-Custodial and Open-source Wallet

MyEther is a free open-source wallet from Ethereum. It was launched in 2015 and is headquartered in Zug, Switzerland. The Wallet allows users to buy, sell, swap, and perform a myriad of other transactions on their site. It is an open-source wallet, and users can also interact with smart contracts and dApps. It is one of the most versatile wallets in the market, as it opens up all its users to the entire Web3 ecosystem. The software is available for Android, and iOS and also has Enkrypt, an extension that you can add to Chrome and perform your transactions. My Ether wallet currently supports English and Russian. We’d rate it 4.3 out of 5 because of its versatility and user-friendliness.

Pros

• Many features that support transactions connected to Ethereum and its assets
• NFT management, which makes it easy to manage the tokens within the wallet
• It supports all transactions with Ethereum and all its compatible networks like Polygon, and Binance Smart Chain

Cons

• It doesn’t support non-Ethereum tokens
• It’s a hot wallet, which makes it susceptible to phishing

7. Torus Wallet – The Best for Beginners

Torus Wallet was launched in 2018, and has its headquarters in Singapore. It is an open-source non-custodial key management system that allows users to buy, sell and perform transactions on Ethereum, Polygon, Reef, and xDai Chains. It has a simple user interface and people new to crypto and Web3 have an easy time getting started on it. Torus rebranded to Web3Auth in 2022, and is one of the most successful projects backed by Binance Labs. Unfortunately, the wallet is only available in English. Our Web3 Wallet review still allocated a 4.2 out of 5 score to the wallet because of its simplified interface and versatility.

Pros

• Allows one-click login with Facebook, Reddit, Discord and Twitch
• The user has complete control over their keys. The platform also offers free cryptographic key repair
• It does not allow censorship commonly done by nodes
• Has OAUTH, which allows users to use a one-click login to access currencies in a decentralized exchange
• It’s a native App, and users on web 2.0 connect with Web3.0 entities

Cons

• Users need existing Apps to integrate and allow logging into Torus
• Open to hacking and phishing attempts

8. Binance DeFi Wallet – The Most Secure DeFi Wallet

Binance is one of the largest centralized exchanges on the globe. The company has also expanded beyond the cryptocurrency exchange and invested in technology that supports decentralization. The Binance DeFi Wallet was launched in 2022 by the Cayman Islands-based Binance, and is a non-custodial and decentralized wallet on the network. It supports Binance chain, Binance Smart Chain and Ethereum tokens and dApps. Like all other Binance applications, Wallet Direct is available in 43 languages and is easy to access from around the world. You can download an Android and iOS app version of the wallet, or install it on your desktop computer. Our Web3 Wallet review gave this wallet a 4.1 out of 5 score.

Pros

• It supports multiple Web3 applications and tokens
• It has built-in exchange functionality
• It has a high user trust rating
• Very convenient for daily usage
• Eliminates the need to use seed phrases and private keys
• Full SegWiT address support, and partial Bech32 Support

Cons

• New users claim the wallet is a little complicated
• The customer support needs to improve

9. Zerion Wallet – Ideal for Wallet to Wallet Transactions

Zerion wallet was launched in 2019 by the San Francisco based company as the first completely self-custodial Web3 wallet. It features smart trade routing across all major decentralized exchanges. It is one of the most versatile wallets, supporting more than 10 chains across the network. These include Arbitrum, Solana, Gnosis, Optimism, Solana, Binance Smart Chain and others.

It has a simple user interface, making it appropriate for new users. It’s dApp connectivity via wallet connect makes it easy to sign transactions directly from your computer or mobile device. It has over 200k users monthly, which makes it moderately popular. You can download a version compatible with your MacOS, iOS, and Android. Currently, the wallet is only available in English. We ranked it 4.0 out of 5 in our Web3 wallet review.

Pros

• It is a multichain wallet that supports thousands of assets
• It allows you to connect to any dApp in the digital space
• Has fiat onramps that help you switch from cash to crypto within a short time
• Has multi-seed phrase management, making it easy to import Rainbow, Coinbase, Metamask and several other wallets
• Allows you to create a generative NFT that helps you learn about Web3 as you invest
• Live price updates

Cons

• The exchange is unregulated
• The app is complicated for beginners

10. Argent Wallet – The Best for DeFi and Web3 Applications

Argent Wallet was launched in 2017 by the London-based company. It allows users to store both cryptocurrencies and NFTs and also perform other transactions within the Ethereum Blockchain. It is a non-custodial wallet, and users have complete control over their private keys. You can stake on the wallet as long as the tokens are Ethereum-based. It has an app version compatible with Android and iOS. It supports more than 240 tokens and is currently available in English. We ranked Argent 3.9 out of 5 because it isn’t popular yet, and is limited to Ethereum.

Pros

• It has a user-friendly interface
• It is very secure
• You can use credit and debit cards to purchase cryptocurrencies
• It offers leveraged stakes with the potential for very high yields

Cons

• Card transaction fees are high
• Does not support any other tokens besides Ethereum

What is a Web3 Wallet?

These are digital wallets developed and coded to interact with Web3 applications. They allow you to store and manage your NFTs, Cryptocurrencies and other tokens. You can choose between custodial, non-custodial and smart contract the wallets depending on what suits you and the level of control you want over your assets.

Web3 Wallets on Centralized Exchange (CEX) vs. Decentralized Exchange (DEX)

Centralized Exchange

Centralized exchanges were the earliest entry point into the world of crypto. They’re platforms that allow you to buy cryptocurrencies and other digital assets using fiat money. The exchange is your trustworthy broker, ensuring that you do not lose money or digital assets during transactions. Examples of the most popular centralized crypto exchanges include:

• Binance
• Kraken
• Coinbase
• KuCoin
• Crypto.com
• Bitfinex

There are hundreds of others, but with a smaller market-share than those included in the above list. The best thing about these exchanges is that they are also hot wallets. It means that when you buy crypto on them, it’s automatically stored in the exchange-hosted wallet. The inhibition connected to these wallets is that they are custodial. Your private keys will be controlled by the centralized exchange. However, they’re still a great starting point in crypto transactions because they simplify the entire process and give you direct access to thousands of cryptocurrencies.

Benefits of Hot Wallets

• Convenience: You can download the apps or set up the app free of charge, set it up with ease and start using it even when you’re new in crypto.
• Integration: As mentioned, many hot wallets are hosted by CEXs. You can seamlessly access and transact with crypto, token and NFTs on the exchange.
• Accessibility: The funds in your wallet are easy to convert to crypto and back to fiat within minutes.
• Cost Effectiveness: Hot wallets are mostly free, unlike hardware wallets that can cost up to several hundreds of dollars. Therefore, you can download and set up as many as you need, depending on the nature of your crypto transactions.
• Versatility: Hot wallets come in countless forms and options. These include software for desktops, mobile applications and browser extensions. It makes them easy to use on the go.

The Risks of Using Hot Wallets

• Lack of Security: Hot wallets store your private keys on internet connected devices. It raises the possibility of someone accessing and stealing your digital assets.
• Cyber Threats: Hot wallet users are more susceptible to phishing than cold wallet users, which leads to loss of valuable tokens and other digital assets.
• Long-term Unsuitability: Hot wallets are great for short-term transactions and asset storage. However, you cannot hold your valuable digital assets in them in the long term, as hardware wallets are more appropriate.
• Compromised Devices: Any device with viruses, malware and other corrupt programs exposes the hot wallets to risks of asset loss.

Decentralized Exchange

Decentralized exchanges allow direct peer-to-peer transactions, eliminating the intermediary. The distributed ledger or blockchain takes the place of the third party. They’re different from the conventional exchange where an organization hosts and controls all transitions, instead, they use smart contracts. DEXs also allow you to transact autonomously on the blockchain. Additionally, they allow staking, loans and yield farming. Here are some examples of the most popular decentralized exchanges:

• OKX
• Pancake Swap
• ApeSwap
• Huobi/iToken
• SushiSwap
• Kine

Cold wallets are a little different from hot wallets because they’re disconnected from the internet. They’re often hardware devices that you buy and store with you. Once you set up the wallet, you’ll get a private and public key. The private key secures the location that your crypto occupies on the block chain. You can use the public key to send assets into the wallets, receive tokens and perform other transactions. Follow these simple steps to set up a cold wallet:

• Purchasing the Wallet: Buy a hardware wallet from a trusted company. Examples include Ledger, Trezor, and ELLIPAL. The typical hardware packaging will have the wallet, USB cable, and some cards to write seed phrases.

• Linking the Companion Software: Connect the hardware wallet to your phone or computer. Most cold wallets come paired with a software that you can access from the manufacturers’ page. Most hardware wallets guide you to the download page for the companion software application.

• Creating the Seed Phrase: The app will give you prompts on the steps to follow until to get the pin and also access the seed phrases. Write down the phrases in the cards and store them safely.

• Creating a Wallet: Create separate wallets for all software applications you’ll be working with. For example, you’ll need a separate Bitcoin wallet for Bitcoin and a separate Ethereum wallet for Ethereum.
• Linking a Hot Wallet: Once the setup is complete, you can link a hot wallet to spend and sign transactions.

The Benefits of a Cold Wallet

• Your private keys are out of reach of the internet, even when the wallet is connected to a device. This eliminates the chances of key theft and loss of digital assets.
• Software that facilitates direct trading from hardware wallets is currently coming up.
• You can store the keys to all assets from different chains in one place without worrying about blockchain compatibility.
• You verify transactions on the hardware device, minimizing the chances of someone else making transactions with your digital currency.
• Cold wallets aren’t susceptible to computer viruses and other malware.

The Risks of Using Cold Wallets

• Cold wallets are costlier than their hot counterparts, which are often free.
• Most users complain of a confusing first time user experience. The inability to write the seed phrase during the initial setup can mean a complete loss of access to assets.
• Compromised and counterfeit cold wallets can cost you all your crypto.
• Users have to download a separate wallet for different applications.

Importance of the Wallets

Web3 is set to revolutionize how people interact with the internet, and wallets that can access dApps will keep gaining prominence. Here are some ways in which wallets are important:

• They have a friendly user interface and offer users access to trading and storage services with a few minutes of setup.
• They have community support in the form of DAOs where people learn from each other and explore the full potential of Web3.
• They enhance anonymity when performing online transactions.
• They give users complete control over their assets, and also protect them from attacks that could lead to asset loss.

Hot Wallets

Hot wallets are internet-enabled and always online. They include all wallets stored in devices such as phones, computers and other gadgets that can connect to the internet. Examples of hot wallets include: Coinbase, Electrum, MetaMask and Exodus among others. Hot wallets also fall into the following categories:

Desktop Wallets

A desktop wallet is simply an application you install on your computer and use to manage your private keys. The key feature of a desktop wallet is that it is technically a hot wallet since it’s always connected to the internet when in use. However, since you’re not on a crypto exchange, the wallet is non-custodial, meaning you have complete control of the private keys and your assets. Desktop wallets offer a little more security than what mobile wallets offer, but a little less than what hardware wallets offer.

Mobile Wallets

Mobile wallets are software programs that secure your funds and allow you to interact with them using a phone or other mobile device. Mobile wallets offer the least level of security as they’re most vulnerable to hacking.

Cold Wallets

Cold wallets are different from hot wallets because they store your crypto offline. Most cold wallets resemble a flash drive or paper and remain offline most of the time. They hold the private keys to your assets. Here’s more about cold wallets:

Hardware Wallets

Hardware wallets are physical devices that store the private keys to your crypto. Even though some hardware wallets resemble a credit card, the majority of them look like a flash drive. Examples of hardware wallets include Ledger Nano X, Trezor Model T, and KeepKey among others.

Paper Wallets

Paper wallets are pieces of paper containing your private keys and the QR codes you can use to facilitate digital transactions. Paper wallets are removed from the internet and cannot be connected to it, which makes them more secure than hot wallets.

The Benefits & Drawbacks

Benefits of Web3 Wallets

These wallets offer the following benefits to everyone transacting on them:

• Security: There’s no third party controlling transactions, instead, the more reliable and immutable blockchain verifies and records transaction data. This speeds up and heightens the safety of the transaction.
• Convenience: You can receive, send and perform other transactions with your digital assets from anywhere in the world as long as you have access to a device that can log you onto your wallet.
• Privacy: The wallets are non-custodial, which means there’s no third party accessing information about your transactions. All transactions happen on a secure and highly decentralized blockchain.
• Autonomy: You do not need approval from anyone to make financial transactions. You can simply log onto your device and initiate transactions. The smart contract system used to verify transactions does so automatically, provided all the conditions have been met.

The Potential Drawbacks of the Wallets

• Compatibility issues: The wallets aren’t automatically compatible with all the blockchain networks you might want to transact on, which limits your operations.
• UX problems: Some have complicated user interfaces, which makes it hard for first-time users to install and operate them.
• Transaction fees: Some wallets charge extremely high transaction fees, limiting your profit.

Conclusion

Web3 is taking the power to control digital transactions from mainstream financial organizations and giving it to the users. Peer-to-peer and blockchain transactions will overtake the current systems controlled by centralized authorities, and the wallets are here to ensure the user gets complete autonomy over their assets. It is important to learn how crypto and related transactions can improve when you invest in decentralization.

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