The spate of exchange and protocol failures over the last six months has brought the issue of misuse of user funds to the forefront of the crypto conversation. Incidents, such as the FTX and Celsius failures, have reignited concerns among millions of users concerning the safety and security of funds. To grant users straightforward access to the crypto ecosystem and overcome the complexity, self-custodial and multi-chain wallet service provider Trust Wallet is rolling out a new browser extension crypto wallet. The upcoming wallet is designed to support compatibility with multiple popular blockchain networks and will work within Chrome, Opera, and Brave web browsers.
The central issue arises when users park funds in certain exchanges or service providers that manage access to users' private keys. When an external organization controls the private keys to a user's crypto holdings, it can move the crypto without user input. This theme has played out multiple times as organizations reinvest customer funds to achieve higher returns by risking those very funds without user consent.
By design, custodial wallet services like Coinbase (NASDAQ: COIN), Kraken, Binance, and dozens of other centralized exchanges hold onto users' private keys, meaning users don't really own their keys or the assets stored in the exchange's wallets. However, lured by attractive yields, services, or benefits certain providers offer, many users willingly give up their control.
While custodial wallet services are often less secure than non-custodial wallets, many users prefer to opt for them because they offer ease of use and involve minimal responsibilities on the users' end. However, this ease of use and minimal responsibility comes with a few security risks, specifically when hackers breach centralized servers, exploit private keys, and process transactions at will.
Non-custodial wallets take a different approach by being entirely user-managed. This means the holder is the sole guardian of their private keys and assets stored in their wallets, also known as self-custody. It removes the need for third-party service providers, making it more secure than its custodial counterpart. Though there are many types of non-custodial wallets, handling self-managed wallets can be complex, especially when navigating the decentralized finance (DeFi) protocol and decentralized application (dApp) landscape. That's where Trust Wallet comes in.
Unlocking the Crypto Landscape for Desktop Users
Together with its mobile wallet, which counts over 10 million daily active users, Trust Wallet's new browser extension wallet is designed to improve the Web3 experience by advancing accessibility for desktop and mobile device users.
Trust Wallet's forthcoming browser extension will enable users to manage, store, send, and receive over eight million different tokens across Ethereum (ETH-USD), Binance Chain, Polygon, Avalanche, Solana, and hundreds of other EVM-compatible blockchains. The Trust Wallet team plans to add more chains to the lineup of compatible options in the future.
Keys are stored directly on the device running the wallet, meaning there is no need for users to access other services and reenter public and private keys every time they wish to transact. Moreover, users generate a recovery phrase to ensure wallets are accessible if the private key is forgotten or lost.
As part of its pipeline, Trust Wallet will also provide a built-in dApp browsing experience for users that covers Web3 gaming, the metaverse, DeFi, and less-known tokens, assisting users in exploring the growing number of products and services emerging across the crypto ecosystem.
The latest protocol and exchange failures again highlight that users must take a more active role in storing and securing their coins and tokens. Custodial wallets may offer an attractive on-ramp, but the risk of exploitation and misuse remains. With web browser-based wallet applications and extensions simplifying crypto storage and exploration, it's worth minding the recurring dangers of trusting third parties with private keys when approachable, non-custodial options exist.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.