DeFi Wallet Development
Decentralized finance is all about facilitating a direct peer-to-peer transaction without the intervention of any human (or) third-party services. Thus it promotes complete ownership over one’s funds. This is regulated by smart contracts, an automated set of pre-defined codes that executes functions based on the pre-defined conditions. But, DeFi cannot really sustain without its powerful DeFi wallets, because they prove to be the crux element of the mechanism. If the wallets aren’t secure enough, the purpose of decentralization is lost. Hence, DeFi adopters must be aware of the essential requisites of a quality wallet, its types, and benefits.
This article discusses all the key elements related to DeFi wallets and gives you a crystal clear picture of how to meet the demands of your DeFi platform users.
Custody vs Non-custodial wallets
Before we dive into DeFi wallets, it’s important to differentiate between custodial and non-custodial wallets.
Here are the primary differences.
Shortcomings of custodial Wallets:
- It’s a digital wallet that stores the private keys of customers and provides back-up and security support.
- Custodians have control over our funds and security details.
- Lost private keys can be recovered with custodial wallets.
- In the event of a mistake, one can expect assistance from the admin.
- Prone to hack and data breach.
- Belongs to a centralized system.
Benefits of DeFi (non-custodial) Wallets:
- It’s a digital wallet that provides users with ownership over their funds.
- 100% control over their digital assets.
- Private keys will (must) not be shared with anyone.
- In the event of a mistake, users are solely responsible.
- Immune to hack and data breach.
- The core part of a decentralized system.
Examples of DeFi wallets
The private keys are not shared with anyone. They are stored in browsers. They also provide us the secret seed phrases to recover our account.
Example: MetaMask, MyEtherWallet, and Guarda.
The most secure form of crypto wallets. They are physical wallets like pen drives. Hence, hackers cannot access your wallet.
Mobile Light wallets:
Wallets that can be installed on our mobile phones. It is better to download such apps from the authorized official website of the organization.
Wallets that are installed on the computer. When connected to the internet, these wallets must be handled with care.
Example: Electrum and BitGo.
How safe are DeFi wallets?
- DeFi wallets’ private keys are not stored elsewhere. Hence, nobody can break through the system.
- Two-factor authentication is mandatory in any DeFi protocol. Hence, the user is alerted over any potential unauthorized access.
- Multi-signature technology requires more than one signature to access a particular account.
- The transaction limits set will not let anyone withdraw all the money at once, even if it’s the owner of the wallet.
- When the majority of funds are stored in cold wallets, the hacking probability is practically zero.
Growth of secure DeFi protocols
The DeFi protocols displayed are known for their quality services in terms of every parameter, from security to usability. Hence, their growth has been exponential.
Business opportunities in DeFi protocols
Based on reports from the DeFi pulse, it took DeFi two and a half years to reach the $1 billion mark in total value locked in contracts. However, after just 6 months, the value scaled to a $2 billion figure and still continues to grow exponentially.
“DeFi is just beginning.”
-Da Hongfei, Neo founder.
Develop DeFi wallets with Osiz Technologies
Osiz Technologies, a leading DeFi Development Company
, has 10+ years of experience in blockchain technology. Our pool of blockchain architects and DeFi developers are guaranteed to deliver quality DeFi wallet and platform development services and launch your smart-contract based DeFi platforms in the global DeFi market.