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As a budding investor, you're probably looking for the next new and exciting way to make money. And at this point, it's difficult to find more promising opportunities than those offered in DeFi. For those unfamiliar with the term, DeFi stands for Decentralized Finance and is an umbrella term that encompasses all financial products that run on decentralized networks rather than traditional financial infrastructure.
One of these types of services is called a "wallet." A wallet is just like your physical wallet in that it holds things such as cash or credit cards, or even cryptocurrency! But instead of holding your items - it contains digital assets which can be anything from tokens issued by dApps and protocols (like stocks) to cryptocurrencies like Bitcoin or Ethereum.
A DeFi wallet is a digital wallet that stores your crypto and decentralized application tokens. This includes the ability to keep, invest in, and leverage assets through smart contracts. DeFi refers to decentralized financial applications on the blockchain, which have created new ways for people to borrow money, trade stocks, or speculate on crypto-currencies.
If you're new to DeFi or just want to learn more about how your funds are stored securely, it's essential to start with a functional wallet that can be used across all of your favorite dApps.
We'll begin by downloading one of the two recommended wallets:
Remember to write down your private keys and remember your seed phrase if you ever lose your device where your wallet is hosted.
There are many different types of wallets available, but these two have been around for quite some time and offer great stability in their product lines.
Other wallets to consider
To keep your funds’ safe while on the go, a hardware wallet like Ledger is the best. It offers easy-to-use apps and robust security features, excellent so you never have to worry about forgetting your password again (or worse). These wallets are also known as cold wallets since they’re not always connected to the internet. This makes them totally secure and safe from hackers.
For online storage purposes, there are two types of wallets to choose from.
The first one is a web3 wallet that allows you to interact with dApps. For example, you’ll use your MetaMask wallet connected to BSC and you are using it to access Pancake.Finance with that wallet address.
The second wallet is Exodus, which doesn’t connect with Web3 projects. It’s a mobile wallet that allows you to store and HODL your crypto funds in one place. These wallets are good for people who want to hang on to their funds and not actively use dApps.
DeFi wallets are a new and modern way to store your cryptocurrency. They solve many of the traditional banking methods’ problems, like high fees, lack of privacy, restrictions moving money, or receiving money.
DeFi is decentralized finance - meaning it's not owned by anyone, company or person. This means you're in control of your funds 100%. You can also avoid the hassles of wire money overseas and paying ridiculous fees to send and convert money.
Investors should use a DeFi wallet because they are private while still being secure and easy to use. With traditional bank accounts, people often pay exorbitant fees for using their own money when they want.
A DeFi wallet comes with its pros and cons - while it can be safer because of the security that it offers, there is also the risk of losing your private key or passwords which will result in loss of all funds stored within this account. Check out our DeFi Dictionary for more terms.
