The wallet represents Binance’s foray into providing users broader access to Web3 services beyond just trading on its platform. It aligns with Binance’s strategy to expand its crypto product suite amid declining spot trading volumes in recent months.
- Binance has launched a new self-custody wallet integrated into its mobile app, called the Binance Web3 Wallet.
- The wallet uses multi-party computation (MPC) to generate three key shares, removing the need for seed phrases. One share is held by Binance, one on the user’s device, and one encrypted in cloud storage.
- This simplifies onboarding for new crypto users compared to regular wallets, but users still need to safeguard their keys and password.
- Features include asset transfers via Binance Bridge, access to dapps, staking/lending, and exclusive airdrops.
- Binance said the wallet “lowers barriers” and priorities user-friendly access to Web3 and self-sovereign finance.
- But users should still remember it’s a self-custody wallet, so losing keys/password means funds can’t be recovered even by Binance.
- The launch aligns with Binance’s expansion into other crypto services amid declining spot trading volumes and loss of market share to rivals.
Binance is marketing the Web3 wallet as a smoother entry point to decentralized finance (DeFi) and self-sovereign finance. The wallet uses multi-party computation (MPC) to split private keys into three “key shares” held in different locations.
This removes the need for manually recording and securing long seed phrases. Users retain control of two key shares, while Binance holds the third. Access requires two shares, providing user control while mitigating key loss risks.
#Binance is now your one app for all things Web3.
Our new Web3 Wallet lets you connect DeFi to CeFi in one click.
Try it and let us know what you think.
— CZ ???? Binance (@cz_binance) November 8, 2023
However, Binance stressed that as a self-custody wallet, users must still diligently safeguard their keys and recovery password. Irrecoverable loss of keys/password would still result in permanent loss of funds, even for Binance.
The Web3 wallet also enables easy transfers between different blockchains via Binance Bridge. Users can access a tailored selection of DeFi apps spanning NFTs, gaming, metaverses and more.
An “Airdrop Zone” provides exclusive token rewards and direct access to DeFi instruments like staking and lending. This provides a streamlined experience for leveraging DeFi on Binance compared to ordinary crypto wallets.
While the wallet abstracts some crypto complexities, it remains to be seen if Binance can successfully onboard less technical users without compromising decentralization benefits. Nonetheless, it appears well positioned to capture new adopters and deepen engagement across its crypto ecosystem.