In order for DeFi to be successful, it’s crucial that the gateways for interacting with web 3 are intuitive, secure, and accessible while maintaining the core ethos of “being your own bank”.
Over the past few years, we’ve seen drastic improvements to wallets and other asset management tools, allowing investors and users to safely and easily access the next generation of financial technology.
An Overview on DeFi Wallets
Thanks to the non-custodial nature of DeFi wallets, users can safely store their own funds without having to rely on third-party institutions to hold their assets.
In the earlier days, wallets such as MyEtherWallet dominated the market while providing clunky UI/UX. Fortunately, within the past year, many wallets have upped their game and are creating better interfaces with significantly better user experience.
The vast majority of DeFi applications are accessed by connecting one of the web3 wallets mentioned below, so let’s dive into the overarching characteristics along with our top picks
DeFi Wallet Characteristics
The core components of most DeFi wallets include:
- Non-Custodial – Users can send and transfer funds knowing they are the only one who has access to those funds
- Key-based – Underneath the hood, all DeFi wallets have a unique keypair. This is different from centralized wallets as users are responsible for the safekeeping of their private keys, often introduced through a 12-word seed phrase.
- Accessible – Virtually all non-custodial wallets can handle a suit of assets, with Ethereum-specific DeFi wallets allowing users to deposit ETH in tandem with stablecoins like Dai, ERC20 tokens like KNC and ERC721 tokens like Axies.
- Compatible – As stated above, virtually all DeFi wallets are accessed by connecting a web3 wallet. Mobile wallets have begun to integrate dApps browsers to make it easy to connect with DeFi applications without having to every leave the app.
Primarily used as a web browser extension, MetaMask is the gateway to easily access DeFi through any internet browser. Different plugins can be built directly into MetaMask, allowing it to take on a number of roles across different applications.
- MetaMask is the most widely supported wallet across the larger DeFi ecosystem
- MetaMask is ENS compatible, meaning users can attach a human-readable address like defirate.eth to their address
- MetaMask recently released their mobile beta, signalling that the wallet will soon make it’s way to mobile devices.
- When sending a transaction on MetaMask, users can easily “speed up” their transaction during times of congestion.
Unlike Coinbase’s consumer application, Coinbase Wallet stores private keys directly on your device. This allows users to buy and store any ERC20 tokens, collect NFT tokens and interact with decentralized applications all without losing custody of the underlying asset(s).
Why Coinbase Wallet?
- With the recent introduction of in-app lending on platforms like Compound and dYdX, Coinbase is our suggested mobile choice for interesting with DeFi.
- Easily transfer funds to and from your Coinbase account in a few taps
- Leverage other DeFi applications like Maker via their in-app browser.
Argent offers a “radically better crypto wallet” that boast no paper backups, simple addresses, and free transactions. Argent’s mission is to help everyone benefit from the decentralized web and is said to be inspired by the potential to reverse the massive concentration of wealth and power of today’s internet. In recent developments, Argent has been at the forefront of the mobile-DeFi experience by integrating a number of popular products for users to take advantage of.
- Choosing a mobile-first approach, Argent offers a Venmo-like experience geared at non-technical users.
- Thanks to metatransactions, users do not have to pay transaction fees. This means there is no need to deposit ETH to get started.
- Argent users can directly leverage the lending capabilities of Maker and Compound in-app.
- Argent has confirmed they will be supporting a number of other DeFi applications in the coming year.
- With social recovery, it’s less likely to get locked out of your wallet thanks to “Guardians”.
Key Points to Consider
As we’re starting to see a competitive wallet ecosystem emerge, here are a few of the boxes you should be sure to check before getting started:
- Access Points – As we mentioned, the aforementioned wallets are your access point to the larger DeFi ecosystem. Before sending funds to a given wallet, be sure to check that it’s supported by the product you are hoping to use.
- Seed Phrases – Perhaps the biggest deterrent to non-custoidal wallets is the sense of ownership you must have. In 99% of cases, if you lose your seed phrase, it’s impossible to access the funds inside of the wallet. As such, we highly recommend writing down your seed phrase in tandem with saving it on your phone or computer as an extra precaution.
- Supported Assets – Different wallets support different assets. We recommend doing due dilligence to make sure your wallet is compatible with whatever wallet you wish to store. For example, MetaMask DOES NOT allow you to store Bitcoin.
- Social Presence – Wallets which have community-backing are often most active on social media. If you’re on the fence about using a wallet, check out their Twitter to see if the community is engaging with their posts as a signal of trust.
DeFi Wallet List 
Here’s a look at all the wallets currently on our radar in 2020.
- Burner Wallet
DeFi Wallet Comparison
|Name||Platform||App Rating||Differentiating Features||Supported Assets|
|MetaMask||Web browser extension||4.0||Web browser-enabled transactions||ETH, ERC-20, ERC-721|
|Coinbase Wallet||Mobile iOS / Android||4.7||dApp Browser & Coinbase Integration||Coinbase CEX supported assets (BTC, ETH, ERC-20, ERC-721)|
|Brave||Web browser extension||N/A||Data Privacy||ETH, BAT|
|MEW||Web||4.6||Hardware Wallet Integration||ETH, ERC-20|
|MyCrypto||Web Browser / Hardware Wallet||N/A||Hardware Wallet Integration||ETH ERC-20|
|Trust Wallet||Mobile iOS / Android||4.8||Binance integration & support||Binance CEX supported assets (BTC, ETH, ERC-20, ERC-721)|
|InstaDapp||Web Browser||N/A||Manage DeFi assets||ETH, ERC-20, ERC-721|
|Argent||Mobile iOS / Android||4.8||Seedless Recovery, Meta transactions||ETH, ERC-20, ERC-721|
|Gnosis Safe||Mobile iOS / Android||5||Gnosis Safe Authenticator||ETH, ERC-20|
It goes without saying that asset management tools are absolutely essential to the long term success of DeFi. These tools allow users to intuitively manage their assets in a secure manner while also interacting with DeFi and other web 3.0 applications.
The rise of smart contract wallets provides much-needed improvements in accessibility for users with the introduction of seedless recovery tools, daily limits, and other legacy banking functionality. When the complexities of blockchain technology and decentralization are abstracted, asset management tools act as the foundation for banking the unbanked and building an open financial system.
We’ll continue to regularly lookout for new asset management tools as they begin to pop up. If you’re creating a non-custodial wallet and would like to be featured on this page, please feel free to fill out our contact form.
What makes a DeFi wallet different from a regular wallet like Binance?
With DeFi wallets, there is no need to complete KYC or provide any background information. While there are largely no fiat onramps when using DeFi wallets, they come with the flexibility of integrate across a wide variety of applications in the DeFi ecosystem, rather than being fragmented to only one exchange like most legacy wallets.
DeFi are debatably the safest options on the market. The catch is that you are entirely in control of your own destiny. If you lose your seed phrase, in many cases there is no customer support to be able to “reset” your password.
DeFi wallets have no deposit limits. While some wallets like Argent may have daily limits, there are largely no restrictions to the amount of capital which can flow in and out of a DeFi wallet on any given day.
Most DeFi wallets are Ethereum-native, meaning they support Ether, ERC20 tokens and ERC721 tokens. This also includes protocol specific tokens on lending platforms like Compound (cTokens), Aave (aTokens) and Uniswap LP tokens. Similarly, DeFi wallets can hold more specialized assets like Set Protocol Sets and Synthetix Synths.
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.