Key Insights
- Binance launched a new Web3 crypto wallet to compete with MetaMask and TrustWallet.
- The wallet aims to provide secure access to DeFi through features like multi-party computation.
- It’s unclear if KYC will be required, which could contradict the ethos of self-sovereign finance.
Cryptocurrency juggernaut Binance made a big move into Web3 wallets this week with the launch of its self-custody crypto wallet. Unveiled at the Binance Blockchain Week event, the new wallet will support 30 different blockchain networks.
Binance is framing its wallet as a secure gateway to decentralized finance (DeFi) apps and services. The company hopes to compete with popular incumbents like MetaMask by addressing one of the biggest vulnerabilities in Web3 – private key management.
Web3 wallets represent more than just storing digital assets; they are an integral part of the Web3 framework, empowering individuals with the ability for self-sovereign finance, said Binance CEO Changpeng Zhao.
However, the liability of securing a private key often proves too risky for average users. Once a hacker gains access to a private key, funds can be drained instantly with no recourse.
Read also: What is Binance Web3 Wallet?
To mitigate this risk, Binance is implementing multi-party computation (MPC) in its wallet. This method splits a private key into three “shares” held by the user and Binance servers. No single party has the full key, enhancing security.
Binance is also emphasizing user-friendliness for its wallet. Features will include staking, lending, and borrowing directly through Binance’s mobile app. The company wants to make exploring DeFi as easy as possible.
Still, some critics are questioning whether Binance will require know-your-customer (KYC) identity checks to use its wallet. Mandatory KYC would contradict the ethos of self-sovereign finance. Binance has not yet provided clarity on its KYC policy.
As hacks and scams run rampant in the Web3 space, Binance is betting that prioritizing security and ease of use can attract more users to its ecosystem. But competition is fierce, and only time will tell if its wallet can unseat incumbents.