The Best DeFi Wallets

There are many DeFi wallets out there offering different level of security, features and much more. So what is the best DeFi wallet? Well, that is subjective and the answer is unique to each user. In this article, we will look at the best DeFi wallets currently out there and available to everyone. We will showcase the features which they have in common, differences, the level of KYC (Know Your Customer) and much more.

Also, if you are already a prominent Web3 user, then you should definitely know what MetaMask wallet is. If that is the case, then definitely check our previous articles on this subject and in particular - how to connect MetaMask to Arbitrum and MetaMask to Polygon.

What is a DeFi wallet?

A DeFi wallet is essentially a digital wallet based on web3 technology and allows you to store your digital assets such as cryptocurrencies and collectables – Non-Fungible Tokens (NFTs). These wallets are different to existing digital wallets such as Revolut, Etoro or Skrill as they allow users to interact with the blockchain directly and send funds to different Ethereum, Bitcoin, Solana or other crypto addresses on the existing blockchains.

Typically, users start their crypto journey by buying tokens on notable exchanges such as Binance, Kraken or Coinbase. Once cryptocurrencies or tokens are bought, then the next step is to exchange, trade or store them in a cryptocurrency wallet for additional security and smooth allocation of funds. As such, there are two types of wallets custodial and non-custodial. Custodial wallets are wallets within the exchanges them selves, while non-custodial wallets allow users to own private keys which in turn help prove ownership over funds associated with the wallet’s address.

In contrast, whenever crypto digital assets are stored on a custodial wallet, the exchange or third party provider controls private keys. In other words, the exchange itself is responsible for your assets bought through it and has full custody of them. As such, if the exchange crashes or disappears, so will your assets. Therefore, it is much more secure to own anon-custodial wallet and to have your cryptocurrencies or tokens associated with it being the option which offers more security.

DeFi Wallets

DeFi wallets as mentioned above are the wallets which offer the full decentralized experience and allow users to participate in DeFi. Non-custodial wallets are the other term for them as they are only associated with your own publicly listed (on the blockchain) wallet with your own private key which is unique to each user. The security layers of DeFi wallets include – 2FA (Two-Factor Authentication), Face ID (Facial recognition for mobile devices– e.g. MetaMask) and Multi-Sig support. In addition, they are all compatible with Web 3.0 interfaces while being available on Desktop and in some cases mobile devices.

MetaMask Wallet

For anyone who is just diving into DeFi, MetaMask is one of most-common and widely implemented DeFi Ethereum wallet. Essentially, this is the meta wallet for anyone who want to participate, own, swap and trade Ethereum digital assets and other currency. The biggest benefit of MetaMask is by far the absence of KYC which allows for many users to create their wallet within minutes easily.

Additionally, as a cryptocurrency wallet, MetaMask provides users with several essential functions. Users of the application or extension receive a key vault, token wallet, secure login, and access to a token exchange as they download MetaMask. MetaMask users can purchase, store, swap, and manage all their tokens/coins. Moreover, MetaMask can host a vast selection of different ETH-based currencies and tokens built using, for example, the ERC-20 and ERC-721 standards. To learn more about MetaMask, please check out our other articles on How does MetaMask wallet work or how to connect MetaMask to popular Layer2 solutions such as Polygon, Arbitrum or Optimism.

As such, we will look at other DeFi wallets which are considered best by the wider community starting with Phantom wallet.

Phantom Wallet

Phantom is a DeFi wallet with built-in swap, staking, NFT display and crypto management capabilities. It’s available on the Solana blockchain and will be expanding to Ethereum as well. This wallet is deemed to the best Solana wallet out there. You can use this wallet to participate in transactions which are based on Solana and to buy various cryptocurrencies and NFTs on NFT Marketplaces which support Phantom. The Phantom Wallet is non-custodial, meaning that users hold their own private keys. Therefore a lot of the Phantom Wallet security lies in the users’ hands and not a 3rd party provider or exchange.

When users create a new wallet they will be prompted to write down their secret recovery phrase which is a collection of 12 unique words. These words are what would be required should a user need to restore their wallet. Some of the benefits of Phantom include a fast transaction speed and payment processing. Additionally, there is support staking and possible ledger connectivity as well as NFT display.

The major pitfalls of Phantom wallet are that is only available to Solana and there is no mobile application supported. The only way to use Phantom is via the browser extension. However, Phantom wallet’s team has already addressed this issue and announced in November 2021 that a mobile app is in the making. Also, swapping on Phantom is not free and costs can vary.

Coinbase Wallet

Coinbase Wallet is a separate DeFi wallet from the Coinbase app which features a way for users to store cryptocurrencies and as of recently to review owned NFTs (on Desktop devices).

Similar to some of the wallets above, it features native token swaps within the wallet itself and support for decentralized saving accounts. Users have private keys which are protected with security features, biometric authentication and optional cloud backups.

Coinbase Wallet utilizes a WalletLink feature to connect to dApps giving the opportunity to users to use it via a browser integration through the Coinbase Wallet extension as well.

There are multiple benefits to the Coinbase Wallet such as its great UI and UX designs which allow for quick use and ease of access to DeFi products. This is supported by the wallet’s ability to process debit card payments and SEPA transfers which speed up fiat to crypto fund allocation. It also has native dApp support for token swaps and savings as well as iCloub backup for private keys. Moreover, now users have the ability to view their owned non-fungible tokes in Coinbase Wallet (for Desktop). Lastly, the wallet supports Layer-2 solutions such as Polygon and Optimism.

Rainbow Wallet

Rainbow Wallet is another a non-custodial wallet for Ethereum and currently supports only iOS devices with an Android version coming soon as the Android BETA is already in construction and available to certain users. The wallet features a greatly designed and responsive interface with connection to DeFi products through its Wallet Connect integration functionality. In addition, the Rainbow wallet supports token swaps within the mobile application through Uniswap and allows user to view supported NFTs. Similar to Coinbase Wallet, it offers iCloud private key backup and tracking of Uniswap Liquidity Positions again within the app itself.

Benefits of the Rainbow Wallet include an amazing interface, especially for mobile app lovers and multiple native DeFi integrations such as Swap and Save. Another benefit is the ability to showcase NFTs and to follow Uniswap Pools. On the other hand, the cons of the wallet are related to it being only available on iOS which massively reduces users who can use it at the current state of Web3.

Argent Wallet

Argent is yet another Ethereum-based DeFi wallet with one of the most secure experiences for interacting with dApps. Security is key to Argent as its approach is to users to avoid having direct management of private keys to access funds in the wallet. Instead, Argent has applied a recovery feature – the Guardian system. This type of system allows for a set of trusted users or devices to authorize recovery attempts.

The benefits of using Argent Wallet include its integration with several DeFi protocols directly within the app itself and its focus of security with private key management. The second best feature of Argent is the removal of Ethereum transaction fees. Therefore, Argent has simplified a lot of processes for its customer by paying for user fees. However, this comes at a cost which is incurred by the wallet’s other fees. Overall, using argent is very simple and accessible for beginners. The disadvantages of Argent are that this is an Ethereum-only wallet and does not support other blockchains. They’ve implemented the full range of coins and tokens that the Ethereum blockchain has to offer. The cryptocurrencies that are supported by Argent are therefore limited to the tokens found on the Ethereum blockchain. The good news is that virtual every asset that you can think of is available in one form or another.

Exodus Wallet

Exodus is a crypto DeFi wallet which allows users to send, receive and exchange tokens on both desktop and mobile. The hardware wallet integrates with different applications easily and provides live charts, a built-in exchange, portfolio management as well as 24/7 support which makes trading crypto exciting.

It currently supports over 100 cryptocurrencies and is available on both Android and iOS for mobile users. Data is simultaneously synchronized with the desktop wallet and allows for quick access between the two. In addition, Users who are part of Exodus can use their Trezor hardware wallet which comes with extra security layers. Therefore, any digital asset bought on Exodus can be secured offline on the Trezor hardware.

One of the biggest benefits of Exodus is not only its multi-application access, but its accessibility for beginners entering the world of crypto.

Ambire Wallet

Ambire is a recently launched DeFi wallet after its massive BETA success and after Raising $3 Million in a Private Funding Round. Similar to the other wallets in this article, Ambire is a non-custodial wallet. It is also the first wallet solution to eliminate the need for installing web extensions (such as MetaMask or Phantom) or writing down phrases.

In contrast, Ambire uses an email registration or the option of connecting an existing browser or hardware wallet in order to sign in. As such, the users can secure their assets without giving control to third parties. Moreover, this is a massive benefit since users can skip heavy KYC and enjoy transacting with their funds by only providing an email address.

However, in this case the registered user email will be used to provide security as a two-factor authenticator(2FA). Once registered with Ambire Wallet, users can send and receive crypto digital assets as well as purchase cryptocurrencies using fiat funds. Another interesting feature of Ambire is that the DeFi-centric wallet is controlled by the Ambire decentralized autonomous organization (DAO) and its $WALLET token holders, who earn fee revenues generated by the platform.

Lastly, Ambire’s team has prepared massive benefits to early adopters who fund their Ambire wallets in the next four years. Supported networks include – Ethereum, Binance Smart Chain, Polygon (Matic), Avalanche and many other ERC20 tokens.

1inch Wallet

1Inch Wallet is a mobile wallet developed by Anton Bukov. It is designed to provide users with easy access to the DeFi market. Also, allows for interacting with the web3 world within its mobile application.

Users can use the wallet to store, trade, and transfer cryptocurrencies supporting major networks such as Ethereum and Binance Smart Chain. In addition to that its ecosystem includes more than 70 protocols and more than 19 billion dollars into liquidity.

There is one single drawback of the wallet and that is– it is exclusively available to iOS devices only. However, 1inch’s team is planning to include it to Android in the near future according to the official website. Therefore, a large proportion of the crypto community will be left out.

Regarding features, the app has three main components. The first one allows users to view their portfolio, the second shows its live valuation and the third shows the individual assets owned. Lastly, an important benefit is that transactions are processed instantaneously within the application.

The Best DeFi Wallet

Decentralized applications have grown rapidly and will continue to improve in the next few years. DeFi wallets are no strangers to such innovation and will provide more and more solutions for users to interact with Web3 and blockchain applications.

A wallet with a good design can make the authentication and transaction experience accessible for both beginners and veterans in this field. Security and KYC are just some of the factors to consider when choosing where to store your digital assets. As such, different wallets will appear to different users.

Consequently, some wallets have taken the approach to focus on security while others showcase the many features of DeFi and light KYC. As a result, whether you prefer to choose one or the other the choice is entirely yours as every person will find different features more appealing. Notably, MetaMask and Phantom Wallet will continue to be the meta wallets due to their massive appeal and mass adoption to most crypto-related projects and NFT Marketplaces.