Web3 wallets are “an integral part of the Web3 framework, empowering individuals with the ability for self-sovereign finance,” said Binance CEO Changpeng “CZ” Zhao in a statement accompanying the announcement.
Self-custody wallets are those in which the user is in complete control over the wallet rather than trusting a third-party service to manage transactions and custody.
The Binance Web3 Wallet is built into the company’s mobile app, with features including an integration with Binance Bridge that enables users to easily transfer assets between different chains.
The wallet also presents users with a curated selection of decentralized applications (dapps) as well as an “Airdrop Zone” for exclusive airdrops and direct access to staking, lending, and other financial instruments.
Binance rolls out MPC key-shares
One of the wallet’s key selling points is its use of multi-party computation (MPC) to simplify the onboarding process for new users.
Instead of having to use a seed phrase, the wallet uses MPC to generate three separate key-shares. One is protected by Binance itself, one is held on the user’s device and a third is encrypted through a recovery password and saved on either iCloud or Google Drive.
Access to the Web3 wallet requires two of the three key-shares, so if one is lost or compromised the user can still gain access to their funds.
While the wallet abstracts away one of the pain points of onboarding new users to Web3, Binance stressed that it’s important to remember that it’s a self-custody wallet. If the user loses the recovery password for their encrypted key-share, and uninstalls the Binance app or loses their key-share device, they won’t be able to recover the wallet.
Nevertheless, it represents a step towards “financial freedom,” the exchange said in its announcement. “The common stress of worrying about losing one’s seed phrase is removed, so that we can introduce a secure and smooth entry point for millions of users to safely and easily explore the Web3 universe,” said Binance’s head of regional markets, Richard Teng, in a statement.
Zhao said that the wallet, “lowers the barriers of entry for users to achieve full self-custody of their assets.” Ultimately, he added, “our priority is to ensure users can explore Web3 with us within a user-friendly and protected environment.”
Edited by Liam Kelly.