Overview of Web3 Wallets – What They Are, Pros and Cons, and Examples

Cryptocurrency world is quickly developing. While the past two years were full of hype around NFTs (non-fungible tokens) and Metaverse, lately, not much is being said about them. On the other hand, different themes and topics keep emerging, such as Web3.

With this new upcoming development in the world of the Internet, people can oftentimes get too excited and greedy about different options it offers and might underestimate the importance of security. However, that would be extremely unwise and foolish, especially with a wide variety of Web3 wallets that can help improve not only security, but in most cases also anonymity or interaction with the Web3 world. With that being said, let’s look at Web3 and some of the most used wallets in this sector.

What is Web3?

Before we give you examples and overview of concrete Web3 wallets, let us first introduce to you the concept of Web3 and Web3 wallets as such. Web3, also known as Web 3.0, is another iteration of Web, with the first two being Web 1.0 and Web 2.0. Web 1.0 was generally considered to be the static phase of the Internet, with Web 2.0 being dynamic.

Web 3.0 is expected to become the next phase or the latest generation of the Internet that will supposedly be the decentralized one. Thanks to the emergence of blockchain technology, Web 3.0 aims to give the power over the data back to the users and take it away from the corporations that are currently “running the Internet.”

This means that unlike the Web 2.0 generation of the Internet, which heavily relied on single points of failure usually represented by the given companies, Web 3.0 will try to utilize a more distributed and shared approach amongst everyone. Decentralized applications (dApps) can be one of the most important developments in Web3. They also have the power to help it progress, thus removing the issues connected to centralization.

What are Web3 wallets?

For navigating safely in the new revolution of the Internet, people can and are advised to use Web3 wallets. These are simply platforms and services that give access to Web3 space in a safe and usually pretty straightforward way. They offer various products and services depending on the type of Web3 wallet, but most of them tend to allow their users to use smart contracts, transact and store NFTs, develop blockchain platforms etc.

Depending on the wallet, people can also be able to swap between different digital assets right in the wallet without any need of an external exchange or middleman. Most of them serve either as browser extensions or as mobile or desktop apps.

Most of these wallets tend to be non-custodial wallets, which comes with its benefits as well as drawbacks. The benefit is that the users are fully in charge of their assets and own them. This means that unless they giveaway their keys or get hacked, there is a little chance of losing access to their digital assets. This however also means that the users themselves are in charge of everything. Storing the keys, making sure to have them safe and accessible, is solely the responsibility of the user, which is something that can scare some people.

The fact that the Web3 wallets are non-custodial is only one of the key features and characteristics connected to them. However, let’s explore together other features of these wallets and divide them into advantages and disadvantages.

Advantages of Web3 wallets

Some of the benefits of the Web3 wallets have already been mentioned, but this section offers a concise overview of the most important pros of these platforms and services.

1.Simplicity (user-friendly)

Since the vast majority of these Web3 wallets will try to tackle mainstream users one time or another, they tend to be designed in a way that is very easy to follow. User-friendliness is one of the key features of most of the Web3 wallets.

Thanks to this characteristic, it is usually pretty simple for the users to have their portfolio of digital assets concise and well taken care of. Moreover, the whole setting up process in some cases takes only minutes, making it much more desirable especially for nontechnical people or newcomers. Once the users set up their wallet, they can instantly start benefiting from other services and options that these platforms offer.

2.Anonymity

While anonymity and privacy are very important for some people in the cryptocurrency world, the majority of the crypto holders do not pay that much attention to it, which is a mistake. Web3 wallets however do not usually ask for any AML/KYC measures and steps while setting up the wallet.

This means that if the users use these wallets as intended and do not send any form of KYCed assets on those addresses, they can very simply have financial privacy thanks to Web3 wallets. If various users of these platforms interact between each other, the privacy of the sender as well as the receiver can improve significantly. If done correctly, the transactions can be untraceable, which is one of the key features of Web3 wallets.

3.Entrance to Web3

Web3 wallets can become “the place” to go for the users who are looking for different services connected to Web3. They have the potential to become “all-in-one” gateways for newcomers and advanced alike, since they are already offering numerous services and products to the users.

Due to the variability of services that these platforms and projects offer, it is important to find the right one for the needs of the given user. While we will explore some of the most popular Web3 wallets to help with the decision-making process, before we do that, we need to state a few drawbacks of these wallets.

Drawbacks of Web3 wallets

To make sure that we provide a well-balanced debate and analysis of Web3 wallets, we have also examined some of the cons of these projects.

Vulnerabilities

Just like with any service, platform or product in the cryptocurrency world, Web3 wallets are not perfect. Yes, they do have security as one of the biggest and main objectives. That however does not mean that Web3 wallets are without mistakes. However, most of the time the vulnerability will not come from the software as such, but rather from human error.

User responsibility

That leads us to the second pitfall of Web3 wallets which was already briefly described above. Since the users are fully in charge of the wallet and private keys to it, most of the mistakes, vulnerabilities or hacks of these services will happen due to human error.

This is something that many people underestimate, especially in the beginning. However, with most Web3 wallets the user is the sole person responsible for anything and everything that will happen with the given wallet. That is why the users should never underestimate it and should always step up to this role.

Technicality

While the providers and developers of these wallets try to do their best to make them as user-friendly as possible, they can still be perceived as technical for some users. Navigating especially through very niche terminology can be tricky and can make the user experience a bit more difficult, which however is not a pitfall of the Web3 wallets only, but mostly of the whole cryptocurrency world, which is still pretty new and developing.

Top 5 Web3 wallets

As of now, you might have a relatively good grasp of what Web3 wallets are, what they offer and where are its benefits and pitfalls. In this section, we will very briefly introduce the best-known ones that are not only popular, but that also offer different products, features or services, so that everyone can choose a Web3 wallet that would suit their needs the best.

1.Metamask

The first on the list of Web3 wallets is probably the most well-known as well as used wallets in the crypto space – Metamask. Metamask is a wallet that allows its users to store, buy, sell or swap tokens. It is estimated that there are currently about 30 million users of this wallet.

It is available not only as a web extension for the most popular browsers such as Chrome, but it can also be used as a mobile app both on Android and iOS. Metamask has been a go-to wallet mostly for Ethereum since its inception. This wallet allows easy entrance to the whole Ethereum ecosystem that does not only involve thousands of different tokens, but also dApps.

For more advanced and experienced users this Web3 wallet allows the interaction with dApps in a permissionless approach. This simply means that the users do not need to link their private keys to any dApp, enhancing the safety of the whole process.

2.Trust wallet

Trust wallet is the second Web3 wallet that everyone needs to know. This is mostly due to its ability to store almost any type of tokens possible. Trust wallet is blockchain agnostic, which simply means that assets from different chains can be stored all in one place. Through this,  users can store all the assets in one place, which makes the Trust wallet a go-to place if people are holding numerous different assets from different chains. 

Other benefits of Trust wallet include relatively simple interface, ability to store most types of NFTs, staking rewards of tokens such as BNB, Tezos or Cosmos, or stable and reliable mobile app. It also has an inbuilt browser for dApps. Thanks to this feature, users can look around for different DeFi products within one place.

This wallet is usually accessible through a 12-word recovery phrase for safety, but it also offers options of signing up with PIN or biometrics. Yet, due to the non-custodial nature of the wallet, the users are in charge of their assets at all times.

3.Argent

The third on the list is Argent wallet, which allows users to buy, earn, stake or trade different Ethereum assets on layer-2. This ensures lower fees, higher scalability and privacy of transactions. Argent, unlike Trust Wallet, is not blockchain agnostic, as it only supports solutions and dApps developed on Ethereum. The same applies for tokens and NFTs.

What is interesting about Argent is the fact that it uses “Bulletproof security.” This means that there is no seed phrase that users obtain, but they nominate “Guardians,” who will help in confirming the identity of the user’s account, in case a new device needs to be approved.

4.Rainbow

Next up we have a wallet called Rainbow. Once again this is a non-custodial wallet that supports mainly the Ethereum network. Thanks to this, people can also hold NFTs as well as different dApps right in this wallet.

Rainbow differs a bit from other wallets in its UX. As is described by its website, it aims to be fun and easy-to-use. The wallet as such comes with some handy features such as WalletConnect integration or built-in swap functionality. Currently it is available both on iOS and Android.

5.Zerion

Last, but definitely not least, we will briefly describe a Web3 wallet called Zerion. This intuitive mobile-first Web3 wallet helps its users manage their DeFi and NFT stacks. One of the benefits of this wallet is that it is capable of being connected to other wallets such as Ledger. Through this, users can manage their portfolios straight from one place.

Zerion however also offers trading possibilities through inbuilt aggregators. It also allows users to follow other wallets or favorite assets as well as receive notifications concerned with NFT drops. Currently it offers web-app, mobile-app and iPad app as well.

Conclusion

This article should serve as an overview of Web3 wallets. While we have described some of them, there are countless others that people should have in mind before making their decision and choosing which one, or combination of more, is the best suited for their needs. Yet, as we tried to portray, having a Web3 wallet can bring a lot of benefits to its users so they should definitely try to find some that works for them the best.