Binance, a leading cryptocurrency exchange, is stepping into the world of decentralized finance (DeFi) with its Web3 wallet. They shared this news during their Blockchain Week conference in Istanbul.
Meet the brand new #Binance Web3 Wallet!
Simple, convenient and secure.
Discover more 👇
— Binance (@binance) November 8, 2023
The Wallet Web3 aims to provide better engagement with the DeFi world, and it’s compatible with a whopping 30 blockchain networks. Changpeng ‘CZ’ Zhao, the CEO of Binance, underlined the role of Web3 wallets. He believes they do more than just store digital currencies. They are rather vital parts of the Web3 structure, giving people the reign of self-governed finance.
Binance Takes on DeFi Market
Binance’s recent launch has them going head-to-head with established market players like MetaMask and Trust Wallet. It’s worth noting that Binance actually bought Trust Wallet in 2018. They also recently introduced a futures market for the native token of Trust Wallet (TWT). This new development caused a 7% plunge in the token’s value in just one day. Binance is serious about growing its impact in the DeFi industry.
One should note that centralized exchanges such as Coinbase and OKX also provide Web3 wallets. Users can make a wallet using their phone apps. These wallets are used for different DeFi tasks, like staking, lending, and borrowing. But, it’s unclear if a “know-your-customer” (KYC) process is needed for wallet making on these sites because of regulation issues.
One of the most significant challenges associated with Web3 wallets is their vulnerability to hacking and exploitation. Gaining access to a private key can lead to the irreversible loss of all associated funds. Binance aims to address this security concern by implementing multi-party computation (MPC) within its Web3 wallet.
This innovative approach eliminates the need for users to remember complex seed phrases while maintaining robust security and self-custody. With MPC, the wallet owner divides a private key into three parts, known as key shares, and retains control over two of these key shares, providing an additional layer of security.
Binance’s entry into the DeFi market with its Web3 wallet marks a significant milestone in the evolution of the cryptocurrency industry. As DeFi continues to gain prominence, Binance’s move is poised to intensify the competition among major players and further shape the landscape of decentralized finance.