Security is paramount in any financial institution, even in the cryptocurrency landscape with its revered technologies. Those who hold or transact these assets often have security as a major concern. Centralized cryptocurrency exchanges and custodial wallets present a significant risk of hacks and vulnerabilities, leading to the loss of crypto assets. This fear of losing assets to hacks and vulnerabilities has pushed many away from the cryptocurrency market and uncertainty. To address this challenge, decentralized finance (DeFi) solutions have emerged, leveraging blockchain and smart contract technologies to eliminate the need for intermediaries and enable trustless transactions. This is achieved through the implementation of robust security measures, which require constant verification and eliminate the need for blind trust. Zero Trust DeFi wallets are therefore a new type of wallet that provides a secure and decentralized way to store cryptocurrencies. They have become a popular choice for users looking for a secure and reliable way to store, manage, and transact cryptocurrencies without relying on centralized third-party entities. Establishing Confidence with a Zero Trust DeFi Wallet A crypto wallet serves multiple functions, such as enabling crypto transactions, aggregating liquidity across various decentralized exchanges (DEXes) and blockchains, optimizing trading fees, enhancing transaction speeds, and integrating with numerous DeFi protocols. However, the fundamental purpose of a crypto wallet is to securely store the private keys that users need to access and manage their crypto assets. In essence, a crypto wallet does not hold cryptocurrency but rather the private keys required to interact with the blockchain for specific digital assets. There are two types of wallets: custodial wallets and non-custodial wallets. Custodial wallets involve a third-party company or service provider storing users' private keys on their behalf. In contrast, non-custodial wallets follow a zero-trust security model, where users have complete control over their assets and are solely responsible for ensuring the security of their private keys. Non-custodial wallets offer users enhanced security and peace of mind. These wallets capitalize on the decentralized nature of blockchain technology, using smart contracts to eliminate the need for third-party intermediaries and grant users full control over their assets. Zero Trust DeFi wallets mitigate the risk of loss from hacking commonly associated with centralized exchanges and custodial wallets, providing a safer alternative for users. By adopting Zero Trust DeFi wallets, cryptocurrency holders can securely store their assets on the blockchain without relying on a centralized intermediary that could potentially compromise the system. Making Zero Trust DeFi Wallets More Personalized and Personified There are over 200 DeFi Wallets in the cryptocurrency ecosystem, with many of them being desktop-based. Although some can be used on mobile phones as mobile apps, their full features can typically only be accessed on desktop computers. To make DeFi Wallets more personalized, and user-friendly, and enhance their security posture, it is important to make them mobile-friendly. Creating a mobile-friendly DeFi Wallet app enables it to provide users with a higher level of security, although these features are not exclusive to mobile wallets. Such features can include multi-factor authentication (MFA), biometric verification, and hardware wallet integration. These security measures help reassure users that their funds are safe and secure, fostering user confidence. While a mobile-based DeFi wallet app may offer certain advantages in terms of the safety and privacy of user funds, it is crucial to acknowledge that both desktop-based and mobile wallets can be vulnerable to different types of security risks. However, by continually improving security features and making them more user-friendly, we can pave the way for increased adoption of DeFi wallets across various platforms. The Future of Secure DeFi Wallet Mobile Applications The development of secure DeFi wallet mobile applications is essential in today's rapidly evolving cryptocurrency landscape. As cryptocurrency and blockchain vendors innovate and implement next-generation technology, users increasingly demand cutting-edge security features to ensure the safety of their transactions. By providing secure, tamper-proof, and transparent transactions, DeFi wallet mobile applications can deliver peace of mind to users. Kirill Suslov, CEO of TabTrader, is at the forefront of this movement. After experiencing a bank run in 2012, Kirill and his team set out to create an investment tool that empowers individuals to achieve financial independence. On April 13, 2023, TabTrader launched a free non-custodial DeFi wallet mobile application. Designed specifically for Android and iOS, this mobile wallet eliminates the risks often associated with browser extensions. Browsers can be vulnerable to remote hacks, and managing sensitive information like private keys through browser extensions can be insecure. Kirill explains how desktop-based wallets can be manipulated: "It is a known issue that many browser extensions – including those installed alongside your wallet – can be compromised or sold to malicious actors who then use them to gain access to your browser. Browser extensions have the ability to access and modify all of the data that is entered into your browser, including your passwords. If a malicious extension gains access to this data, it could be used for nefarious purposes. TabTrader offers an app developed specifically for Android and iOS, which is inherently more secure due to the architecture of mobile platforms and the way apps interact with the system and each other." Kirill believes that with this, addresses the concerns around trust, safety, and security that have arisen in the wake of the US banking crisis and the collapse of FTX. TabTrader DeFi wallet Regulatory Compliance Before the emergence of DeFi, wallets were predominantly custodial or browser-based. Although these wallets can store users' sensitive information and credentials, not all of them risk non-compliance with regulations and directives. However, some may face challenges in adhering to certain regulations. For instance, regulations like UK GDPR prohibit data storing firms from storing users' data in any data centers outside the UK. In contrast, TabTrader is not a custodian of users' funds and keys and does not act as a counterparty to any transactions. As a result, it can scale globally while remaining compliant with local regulations. The TabTrader Wallet is a versatile wallet that empowers users to maintain custody of their own funds at all times, including when trading on decentralized exchanges (DEXes). This feature eliminates the need to relinquish control of assets to a third party, ensuring users' full control and security. Moving Forward… While Zero Trust DeFi wallets are still relatively new, they are rapidly gaining popularity in the cryptocurrency market. These wallets are an important step forward in enhancing the security and reliability of the market, ultimately leading to increased adoption and usage of cryptocurrencies. However, it is important to note that, as with any technology, there are potential risks and limitations that need to be considered. Proper research, due diligence, and risk management practices should be followed when considering the use of Zero Trust DeFi wallets. Zero Trust DeFi wallets can enhance the cryptocurrency market by providing users with full control over their crypto and their keys. This can help increase security and reduce loss by reducing the risk of hacks and theft. It can also help increase the adoption of decentralized finance applications by providing a secure and decentralized way to store cryptocurrency.

The is an opinion piece based on the author’s POV and does not necessarily reflect the views of HackerNoon.

Enhancing the Cryptocurrency Market with Zero Trust DeFi Wallets

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