Binance, a cryptocurrency exchange, launched a Web3 wallet that can interface with the DeFi ecosystem.
The new product was announced during the Binance Blockchain Week conference in Istanbul, and it would work across 30 blockchain networks.
"Web3 wallets are an essential part of the Web3 framework, enabling people to manage their finances independently," stated Changpeng Zhao, the CEO and founder of Binance. "They represent more than just storing digital assets."
Binance's Web3 wallet will compete with MetaMask and Trust Wallet, both of which Binance acquired in 2018. Earlier this week, Binance added a futures market for TrustWallet's native token (TWT).
Other centralized exchanges with Web3 wallets include Coinbase and OKX.
Users can build a wallet using Binance's mobile app, which will also serve as a platform for DeFi operations such as staking, lending, and borrowing. It is presently unknown whether users will be required to go through a know-your-customer (KYC) procedure in order to create a wallet.
Web3 wallets are popular targets for hackers and exploiters because once a hacker obtains a private key, all funds can be irrevocably drained.
Binance intends to change this using multi-party computation (MPC), which eliminates the requirement for users to learn seed phrases while maintaining the benefits of security and self-custody. MPC includes dividing a private key into three parts called key shares, with the wallet owner controlling two of the three key shares.
"Ultimately, our primary objective is to make sure users can explore Web3 with us within a user-friendly and secure environment," he added.
Binance's entry into the self-custody Web3 wallet space marks a significant milestone for the crypto industry. By giving users greater control and security over their digital assets, the exchange is supporting the principles of decentralization and empowerment that are at the core of blockchain technology. This move is expected to catalyze further innovation and competition within the crypto wallet space, benefitting users and advancing the industry as a whole.