Binance Introduces a Web3 Wallet to Empower Its Users
By Lidia Yadlos
Binance, one of the world's largest cryptocurrency exchanges, has unveiled its first-ever Web3 wallet, marking a significant move into the decentralized finance (DeFi) space. The announcement was made at the Binance Blockchain Week conference held in Istanbul.
Binance's new Web3 wallet is designed to work across 30 different blockchain networks, providing users with the ability to interact with the DeFi ecosystem. This move puts Binance in direct competition with established DeFi wallet providers like MetaMask and Trust Wallet, the latter of which was acquired by Binance in 2018.
"Binance’s Web3 Wallet lowers the barriers of entry for users to achieve full self-custody of their assets, and it is an important, convenient bridge towards DeFi empowerment."
Changpeng 'CZ' Zhao, CEO of Binance
"Ultimately, our priority is to ensure users can explore Web3 with us within a user-friendly and protected environment," said Changpeng 'CZ' Zhao, CEO of Binance. Web3 wallets are crucial components of the Web3 framework, enabling individuals to have greater control over their digital assets and engage in self-sovereign finance.
MPC technology eliminates the need for users to memorize seed phrases while maintaining the benefits of security and self-custody. "We want our users to be assured that they are interacting with Web3 within a secure and protected ecosystem. That is why we have incorporated MPC technology as well as Binance’s trusted security infrastructure within the Web3 Wallet," explained Richard Teng, head of regional markets at Binance.
Users can create their Web3 wallet through the Binance mobile app, which will also serve as a platform for various DeFi activities such as staking, lending, and borrowing.
However, it's currently unclear whether users will need to complete a know-your-customer (KYC) procedure to create a wallet.
"The three shares of the keys will be held in three places — the first part will be with Binance, the second part will get stored locally on the user's mobile phone and the third part will get encrypted by the user's recovery password and backed up to their personal cloud storage such as iCloud or Google Drive," clarified a Binance spokesperson regarding the security measures.
The introduction of the Web3 wallet comes at a time when Binance's spot trading business faces challenges in retaining investors. A report from blockchain analytics firm 0xScope indicated a decline in Binance's spot trading market share to 40% in 2023. In contrast, South Korean crypto exchange Upbit witnessed a significant increase in its spot market share during the same period, rising from 5% to 15.3%.
Binance's move into the Web3 wallet space signals its commitment to expanding its offerings and remaining competitive in the ever-evolving cryptocurrency industry.
Published on Binance