DeFi Wallets and Self-Custody: How to be 100% in Control
In DeFi, your money becomes empowered. You can store it, lend it, trade it, zap it, and track it real-time. It’s a bit like a game but at the heart of this is more control, aka, self-custody. Self-custody refers to individuals being 100% in control of their assets, similar to cash. Except this is digital …
In DeFi, your money becomes empowered. You can store it, lend it, trade it, zap it, and track it real-time. It’s a bit like a game but at the heart of this is more control, aka, self-custody.
Self-custody refers to individuals being 100% in control of their assets, similar to cash. Except this is digital cash and it’s not dependent on a bank or other entity to issue it or verify transactions. This is precisely why blockchain was such a huge innovation starting with Bitcoin and then Ethereum.
Here’s what you need to know:
DeFi requires an Ethereum wallet like MetaMask, Argent, Dharma, Monolith and more. The point is for users to have a private key (somewhat like the password to your email) and a public wallet address (like your email address). While you can share your public address you never share the private key.
Second, being in control of your assets means no one can save you. There’s no customer support like you would find at a centralized crypto exchange, just like there’s no customer support to call when you lose cash on the street. When you own digital cash, the only thing you can do is write down your private key and your wallet seed phrase to backup in a safe place in case you ever lose your device with your wallet, like your laptop or phone.
Lastly, you can now do anything with your digital money DeFi applications will allow you to! There’s a wide range of applications spanning trading, lending, borrowing, liquidity providing, options trading, derivatives, and yield farming.
The key takeaway about self-custody is as simple as Andreas Antonopoulos said: “not your keys, not your coins”. With DeFi, we now have applications that let your money work for you. The way to take advantage of that is owning your private keys and giving permission to these new automated money robots called DeFi apps to put your money to work. That’s precisely why we believe DeFi can democratize access to strategies that can grow anyone’s wealth, regardless of who you are, where you live, or how much money you have.
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