In a significant move into the decentralized finance (DeFi) space, cryptocurrency exchange Binance has introduced a Web3 wallet designed to interact with the growing DeFi ecosystem. The announcement was made during the Binance Blockchain Week conference in Istanbul.
Competing Across 30 Blockchain Networks
The newly unveiled Web3 wallet is set to operate seamlessly across 30 blockchain networks, providing users with a versatile tool to engage with decentralized financial services. Binance CEO Changpeng ‘CZ’ Zhao highlighted the broader significance of Web3 wallets, emphasizing their role in the Web3 framework and the empowerment of individuals in the realm of self-sovereign finance.
Competition with Established Players
Binance’s entry into the Web3 wallet arena positions it in direct competition with established players like MetaMask and Trust Wallet. Notably, Binance acquired Trust Wallet in 2018, and its new Web3 wallet will now vie for market share alongside its acquired counterpart. The announcement also coincided with the listing of a futures market for TrustWallet’s native token (TWT), resulting in a 7% drop in the token’s price within 24 hours.
Utilizing Trust Wallet’s WaaS Technology
The Web3 wallet leverages Trust Wallet’s Wallet as a Service (WaaS) technology, which was also introduced concurrently. WaaS aims to streamline the development process for companies venturing into Web3 wallets, offering services such as asset management and cross-chain transfers.
Competition Among Centralized Exchanges
Binance is not alone in entering the Web3 wallet space among centralized exchanges. Rivals like Coinbase and OKX have also ventured into this domain, reflecting the broader industry trend toward decentralized financial services.
User-Friendly DeFi Activities Through Binance’s Mobile App
Users can create their Web3 wallet via Binance’s mobile app, which will also serve as the hub for various DeFi activities, including staking, lending, and borrowing. The specifics regarding whether users will undergo a know-your-customer (KYC) procedure to create a wallet remain unclear.
Security Measures with Multi-Party Computation (MPC)
Recognizing the vulnerability of Web3 wallets to hacking attempts, Binance aims to enhance security through multi-party computation (MPC). This approach eliminates the need for users to memorize seed phrases while maintaining the benefits of security and self-custody. MPC involves breaking a private key into three parts called key shares, with the wallet owner controlling two of the three key shares.
“Ultimately, our priority is to ensure users can explore Web3 with us within a user-friendly and protected environment,” emphasized CZ, underlining Binance’s commitment to providing a secure and accessible experience for users delving into the world of Web3.
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