The world’s largest exchange platform launches a self-hosted wallet. Binance has just confirmed the arrival of its “Web3 Wallet”, which aims to be a bridge between centralized and decentralized services. What does it look like, and what does it say about the company’s strategy?
Binance launches its Web3 Wallet: a self-hosted wallet
The news was shared at Binance Blockchain Week, taking place this week in Istanbul, Turkey. Web3 Wallet is based on a technology that’s all the rage at the moment: multi-party computation (MPC). It enables a user’s private keys to be separated into several segments, so that they can be stored in different locations. This greatly reduces the vulnerability of a portfolio.
Meet the brand new Binance Web3 Wallet!
Simple, convenient and secure.
– Binance (@binance) November 8, 2023
Binance’s wallet is also self-hosted: this means that the company has no control over it, unlike traditional wallets on centralized exchange platforms:
“The funds stored in the wallet are exclusively held by the user and accessible only by him or her. “
According to Binance CEO Changpeng Zhao, Web3 Wallet will enable more fluidity especially between decentralized finance (DeFi) and centralized finance (CeFi), leading to more adoption:
“To help Web3 adoption, we need to identify and bridge the gaps between centralized and decentralized systems. Binance’s Web3 Wallet lowers the barriers so users can have full control over their assets. “
An answer to FTX and the mistrust of centralized platforms?
The press release doesn’t say so, but the move is also part of a rather distrustful context towards centralized platforms. Since the fall of FTX, many players in the ecosystem have called on users to withdraw their funds from exchanges, arguing that they would not be accessible in the event of a problem. The trend is also global: cryptocurrencies stored on centralized exchange platforms had reached a particularly low threshold this year.
Binance’s Web3 Wallet is certainly a response to this. It enables users to make use of Binance’s services, while guaranteeing themselves an exit route if necessary. It’s a major symbolic step for the platform, and one it seems to need. The company seems to have lost momentum in recent months: it has withdrawn from several territories, and its active users are now almost as numerous as those of its competitor OKX.