Friends who often participate in airdrops will definitely face the issue of managing multiple wallets.
Today in March, while interacting with the Monad ecosystem, I accidentally fell for a phishing site that leaked my mnemonic phrase. Due to my previous reluctance to deal with asset isolation, I lost 0.012 BTC and 0.07 ETH, which was worth over 1000 USD at the time.
This painful lesson has made me pay attention to wallet management. Today, I would like to share my wallet management methods with everyone. (Since my asset scale has not reached the level that requires a cold wallet, I will not mention cold wallets here.)
Based on the importance of the wallet, asset scale, and usage range, I divided the wallets into three levels:
1. Airdrop task wallet
Importance: Low
Purpose: Participate in airdrop tasks, use and discard as needed.
Funds: A small amount, generally less than 50 USD (for example, many web airdrop tasks require at least 0.01 ETH)
Mnemonic Phrase: Management is very casual, copy and paste, send over the internet.
Usage: Import wallet app, import web wallet plugin, link and authorize dApp applications.
2. Master wallet
Importance: Medium
Purpose: Manage daily cash flow, high frequency of use.
Funds: Commonly used liquid funds, such as funds for lending and new investments.
Mnemonic Phrase: Write it down on paper after generation, never appeared online.
Usage: Located in the generated wallet app, must not be used for web wallet plugins, must not participate in any airdrop tasks. Only link and authorize a small number of trusted dApp applications.
3. Personal asset wallet
Importance: High
Purpose: Manage long-term assets, such as BTC that I regularly invest in, low frequency of use.
Funds: Main personal assets, such as my future small goals 😎.
Mnemonic Phrase: Memorize it when generated (or write it down on paper and keep it safe), never appeared online.
Usage: Located in the generated wallet app, it must not be used for any dApp link and authorization, only for transfers (in most cases, it is transferring to my own master wallet).
By isolating assets based on the above three levels of wallets, we can minimize losses in case of accidental situations.
Here I want to mention Binance's MPC non-custodial wallet. I used to think it was incredibly difficult to use. After experiencing phishing losses, I found it to be slightly more secure than regular Web wallets because it does not have private keys, so there is no risk of all on-chain assets being stolen after the mnemonic phrase leaks. For example, if I get scammed on the ETH chain, it won't affect the assets on the BSC chain.
In addition, when multiple addresses are needed, we do not need to create multiple sets of mnemonic phrases; we can use the HD wallet function. These generated addresses appear to outsiders as independent addresses, but only you know they all belong to the same wallet.
I manage my Binance accounts in the same way. My main account only interacts with the number one address of the master wallet, while my secondary account only interacts with the number two address of the master wallet. When I need to transfer assets between different Binance accounts, I first recharge and withdraw separately, and then transfer between the number one and number two addresses on-chain to avoid direct fund transfers between accounts.
In summary, wallet asset isolation is still a relatively important aspect, especially as your asset scale continues to grow. Although the loss of assets this time is painful, it has allowed me to summarize some experiences that may help me avoid greater losses in the future. A blessing in disguise!
