#Web3 wallets are a type of cryptocurrency wallet based on blockchain technology that allows users to store, send, receive, and convert different cryptocurrencies.
Unlike traditional banks or centralized exchanges, users of Web3 wallets have complete control over their private keys and funds. It is a self-custodial decentralized application (DApp) virtual currency wallet, allowing users to manage their virtual currency assets safely and freely.
The core functions of Web3 wallets include:
1. Private Key Management: Web3 wallets generate and store users' private keys, which are crucial credentials for accessing cryptocurrency assets. Private keys must be kept secret, known only to the user, to ensure the security of the assets.
2. Asset Interaction: Web3 wallets allow users to store, send, and receive cryptocurrencies, interact with DApps, participate in decentralized finance (DeFi) projects, and perform other blockchain-related operations.
3. Identity Management: Web3 wallets can create on-chain identities, allowing users to establish their digital identities on the blockchain and interact securely for identity verification with other users.
It can be simply understood that various applications built on the blockchain fall under the Web3.0 domain, where all on-chain activities require cryptocurrency transactions or payments, leading to the emergence of Web3 wallets.
As players in the crypto space increasingly value DeFi and autonomy, many people buy coins on exchanges and then transfer them back to their own cryptocurrency wallets. To maintain traffic and stickiness, major exchanges have launched their own wallets and chains.