Web3 can be overwhelming.
That’s why we have created this guide.
It’ll make it easier for you to grasp all things NFTs and decentralised finance (DeFi).
But before we can start, you need something called a “wallet”.
In this guide we’ll explain what wallets are and help you choose the best Solana wallet for NFTs and DeFi.
What Is A Wallet?
For all things in Web3 you need a wallet.
Essentially, a wallet allows you to interact with a blockchain and manage your digital assets in a safe and secure manner.
It's important to understand the difference between custodial and non-custodial wallets though.
- Custodial wallet: When you buy, sell and trade with digital assets on a centralised exchange (CEXs) such as Binance, Coinbase or Kraken, you do so through a custodial wallet. The problem with custodial wallets is that they're in the custody of the CEX. This means that the CEX can — for example — freeze all your assets at any time if they feel the need to do so.
- Non-custodial wallet: If you don't want to be exposed to the risks of a custodial wallet, you can use a non-custodial wallet. At their core, non-custodial wallets are either browser extensions / mobile apps or hardware devices. Wallets that come in the form of browser extensions / mobile apps (e.g. Phantom and Glow) are referred to as “hot wallets”, as they are always connected to the Internet and accessible online. Wallets that come in the form of hardware devices (e.g. Ledger and Trezor) are referred to as “cold wallets” because they only interact with the Internet when you actively connect them.
Always be cautious when using wallets — scammers and hackers are flourishing in Web3.
In order not to fall prey to their schemes, let's look at some operations security (OpSec) best practices when dealing with wallets:
- Seed phrase: When you first set up a wallet, a series of 12 (or more) random words will be generated. This series of words is known as the “seed phrase.” It gives anyone access to your digital assets in your wallet — no password required! But it also helps you to access your wallet if you were to lose the device you initially installed it on. NEVER share your seed phrase with anyone, no matter what!
- Wallet setup: When you create a hot wallet, connect and link it to your cold wallet (e.g. Ledger and Trezor) BEFORE you do anything else. By doing so, you can be sure that the connection between your hot and cold wallets is safe and has not been tampered with.
- Asset management: When you buy digital assets which you'd like to keep for a longer time, you should transfer them from your hot to your cold wallet. By doing so, you disconnect your digital assets from the Internet. Now, if your hot wallet is hacked and the perpetrators want to “drain” it i.e. steal your digital asset, they can’t.
- Wallet operations: Always create multiple hot wallets for multiple use cases: trading, minting NFTs and when using / testing new platforms and apps, especially when they are still in alpha / on devnet.
The Best Solana Wallets
As previously mentioned, a wallet allows you to interact with dApps — decentralised applications i.e. apps that run on a blockchain — and manage your digital assets in a safe and secure manner.
If you want to dive into the world of Solana, there are multiple wallet options to choose from.
In this guide, we’re going to look at the pros and cons of the most popular ones: Phantom and Glow.
- Phantom is the most proven, trusted and popular wallet for the Solana blockchain.
- The wallet supports most browsers, ranging from Chrome, Brave, Firefox to Edge.
- Also, Phantom can integrate with cold wallets such as Ledger, which is important (see “OpSec best practices” above).
- Phantom is limited to the Solana blockchain and ecosystem i.e. you can’t interact with dApps from other blockchains such as Ethereum, Avalanche or NEAR.
- Glow is the fastest and most user-friendly Solana wallet.
- The wallet also comes with an explorer that allows you to directly purchase cryptocurrencies and NFTs on the Solana blockchain.
1. Glow allows you to access its browser extension with touch ID and the mobile app with face ID.
2. Before you approve a transaction in Glow, a thorough security simulation is conducted.
3. The wallet also allows you to burn spam tokens (cryptocurrencies and NFTs) to redeem small amounts of SOL.
- The browser extension is currently still in BETA.
- The Backpack team has deep domain expertise, as the developers also created Anchor — a framework for building secure Solana programmes quickly.
- Backpack offers in-wallet messaging, making it easier to share data, information, and digital assets such as tokens and NFTs.
- Also, Backpack is able to host xNFTs — basically applications — that allow for rich and immersive token-gated experiences such as in-wallet games and in-wallet videos.
- Backpack is the newest wallet on Solana and only recently came into public beta. And as is the case with most new software, Backpack currently experiences more bugs than more established wallets.
We hope our guide helped you in understanding what wallets are and how Phantom and Glow differ from each other.
Remember, non-custodial wallets such as Phantom and Glow are software.
As is the case with software, it might be prone to bugs and hacks, as was the case with Slope recently.
More information about the Slope hack here.
The good thing: Using a Ledger or Trezor will keep your digital assets safe in most cases.
Disclaimer: This guide is strictly for educational purposes only and doesn’t constitute financial or legal advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
Join The Drift Family
We’re excited to keep creating value for Drift users and can’t wait for you to join our community! 🙇🏽🙇🏻