Types of Crypto Wallets for Security Tokens

Crypto wallets are digital storage solutions for storing, sending, and receiving cryptocurrencies and tokens. They interact with blockchain networks and manage these assets. For security tokens, wallets are essential in safeguarding digital assets.

All the examples in the article, such as MetaMask and Fireblocks, are hot wallets that are always connected to the internet, allowing you to send and receive tokens. However, their constant connection makes them more vulnerable to hacks and theft, so it's crucial to implement necessary security measures.

Key concepts

 

Custodial vs Non-custodial Wallets

 

Crypto wallets fall into two categories: Custodial and Non-Custodial Wallets.

Custodial Wallets: Here, the management of private keys is entrusted to a third party, providing users with convenience but limiting their control over their assets. This category is often favored by newcomers and individuals seeking a hassle-free approach to crypto management, relying on exchanges or centralized wallet providers for a set-and-forget experience.

Non-Custodial Wallets: Exemplified by MetaMask, non-custodial wallets empower users with complete control over their assets by directly providing them with their private keys. These wallets cater to users who prioritize autonomy and desire a higher level of control over access to their funds. They offer a more hands-on and self-directed approach to managing cryptocurrencies.

Web3 wallet as APIs

 

Web3 wallets as APIs (Application Programming Interfaces) are emerging as powerful tools for seamless integration with the decentralized web. By exposing a set of functions and protocols through APIs, these wallets empower developers to build user-friendly applications that leverage blockchain capabilities.

Our integrated wallet solution prioritizes security for less technically inclined investors. It ensures advanced security by distributing key generation among independent signers, safeguarding token investments without relying on users for key security, unlike non-custodial solutions.

 

Note: We do not offer integrated custodial wallets due to regulatory requirements, high costs, and significant jurisdictional limitations.

Multi-Signature Wallets

 

Multi-signature, often referred to as multi-sig, involves requiring multiple private keys to authorize a transaction, adding an extra layer of security. Unlike traditional wallets that rely on a single private key for access and control, multi-signature wallets distribute this authority among several keys, typically requiring a predefined number of signatures to validate a transaction.

Safe{Wallet} — Secure Smart Account Management on Ethereum | Safe is a secure multi-signature wallet offering top-notch security and multi-signature access. It enables self-custody, co-management of assets, and features like transaction batching and simulation. Its robust security and flexibility make it ideal for token deployment.

Choosing a Wallet

 

Choosing the right wallet depends on your needs and how you plan to use your tokens. Consider factors like the types of digital assets to be supported, ease of use, accessibility, and additional features. In this section, we share our recommendations for issuers, owners & agents, and investors.

 

Note: Visit the Guide of Roles and Permissions of users for more detailed information about the difference between issuers, owners, agents and investors.

 

Important: With the ERC-3643 protocol, the Owner possesses a MASTERKEY to control all security tokens, enhancing the level of security and control over assets. In contrast to cryptocurrencies, even in the event of an investor losing their private keys, tokens can be recovered. For more information, visit the official ERC3643 site.

Issuer Wallets

 

Issuers can only deploy tokens using the TREX Factory platform. This user-friendly solution streamlines the issuance of ERC-3643 tokens, eliminating the need for manual interaction with the blockchain.

What do issuers want?

To deploy a token.

Recommended wallets providers for issuers: 

 

Safe Multisig to manage multisig signatures (free).

Fireblocks wallets for an institutional grade governance solutions (price available on request).

 

Recommended wallets for Agents:

 

Owner & Agent Wallets

 

In the context of permissioned tokens, owner and agent wallets are used to sign smart contract actions rather than store tokens. These actions involve token management such as qualifying investors, minting and burning tokens, freezing and unfreezing tokens, forcing transfers, and adding or revoking agents.

What do owners and agents want?

 

To trigger and sign token operations.

Eventually, to sign in a transparent way to allow automation.