What is a crypto wallet

Learn about cryptocurrency wallets, focusing on non-custodial wallets for STON.fi DEX. Discover how to store, send, and receive crypto securely with private keys and seed phrases.

A cryptocurrency wallet is a service, application, or device where you can store cryptocurrency, send, and receive digital assets (cryptocurrency). There are even paper cryptocurrency wallets — write down private keys or a mnemonic (seed) phrase of 12 or 24 words on a piece of paper — and that will be your paper wallet! The main thing is not to lose it and not to show it to anyone: whoever owns the keys or the mnemonic phrase, owns the wallet and can manage all the assets on it.

Wallets come in different types, but in the context of discussing DEX, we are interested in these two:

• Custodial. Wallet keys are stored by a third-party company. To create such a wallet, you usually need to go through the KYC (Know Your Customer) procedure — confirm your passport details. In fact, your custodial wallet is not yours but belongs to the service where you created it. An example of a custodial wallet is your wallet on a centralized exchange. Whether it's good or bad — you decide, but on DEX, you can only work with non-custodial wallets.

• Non-custodial. They are also known as self-custodial. Here, you maintain complete anonymity and manage the wallet yourself. The keys to your wallet are generated from a seed phrase that only you know. Such a phrase looks like 12 or 24 random words written in a specific order.

For operations on a decentralized platform, such as STON.fi DEX, you will need a non-custodial wallet. It's extremely easy to create.