Leading crypto exchange, Binance, has unveiled its latest product, a Web3 wallet, set to be accessible to all users through the Binance mobile app.
#Binance is now your one app for all things Web3.
Our new Web3 Wallet lets you connect DeFi to CeFi in one click.
Try it and let us know what you think.
— CZ 🔶 Binance (@cz_binance) November 8, 2023
According to Binance, this Web3 wallet represents more than just storing digital assets – it is an integral part of the Web3 framework empowering individuals with the ability for self-sovereign finance.
Binance’s Web3 wallet is integrated within the primary Binance app which is primarily utilized for cryptocurrency trading. This wallet employs multiparty computation (MPC) technology, which divides a user’s private keys into three smaller components referred to as key shares.
“Having the key shares split across three different locations mitigates the risk of the keys being compromised and reduces the vulnerability of the system,” CEO, Changepeng Zhao, said at the Binance Blockchain Week conference in Istanbul.
Out of the three key shares, the user retains control over two, thus enabling self-custody. According to company officials, the wallet lowers the barriers of entry for users to achieve full self-custody of their assets, and it is an important, convenient bridge towards DeFi empowerment.
“Ultimately, our priority is to ensure users can explore Web3 with us within a user-friendly and protected environment.”
As stated by Richard Teng, the head of regional markets at Binance, the use of MPC technology helps alleviate concerns about losing one’s seed phrase, enhancing the security and ease of wallet management.
“We want our users to be assured that they are interacting with Web3 within a secure and protected ecosystem. That is why we have incorporated MPC technology as well as Binance’s trusted security infrastructure within the Web3 Wallet,” he added.
The three key shares will be distributed in the following manner:
- The first part will be held by Binance
- The second part will be stored locally on the user’s mobile device, and
- The third part will be encrypted using the user’s recovery password and saved in their personal cloud storage, such as iCloud or Google Drive
This distribution of key shares adds an extra layer of security and control for the user.
Binance’s move to expand into other cryptocurrency services comes as its spot trading business faces challenges in retaining investors. According to a report by the blockchain analytics firm 0xScope, Binance’s market share in the spot trading sector dropped to 40% in 2023.
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