How to manage your wallet like a pro
Dear Bankless Nation,
Getting a crypto wallet is an important step on the bankless journey.
Keeping your crypto money on centralized exchanges like Gemini and Coinbase is fine to start…but it’s not bankless. Not your keys, not your crypto.
Taking custody of your crypto isn’t for everyone. With non-custodial wallets, you’re liable for holding and preserving your crypto wealth. If you lose access…it’s gone.
But for those ready to make the leap, this step unlocks a world of opportunity. With a crypto wallet, you get to directly interact with Ethereum and tap into its potential:
- Collect the next big NFT
- Earn DeFi yields that dwarf anything found in traditional finance
- Dive into the future of work by joining a DAO.
A non-custodial crypto wallet is your key to access these opportunities.
So how do you get started? What are the best wallets out there? And what’s the best way to track and manage your portfolio once you’ve got your wallet?
That’s our topic for today.
Let’s dive in.
How to manage your Ethereum wallets like a pro
An Ethereum wallet lets you access and manage an Ethereum account, serving as the gateway to bankless financial services with DeFi, the culture legos of NFTs, on-chain identity management for DAOs, and beyond.
As such, the way you set up your wallet(s) will shape your experiences around the crypto economy. This tactic will show you how to manage your Ethereum wallet flow like a pro using today’s top wallets, highlighting useful features, and other key considerations.
- Goal: Review how to skillfully manage your Ethereum wallets
- Skill: Easy
- Effort: 30 minutes
- ROI: Ideas for improving your wallet management practices!
Choosing the right wallet flow for you
As the silly old pun goes: a dumb empty wallet lacks cents. Yet today we’ll be exploring how to smarten up and bring sense to our Ethereum wallet management practices so we can surf Web3’s rising waves like pros.
Of course, there’s no singular “right way” to set up these management practices. You can use multiple wallets and services in combination, and in fact, many people do because of the added security and UX advantages such combos provide.
Moreover, Ethereum’s wallet ecosystem has never been more diverse than it is today, so crypto veterans and newcomers alike can feel lost when it comes to settling on the optimal wallet setup.
The name of the game is developing the flow that you prefer most and that works best for you. However, your foundational priority out of the gate should be safety (i.e. how to create the foundation of your wallet system as securely as possible)!
🚨 Safety first!
Since your wallet flow can rely on multiple wallets and services simultaneously, it’s important to make the core of your setup as secure as possible. Doing so will ensure your wider wallet system will be durable and accessible for years to come.
That said, the three main foundations to consider here include hardware wallets, multi-signature wallets, and social recovery wallets.
1) Hardware Wallets
Hardware wallets like the Ledger Nano X and the GridPlus Lattice1 are specialized devices offering “cold storage” for users to secure their crypto. These wallets keep your private keys underpinning your crypto offline at all times, ensuring that a hacker can’t easily sweep your funds from your computer or phone.
Hardware wallets can also be used in tandem with other wallet services, e.g. the MetaMask browser extension, for improved and streamlined UX when interacting with the Ethereum network.
Bankless Resources on hardware wallets:
2) Multi-Sig Wallets
Multi-signature or “Multi-sig” wallets are a more advanced, secure wallet as they require a minimum number of addresses to approve transactions, e.g. 2 of 3, 4 of 7, and so forth.
Such “multisig” systems are ideal for groups, whether they be businesses or DAOs, and individuals who want superior security since these special smart contract wallets require multiple sign-offs. Moreover, multisig solutions like Gnosis Safe make it easy for individuals to customize their wallet parameters daily spending limits.
Bonus security level up? Use a hardware wallet as one of your Gnosis Safe signing devices!
3) Social Recovery Wallets
By now you’ve probably heard a few painful stories about people who have lost access to old crypto wallets over the years.
Social recovery wallets, which Ethereum creator Vitalik Buterin is a big advocate for, are a practical answer to this accessibility problem.
These sorts of wallets would have a single signing key, which is what a user would use to send transactions and interact with dApps. However, underpinning this signing key are multiple “guardians,” meaning other Ethereum addresses. These could be maintained by family or friends, or even your other wallets. With social recovery, if enough of these guardians approve, a user’s signing key can be updated if they were to ever lose or forget how to access their original key.
To see this model in practice check out Argent, Ethereum’s leading social recovery wallet provider to date!
👩💻️ DeFi and NFT portfolio managers
Once you have the foundation of your wallet system set up, you can consider plugging your new wallet or wallets into a portfolio management dashboard. Just search for your address or connect your wallet and then these services offer simple one-stop hubs for visualizing and managing all your DeFi and NFT activities.
Some strong contenders here include:
- ⚡ Zapper — A portfolio management dashboard that lets you track multiple addresses simultaneously and trade and invest in top DeFi opportunities through an easy-to-use UI.
- 👛 Zerion — Similar to Zapper, Zerion is user-friendly and one-stop wallet management suite for easily staying on top of all your Web3 activities.
- 💎 NFTBank — NFTBank is a portfolio management dashboard that caters specifically to NFT users, from novices and power users!
🧠 Wallet Management Pro Tips
1. Use smart contract wallets for advanced actions
A basic Ethereum address is limited in what it can do. However, when you turn an Ethereum address into a smart contract itself, that address’s capabilities become considerably more advanced and varied.
Accordingly, two projects that make you spin up smart contract wallets to interact with them include Instadapp and DeFi Saver. Per this wallet model, these DeFi management protocols make it easy to perform advanced on-chain activities, e.g. merging two Maker Vaults in a matter of just a few clicks.
2. Browser & mobile wallets = good for dapps
Two of the easiest ways to interact with dapps are browser wallets and mobile wallets.
By browser wallet, I mean an extension you download for web browsers like Chrome, Firefox, and Brave that lets you perform wallet actions (even ones linked to a hardware wallet!) right in-browser. MetaMask is the most popular provider in this arena, but other notable projects include WalletConnect and the Coinbase Wallet extension.
Additionally, both MetaMask and Coinbase Wallet have mobile apps that smartphone and tablet users can download.
These apps come with “dapp browsers” that can be used to interact directly and on-the-go with popular DeFi and NFT projects like Compound and OpenSea. Other rising stars in Ethereum’s mobile app ecosystem currently include Dharma, Rainbow, and Argent (the previously mentioned social recovery wallet).
🖇️ The Big (On-Chain) Picture
Once you have your wallet flow how you like it, consider setting up an Ethereum Name Service (ENS) username for your main address to create your Ethereum profile and thereafter start developing your on-chain resume for the future.
Also, remember there’s no single “right way” to set up your wallet flow; maybe you prefer GridPlus over Ledger, Zerion over Zapper, or Rainbow over Argent.
That’s all perfectly fine: do what suits your tastes. The ultimate goal is to create your wallet flow as intentionally and securely as possible so that you can make the most of it over the long run!
- 🔍 Review your current wallet practices. Have any areas you’d like to improve? Use this tactic for ideas, then create a brief action plan and get to work in implementing your ideas at your own pace!