How to Develop a DeFi Wallet

Despite concerns about DeFi in its early days, it seems that decentralized finance has firmly taken its place in the market. Users have started to appreciate the many benefits of DeFi such as transparency, autonomy, availability, and elimination of third parties. The main bridge between DeFi platforms and users is DeFi wallets, which provide a completely new and improved user experience for their owners. In this article, we will explain how to develop a DeFi wallet.

The difference between custodial and non-custodial wallets

First of all, let’s start by defining a DeFi wallet to understand how it works and how it differs from a regular crypto wallet.

A DeFi wallet is a non-custodial wallet which means you get full control over your crypto private keys. This ensures that you are 100% responsible for managing your own funds. Unlike the centralized wallets offered by exchanges like Coinbase and Binance, which store your funds on exchange accounts, with DeFi wallets, the users are the sole owners of their assets. Also, in order to store and manage funds with a DeFi wallet, you don’t need to provide information about yourself and go through checks and verifications. Even when participating in DeFi projects, platforms will interact only with the wallet and its public address without disclosing personal data.

As you can see, non-custodial wallets are more secure and give users more freedom to store and manage their funds. However, along with this comes additional responsibility. If the user loses the keys to their crypto wallet, the funds cannot be recovered. Also, custodial wallets are often more user-friendly than decentralized ones, so you should pay extra attention to creating a high-quality and user-friendly interface when developing a DeFi wallet.

Key features of DeFi wallets

When creating a DeFi wallet, the first thing you need to do is to draw up a list of the features you want to implement in your product. As you can guess, whether it will be popular among users directly depends on the functionality and convenience of your application. Start with the basic features your wallet should have.

• Fast and easy sign-up. Remember, one of the main benefits of DeFi is privacy. Let your users quickly get started with the wallet by setting a username and choosing their security settings like a passcode or biometric security.
• Balance check. This is a basic feature for any digital wallet. One of the best practices is to display balances on the start screen so that users can always see them.
• Send/receive crypto. Your app should provide both convenient transfer and receipt of crypto funds. For example, Coinbase Wallet allows you to send cryptocurrency in several ways: by scanning a QR code, entering a long-form address or using a Coinbase Wallet’s username.
• Money withdrawal. Withdrawals are also a must-have feature for any crypto wallet. Make sure users won’t face difficulties with withdrawals. Also, don’t forget to add a help button so that users can quickly contact you if something goes wrong.
• Transaction history. Transaction history helps users analyze their activity. Make sure to add some filters so that users can track their expenses and income in the best way (by time, type of transaction, asset type, etc.).
• Notifications. Push notifications can be really useful if you make sure they don’t become annoying. Allow users to independently choose which notifications they want to receive. For example, messages about crediting funds, updates, news, etc.

This is not a complete list of features that users of your DeFi wallet can benefit from. The more personalized and unique the experience is that you provide, the more likely your app will stand out from the competition and come out on top. For example, you can create a chatbot that will help users quickly resolve their requests. Another idea is to provide a lending option so users can start earning interest without leaving their wallets. The best option is to research the needs of your target audience to see how you can meet them.

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