Web3 Wallet Security Practical Guide: Recently, well-known wallets have been frequently hacked. What should ordinary users do?

Written by: Yue Xiaoyu

If you want to survive long in the cryptocurrency industry, you must choose the right wallet and use the right wallet!

Wallets are the most important infrastructural products in our industry, and it’s not an overstatement to emphasize their importance.

Hackers often strike during bear markets. Previously, the longstanding Trust Wallet under Binance was hacked for 7 million USD, and recently, the well-known trading bot DeBot also reported a theft.

As ordinary users, what should we do?

As a product manager who has been working on wallets for many years, I want to share a few key principles:

1. When choosing a wallet, must prioritize top-tier platforms, and focus on whether there is compensation protection!

It’s not to say that wallets from small teams can’t be used, but leading platforms like Binance, OKX, Bitget, etc., mostly have dedicated security compensation funds.

Just like this time Trust Wallet was hacked, the official has clarified that they will fully compensate users using the SAFU fund.

However, small team wallets generally lack this safety net; if funds are lost, there’s a high chance there will be no compensation.

Honestly, developing wallets is inherently a tough and labor-intensive task, suitable for companies with resources and technical strength.

Of course, the returns are also quite substantial, as it directly controls the user traffic entry point.

2. The security of browser plugin wallets is really far inferior; never store large assets there!

The recent theft involved the plugin version because the private keys are stored locally in the browser, and plugins have strong permission interoperability, making them vulnerable to malicious code or phishing sites.

Attackers only need to trick users into visiting malicious websites to exploit architectural flaws in browser plugins and trigger vulnerabilities to steal assets;

Apps, on the other hand, require users to actively download malicious packages, making attacks more difficult.

Therefore, plugin wallets should only be used as small-amount interaction tools, with just enough gas fees for a few DApp interactions.

3. Try to avoid pseudo-decentralized wallets and trading tools that require private key custody!

This point directly relates to the DeBot theft incident.

As a well-known trading bot, the core issue with DeBot was that many users entrusted their private keys to the platform for supposedly automated and efficient trading.

This is very vulnerable to security attacks, leading to asset loss.

Remember, whether it’s a wallet or a trading bot, if it requires custody of your private key, the security level is extremely low.

It’s like handing your wallet keys directly to someone else, greatly increasing risk. Such tools should be used with caution.

Based on industry experience, I want to share the most core and safest protection scheme: a three-layer wallet system—cold, warm, and hot wallets.

This is currently a proven method to maximize asset security, and many institutions adopt this configuration.

First layer: Cold wallet, used as a large asset storage.

It’s recommended to keep over 90% of core assets here, preferably in top-tier hardware cold wallets like Ledger or Trezor.

Its main advantage is physical isolation; private keys are never connected to the internet, making it impossible for hackers to steal them online.

A reminder: when backing up seed phrases, always use durable, anti-drop, anti-loss media like metal plates, store them in separate secure locations, and never keep them on your phone or store photos in the cloud!

Second layer: Warm wallet, used for medium-value staking.

Create a dedicated wallet solely for staking and low-frequency operations like locking assets.

The key point is, this wallet must not import any third-party platforms, nor click unknown DApp links. Keep it low-activity to reduce risk exposure.

After all, staking funds usually have long cycles, and safety should come first.

Third layer: Hot wallet, used for small-amount interactions.

Like our commonly used mobile wallets and the browser plugin wallets mentioned earlier.

Only store a small amount of gas fees here, for daily DApp browsing and small transfers.

Even if this wallet is hacked, the amount is small, so it won’t affect our core assets. It’s like exchanging small money for security.

Finally,

In the Web3 industry, asset security comes first; otherwise, you’re just making a wedding dress for hackers.

Choose top-tier wallets with compensation guarantees, treat plugin wallets as small-amount tools, avoid tools that require private key custody, and implement the cold-warm-hot three-layer system for asset isolation. Only then can you minimize pitfalls.

If anyone has additional security tips, welcome to share!