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noun
A custodial wallet is a cryptocurrency wallet managed by a third party—such as an exchange or financial service—that holds and secures the private keys on behalf of the user. While custodial wallets offer ease of use, especially for beginners, they require users to trust the provider with their funds and access. This contrasts with self-custody, where the user controls their own keys and assets directly.
Hot Wallet Comparison
| Wallet Type | Internet Access | Security Level | Ease of Use | Best For |
|---|---|---|---|---|
| Browser Wallet | Online | Moderate | High | dApps, DeFi, NFT interactions |
| Mobile Wallet | Online | Moderate | Very High | Everyday use, QR payments, portability |
| Desktop Wallet | Online (when active) | Moderate to High | Moderate | Power users, full-node syncing, staking |
| Custodial Wallet | Online | Low (trust required) | Very High | Beginners, exchanges, convenience |