Hot Wallet

ALL 0-9 $A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Web3 Infrastructure • Tools • Interfaces

internet-connected wallet for active use

Hot wallet is a cryptocurrency wallet that is connected to the internet, allowing for quick and convenient access to digital assets. Common types include browser wallets, mobile wallets, and desktop wallets. While hot wallets are ideal for frequent transactions and dApp interactions, they are more vulnerable to hacking and malware compared to cold wallets, which remain offline.

Use Case: A trader uses a mobile hot wallet for daily swaps, staking, and QR payments while keeping long-term silver holdings secured in a cold wallet.

Key Concepts:

Browser Wallet — Online extension or app for dApps and DeFi
Mobile Wallet — Smartphone wallet for QR payments and portability
Desktop Wallet — Software wallet on PC, often with node syncing
Custodial Wallet — Third-party controlled wallet requiring trust
Hardware Wallet — Physical cold storage for maximum security
Cold Wallet — Wallet kept offline for long-term storage
Watch-Only Wallet — Monitoring wallet without private keys
Paper Wallet — Offline printed keys for cold storage
Air-Gapped Wallet — Fully isolated from networks
Multisig Wallet — Wallet requiring multiple signatures for access
Seed Phrase — Backup words securing wallet recovery
WalletConnect — Protocol linking hot wallets to dApps
Private Keys — Core cryptographic keys controlling access
Self-Custody — Direct ownership and control of assets
Crypto Wallets — General category of wallet types

Summary: Hot wallets prioritize convenience and accessibility for active crypto users. They’re essential for DeFi interactions, daily transactions, and dApp connections—but should hold only what you need for active use, with the majority of holdings secured in cold storage.

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

Hot Wallet vs Cold Wallet

understanding the core security trade-off

Hot Wallet (Online)
• Connected to internet
• Instant access to funds
• Quick dApp connections
• Vulnerable to hacks/malware
• Best for: Active trading, DeFi
• Examples: MetaMask, Bifrost, Trust

Cold Wallet (Offline)
• Disconnected from internet
• Requires physical access
• Manual transaction signing
• Immune to remote attacks
• Best for: Long-term storage
• Examples: Tangem, Ledger, Trezor

The Rule: Hot wallets for what you use, cold wallets for what you hold. Think of hot wallets like your checking account and cold wallets like your savings—keep most assets in cold storage, only what you need in hot.

Hot Wallet Types

choosing the right hot wallet for your needs

Browser Wallet
• Lives in browser toolbar
• Best dApp integration
• Desktop-focused
• Examples: MetaMask, Rabby
• Risk: Phishing, extensions

Mobile Wallet
• Smartphone app
• QR payments, portability
• Biometric security
• Examples: Bifrost, Trust
• Risk: Phone theft, malware

Desktop Wallet
• Installed on computer
• Often runs full node
• More features/control
• Examples: Exodus, Electrum
• Risk: Computer malware

Flare Ecosystem: Bifrost (mobile) offers native FTSO delegation and FlareDrops. MetaMask (browser) works after adding Flare RPC. Both are hot wallets—pair with Tangem for cold storage.

Hot Wallet Security

protecting always-online wallets

Do This
✓ Keep minimal funds in hot wallet
✓ Use strong unique passwords
✓ Enable biometrics when available
✓ Download only from official sources
✓ Revoke unused token approvals
✓ Use separate wallet for risky dApps

Never Do This
✗ Store life savings in hot wallet
✗ Share seed phrase anywhere
✗ Click links from DMs/emails
✗ Connect to unknown dApps
✗ Approve unlimited spending
✗ Use same wallet for everything

Common Hot Wallet Attacks
• Phishing sites stealing seed phrases
• Malicious browser extensions
• Clipboard malware (address swap)
• Fake wallet apps in app stores
• Social engineering scams
• Unlimited approval exploits

Security Tools
• Revoke.cash — Manage approvals
• Rabby — Transaction simulation
• Wallet Guard — Phishing protection
• Tangem — Move bulk to cold (10% off)
• Ledger — Hardware backup

Golden Rule: Assume your hot wallet could be compromised at any time. Only keep what you’d be willing to lose. Move long-term holdings to cold storage immediately.

Wallet Allocation Strategy

how to distribute assets across hot and cold wallets

Hot Wallet (5-15%)
• Active DeFi positions
• Weekly/daily transaction needs
• Gas tokens for fees
• NFTs you’re actively trading
• Experimental/risky interactions
• Funds you can afford to lose

Cold Wallet (85-95%)
• Long-term holdings
• Core portfolio positions
• Precious metals ($KAG, $KAU)
• NFTs for keeping
• Generational wealth
• Anything you’d be devastated to lose

Burner Wallet
~1-2% of portfolio
New mints, airdrops
Unknown dApps
Disposable if exploited

Main Hot Wallet
~5-10% of portfolio
Trusted DeFi only
Regular transactions
Approved protocols

Cold Vault
~85-95% of portfolio
Long-term storage
Rarely touched
Maximum security

Recommended Setup: Tangem (10% off) or Ledger for cold vault. MetaMask/Rabby for main hot wallet. Separate MetaMask account for burner. This layered approach limits damage from any single compromise.

When to Move to Cold Storage

triggers for moving assets from hot to cold wallets

Move Now Triggers
• Portfolio exceeds comfort threshold
• Received large transfer or airdrop
• Finished active DeFi campaign
• Converting to long-term hold
• Taking profits from trades
• Cycle exit into stable assets

Keep in Hot Triggers
• Actively farming or staking
• Need for frequent transactions
• Still researching/experimenting
• Gas token reserves
• NFTs you’re actively listing
• Positions you’ll exit soon

Simple Rule: If you won’t touch it for 30+ days, it belongs in cold storage. Precious metals like $KAG and $KAU earning Holder’s Yield? Perfect for cold storage—yield continues regardless of wallet type.

Hot Wallet Risks by Type

understanding vulnerabilities of each hot wallet category

Wallet Type	Primary Risk	Attack Vector	Mitigation
Browser Wallet	Phishing/Extensions	Fake sites, malicious extensions	Verify URLs, limit extensions
Mobile Wallet	Physical theft	Phone stolen, SIM swap	Biometrics, no cloud backup
Desktop Wallet	Malware	Keyloggers, clipboard hijack	Antivirus, dedicated device
Custodial Wallet	Platform failure	Exchange hack, bankruptcy	Withdraw to self-custody

Universal Protection: Regardless of hot wallet type, the best mitigation is keeping minimal funds exposed. Use hot wallets as temporary holding areas, not permanent storage. Cold storage (Tangem 10% off) eliminates all online attack vectors.

Hot Wallet Checklist

maintaining security for always-online wallets

Setup Security
☐ Download from official source only
☐ Write seed phrase on paper
☐ Store backup in secure location
☐ Set strong unique password
☐ Enable biometrics if available
☐ Create separate burner wallet

Ongoing Habits
☐ Check approvals monthly (revoke.cash)
☐ Keep minimal funds loaded
☐ Update wallet app regularly
☐ Verify dApp URLs before connecting
☐ Review transactions before signing
☐ Disconnect unused sessions

Red Flags to Watch
☐ Unexpected token approvals
☐ Unknown tokens appearing
☐ Transactions you didn’t make
☐ Apps requesting seed phrase
☐ “Support” DMs asking to connect
☐ Too-good-to-be-true airdrops

Security Upgrade Path
☐ Get hardware wallet for cold storage
☐ Tangem — NFC card (10% off)
☐ Ledger — USB/Bluetooth
☐ Move 85%+ to cold storage
☐ Use hot wallet only for active use
☐ Never store seed phrase digitally

Bottom Line: Hot wallets are necessary tools for active crypto participation, but they’re not vaults. Treat them like your physical wallet—carry what you need, keep the rest in the safe.

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