Core features of self-custody wallets: A safety and convenience guide every ETH user must know

What is a Self-Custody Wallet? Why ETH Users Need It

A self-custody wallet is a type of cryptocurrency wallet that allows users to have full control over their private keys and digital assets. Unlike centralized custody services, self-custody wallets store private keys locally on the user’s device, giving the user absolute ownership and control of their assets.

Since 2024, an increasing number of wallet products have begun to emphasize user privacy and autonomy. These wallets typically support multiple mainstream blockchains, including Ethereum(ETH), Bitcoin, Solana, and others, as well as Ethereum Virtual Machine(EVM)-compatible layer-2 networks like Arbitrum, Base, and Optimism.

For Ethereum users seeking decentralization and asset security, self-custody wallets offer a reliable solution—allowing them to enjoy the open ecosystem of Web3 while safeguarding their assets.

Core Features and Functions of Self-Custody Wallets

Modern self-custody wallet products possess the following key features:

Multi-Chain Ecosystem Support

Self-custody wallets usually support over 12 major blockchain networks, including:

• Ethereum(ETH) – the largest smart contract platform
• Bitcoin(BTC) – the oldest public chain
• Solana(SOL) – high-performance ecosystem
• Dogecoin(DOGE) – community-driven asset
• Polygon(MATIC) – layer-2 scaling solution
• Arbitrum, Base, Optimism, and other EVM-compatible layer-2 networks

However, it’s important to note that some popular blockchains (such as Binance Smart Chain, Cardano) and Bitcoin NFTs (like Ordinals, BRC-20 tokens) are not yet supported, which may limit certain user scenarios.

Top-Level Security and Privacy Protection

Security is the core competitive advantage of self-custody wallets, typically featuring:

• End-to-End Encryption – ensuring data security and preventing unauthorized access
• Biometric Authentication – supporting fingerprint or facial recognition to unlock the wallet
• Recovery Phrase(SRP) – providing 12- or 24-word backup phrases
• Privacy-First Design – not tracking IP addresses or collecting excessive user data

Compared to centralized exchanges, these wallets adhere to principles of decentralization and privacy protection.

Intuitive and User-Friendly Interface Design

Self-custody wallets aim to provide a simple operation experience for both beginners and experienced users. While the interface is friendly, new users might find the initial setup process somewhat more complex than some competing products.

Seamless Connection with DeFi Ecosystem

By supporting WalletConnect protocol, self-custody wallets enable users to:

• Interact securely with decentralized applications(dApps)
• Manage DeFi positions
• Participate in liquidity mining and other activities

This is crucial for users looking to explore the Ethereum DeFi ecosystem.

Transparency of Fees and Cost Considerations

Self-custody wallets are usually free to download and use, with no account creation or maintenance fees. However, users need to pay on-chain transaction fees, which depend on network congestion and transaction type.

Limitations of Self-Custody Wallets

Despite their powerful features, these wallets have some drawbacks:

• Lack of Desktop Version – limited to iOS and Android mobile platforms, which may not suit users who prefer desktop operation
• Limited Blockchain Support – supporting only around 12 chains, less extensive than some competitors
• Missing Advanced Features – no cross-chain swaps, fiat on/off ramps, or native staking functionalities yet

Is a Self-Custody Wallet Right for You?

Self-custody wallets are ideal for:

• Deep participants in the Ethereum ecosystem – requiring frequent interaction with DeFi applications
• Security-conscious investors – prioritizing privacy and autonomy
• Mobile users – accustomed to managing crypto assets via smartphones
• Beginners – wanting to start exploring Web3 with a simple interface

If you value privacy, seek full control over your assets, and can accept some limitations on mobile usage, a self-custody wallet will be a reliable tool for managing your crypto portfolio.

Risk Reminder: Cryptocurrency investments involve high risks, and asset values can fluctuate significantly. Before using any wallet or participating in crypto activities, please carefully assess your financial situation. If in doubt, consult legal, tax, or investment professionals.