Binance announced the launch of its new Web3 wallet
12th Nov, 2023
Binance announced the launch of its new wallet(web3) at the Binance Blockchain Week conference in Istanbul, to be made available to all users through the Binance mobile app.
During the launch, Binance CEO Changpeng “CZ” Zhao, revealed the intent behind launching the service:
“Web3 wallets represent more than just storing digital assets — they are an integral part of the Web3 framework, empowering individuals with the ability for self-sovereign finance.”
Simplifying matters, Binance's Web3 wallet seamlessly integrates into the main Binance application, primarily designed for cryptocurrency trading. This wallet employs multiparty computation (MPC) to divide a user's private keys into three smaller components referred to as key shares.
“Having the key shares split across three different locations mitigates the risk of the keys being compromised and reduces the vulnerability of the system.”
Two of the three key shares will be controlled by the user at all times, allowing for self-custody. Binance spokesperson confirmed with Cointelegraph that the Binance Web3 Wallet is not available to users in the US as Binance.com is not available in the US. CZ added:
“Binance’s Web3 Wallet lowers the barriers of entry for users to achieve full self-custody of their assets, and it is an important, convenient bridge towards DeFi empowerment. Ultimately, our priority is to ensure users can explore Web3 with us within a user-friendly and protected environment.”
As stated by Richard Teng, Head of regional markets at Binance, the implementation of MPC technology addresses concerns about potential loss of one's seed phrase. Teng emphasized the commitment to providing users with confidence in a secure and protected Web3 environment, achieved through the integration of MPC technology and Binance's established security infrastructure into the Web3 Wallet.
as reported by cointelegraph, A spokesperson from Binance, speaking to Cointelegraph, underscored the importance for users to remain vigilant in safeguarding their wallet assets and access.
"If a user forgets their recovery password AND loses their device/delete the Binance app, they won’t be able to access their Web3 Wallet and Binance will not be able to restore it for them."
The three key shares will be distributed across three locations: Binance holds the first part, the second part is stored locally on the user's mobile phone, and the third part is encrypted by the user's recovery password and backed up on their personal cloud storage, such as iCloud or Google Drive. Binance's expansion into additional crypto services coincides with challenges in retaining investors in its spot trading business. A report from blockchain analytics firm 0xScope indicated a decline in Binance's spot trading market share to 40% in 2023. Researchers noted:
“Binance’s spot trading volume has seen a significant decline in the past year, perhaps due to its listing strategy. Most popular coins experienced a downturn immediately after being listed on Binance.”
On the contrary, Korean crypto exchange Upbit saw the most significant increase, with its spot market share increasing from 5% to 15.3% during the same period. CZ, too, saw his net worth slashed by 38% amid a slump in exchange volumes, according to the Bloomberg Billionaires Index.