Binance Adopts Hive Blockchain Feature with NEW Web3 Wallet Launch

In a significant move in the world of crypto currency Binance one of the leading crypto currency centralised exchanges (CEX) in the world has launched its first self custody Web3 crypto wallet.

This announcement was made during the Binance Blockchain Week conference in Istanbul marking a significant expansion for the platform who has come under regulatory scrutiny this year.

This new product is designed to operate across 30 different blockchain networks with multiple crossbridge abilities and is set to revolutionise how users interact with the decentralised finance (De-Fi) ecosystem.

Binance's Web3 wallet described by CEO Changpeng 'CZ' Zhao. Is more than just a means of storing digital assets as it is an integral component of the Web3 framework. It will grant users additional safety by enabling users self-sovereign control over their finances and lessen the risk of losing assets when exchanges collapse as seen throughout 2022 and 2023.

With this announcement Binance joins the ranks of MetaMask and Trust Wallet. Trust Wallet was acquired by Binance in 2018. Binance's commitment to the Web3 ecosystem is further underscored by the recent listing of TrustWallet's native token (TWT) on its futures market.

Keychain... I mean Binance Wallet Features

Trust Wallet's Wallet as a Service (WaaS) technology which was also unveiled in tandem with the Web3 wallet aims to simplify the development process for companies looking to introduce Web3 wallets into their business models. With a range of services provided including asset management and cross-chain transfers further facilitating the adoption of decentralised finance solutions.

Binance's Web3 wallet is accessible through its mobile app. This single application not only facilitates wallet creation but also serves as the platform for various De-Fi activities. Users will be able to engage in staking, lending, and borrowing. However, it remains uncertain whether users will be required to complete a know-your-customer (KYC) procedure to establish a wallet.

Web3 wallets are often targeted by hackers and exploiters due to the irreversibility of fund losses once a private key is compromised. Binance aims to address this vulnerability with multi-party computation (MPC) a new groundbreaking security measure. MPC essentially divides a private key into three parts called key shares. The wallet owner retains control over two of these key shares.

This approach ensures enhanced security without burdening users with the need to remember complex seed phrases. (this is something we see already in action on Hive Blockchain with our three key approach)
As CZ emphasized, Binance's top priority is to create a user friendly and secure environment for users to explore Web3.

This commitment to security and user protection is evident in their choice of security measures and it sets them apart in the competitive self custody wallet space.

How it will work across Binance

Binance's Web3 wallet will work in close integration with the Binance ecosystem. Unlike many self-custody wallets that allow users to export private keys Binance's Web3 wallet is intrinsically tied to the exchange's infrastructure which will restrict users from exporting their private keys. While this feature has been raising some concern around data privacy as specific details about data collection remain undisclosed at this time by Binance.

Richard Teng, Head of Regional Markets at Binance stated that the new Web3 Wallet is built on Binance's robust security infrastructure. This connection to the exchange's infrastructure can be seen as both an advantage and a potential concern as it may impact user control and privacy.

The terms of use for Binance Web3 Wallet stipulate that users must register an account on the Binance exchange and complete KYC processes to set up the wallet. Once created the wallet is permanently bound to the Binance account. This makes it impossible to change the wallet's address.

Furthermore, users are explicitly prohibited from exporting or importing a private key or seed phrase. This is due to the implementation of MPC technology which reinforces the wallet's security but restricts users from traditional methods of regaining access.

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TWT Takes a Hit!

The news of the Binance Web3 wallet has seen TWT token drop 14% in 24 hours as the market reacts to the new move by Binance who is likely to move away from Trust Wallet in favour of it’s own Web3 wallet.

Binance's launch of the Web3 wallet comes at a time when the exchange is facing challenges in the crypto currency market. Reports indicate a consistent decline in Binance's trading volumes since late 2022.

Trading volumes falling from 74% in December 2022 to 50% in October 2023. Binance has continued to encounter regulatory hurdles in several European countries with some jurisdictions revoking its license including Australia.

In France, the company faced investigations related to its operations prior to obtaining a license along with suspicions of aggravated money laundering. These legal challenges highlight the growing scrutiny faced by crypto currency centralised exchanges around the world and the need for robust security measures.

Image sources provided supplemented by Canva Pro subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services.

Posted Using InLeo Alpha