What is a DeFi wallet? How to install MetaMask and connect to dYdX
To gain access to DeFi and other web3 applications, you need to create a non-custodial wallet. A non-custodial wallet is a digital asset wallet with a private key controlled by the owner. In contrast, with a custodial wallet, a third party controls your private keys and assets.
The most popular browser-based non-custodial wallet is currently Metamask. To download it, go to Metamask.io and select your browser. Then, create a new wallet and enter a unique and secure password.
When creating a wallet, Metamask generates a secret recovery phrase, also known as a seed phrase. It is important to write it down and store it in a secure physical location, such as a safe. Anyone who has access to your password or seed phrase can access your funds. You can share your public-facing wallet address with anyone you choose, but never export or share your private key with anyone.
dYdX uses USDC as collateral for trading. One way to transfer funds to your new wallet is to send coins from a centralized exchange, such as Coinbase. Transfers may incur a network fee, known as a gas fee.
Video glossary
Centralized Exchange
A platform run by a centralized business entity that allow users to buy and sell cryptocurrencies.
Custodial Wallet
A wallet service offered by a business, such as a centralized exchange, where a third party controls your private keys.
Non-Custodial Wallet
A digital asset wallet where the user controls their own private keys. With a non-custodial wallet, if you lose the private key, the contents of the wallet can never be retrieved.
Seed Phrase
A series of random words generated by your wallet during setup. The seed phrase can be used as an emergency backup if you ever lose access to your wallet.
Private Key
A large string of letters and numbers, similar to a password, that grants you access and allows you to manage your digital assets.
Public Address or Public Key
The public facing address of your crypto wallet.
