Non-Custodial Wallets

Definition ∞ Non-Custodial Wallets are digital asset storage solutions where the user retains complete control over their private keys and, consequently, their funds. Unlike custodial services, these wallets do not rely on a third party to hold or manage the user’s assets. This provides enhanced security and autonomy for the asset owner. Users bear full responsibility for safeguarding their private keys.
Context ∞ News often highlights the security benefits and user responsibility associated with non-custodial wallets, especially in contrast to the risks seen with centralized exchanges. The growing popularity of decentralized finance protocols has increased the demand for these wallets, as they are essential for direct interaction with smart contracts. Discussions frequently center on usability improvements and recovery mechanisms for lost keys.