Hot Wallet
What is Hot Wallet?
Hot WalletA crypto wallet whose private keys reside on an internet-connected device, trading lower security for low-friction signing of frequent transactions.
Hot wallets are software wallets that hold private keys on devices with active network access: browser extensions (MetaMask, Phantom, Rabby), mobile apps (Trust Wallet, Coinbase Wallet), desktop applications, custodial exchange accounts, or server-side wallets used by dApp backends. They are convenient for daily DeFi, NFT minting, gaming, and trading, but are exposed to malware, info-stealer logs, malicious browser extensions, phishing, drainer kits, and operating-system compromise. Risk-reducing patterns include holding only small balances, segregating funds across multiple wallets, using transaction-simulation features, enabling allowlists, and pairing the hot wallet with a hardware signer for higher-value approvals.
● Examples
- 01
MetaMask browser extension used as the everyday DeFi wallet on Ethereum and Layer-2 networks.
- 02
An exchange hot wallet that holds the liquidity needed for customer withdrawals.
● Frequently asked questions
What is Hot Wallet?
A crypto wallet whose private keys reside on an internet-connected device, trading lower security for low-friction signing of frequent transactions. It belongs to the Web3 & Blockchain category of cybersecurity.
What does Hot Wallet mean?
A crypto wallet whose private keys reside on an internet-connected device, trading lower security for low-friction signing of frequent transactions.
How does Hot Wallet work?
Hot wallets are software wallets that hold private keys on devices with active network access: browser extensions (MetaMask, Phantom, Rabby), mobile apps (Trust Wallet, Coinbase Wallet), desktop applications, custodial exchange accounts, or server-side wallets used by dApp backends. They are convenient for daily DeFi, NFT minting, gaming, and trading, but are exposed to malware, info-stealer logs, malicious browser extensions, phishing, drainer kits, and operating-system compromise. Risk-reducing patterns include holding only small balances, segregating funds across multiple wallets, using transaction-simulation features, enabling allowlists, and pairing the hot wallet with a hardware signer for higher-value approvals.
How do you defend against Hot Wallet?
Defences for Hot Wallet typically combine technical controls and operational practices, as detailed in the full definition above.
What are other names for Hot Wallet?
Common alternative names include: Online wallet, Software wallet.
● Related terms
- web3№ 198
Cold Wallet
A crypto wallet whose private keys are generated and stored on a device that is kept offline, so they are not exposed to remote network attackers.
- web3№ 1003
Seed Phrase
A human-readable list of 12 or 24 words (typically a BIP-39 mnemonic) that encodes the master secret from which all keys of a crypto wallet are derived.
- web3№ 1221
Wallet Drainer
Malicious software or a phishing kit that tricks crypto-wallet users into signing transactions or approvals that hand over all valuable tokens and NFTs.
- attacks№ 821
Phishing
A social-engineering attack in which an attacker impersonates a trusted party to trick a victim into revealing credentials, transferring money, or running malware.
- malware№ 531
Info Stealer
Malware that harvests credentials, cookies, tokens, crypto wallets, and other sensitive data from an infected device and exfiltrates it to the attacker.
- web3№ 106
Blockchain Security
The discipline of protecting distributed ledgers, their consensus mechanisms, smart contracts, and surrounding infrastructure from compromise, fraud, and theft.