Thread by @jujubz_eth

Throughout my journey in Web3, the word "#HardwareWallet (HW)" has been chanted when it comes to security.

However, no one really explains on wallet management to obtain the "best" security.

I would cover a few FAQs with hope that it would help with your NFT management. 🧵👇🏽

2/ Let's first clear up some definitions

#HotWallet - Wallet that interacts with smart contracts. For minting & trading.

Burner Wallet - Wallet for Free/Stealth Mint or interacting with unverified websites/contracts.

#ColdWallet - NFT Vault. NO INTERACTION with smart contracts

3/ What about software (SW) & hardware wallets?

The main difference with HW, is how the seed phase is entered:

HW: on the device itself -air gap from internet
SW: on phone/PC - has internet connection

Hence, should there be malware on the pc, a seed phrase leak could happen.

4/ What HW & SW should you use?

SW:
Ethereum & EVM Based - @metamask & @brave wallet
Solana - @phantom & brave wallet

HW that can be paired with SW above:
Ethereum - @Ledger/@Trezor
Solana - Ledger

EVM-based networks: Polygon, Arbitrum, Optimism, BSC, Avalanche, Cronos, & etc.

5/ Hot wallet = Metamask/Phantom account & Cold wallet = Ledger?

With that, a hardware wallet could become a hot wallet should you interact with a smart contract. This happens when you decide to mint, trade, or sign transactions with the hardware wallet.

6/ What would be the best configuration for wallet security?

You should have 5 different accounts as such:

On SW:
1. Mint/Trading - SW
2. Burner - SW

On HW:
3. Selling Wallet
4. Cold Storage/"Vault"
5. NFT Pass/tools

The diagram below should help to understand the flow.

6/ Wait... Selling Wallet on HW? 🤔

YES! This would be the case when listing a mid/long-term hold NFT for sale hoping that someone is willing to pay that price.

Doing this on the mint/burner wallet runs the risk of these NFTs being drained by a fraudulent contract.

7/ What should I do if I want to sell NFTs from my vault?

Send them to the "Selling Wallet" located on the hardware wallet and list them from there. Do not try to list those NFTs directly from the Vault as it would then become a Hot Wallet.

8/ Would it not be better for me to have 2 HW? One for Selling & Passes and another as a Vault.

YES! It would be better. But take into account that you now have 2 HW wallets with 2 sets of Seed Phrase (SP) to manage.

What if you lose the SP of the Vault?

8.1/ I personally have 2 HW (Nano X & Nano S Plus) and use the Nano X as my main HW and the Nano S Plus as the backup wallet.

The Nano S uses the same SP as the X and comes in handy if I were to lose my Nano X and am in immediate need of my HW.

8.2/ This way, I would never use the HW SP on a software/mobile wallet keeping my prized/long-term asset "secure". Rest assured that nothing beats having able to sleep soundly at night knowing that my assets are safe.