Embedded Wallet
Carteira cripto integrada diretamente em um aplicativo, sem exigir extensão ou app separado, muitas vezes escondendo a complexidade das chaves do usuário.
Key points
- An embedded wallet is a crypto wallet built directly into an application, requiring no separate extension or app to be installed.
- It aims to make the experience simpler, often hiding the complexity of keys from the user.
- It commonly uses technologies such as multi-party computation or passkeys to balance simplicity and security.
What is an embedded wallet?
An embedded wallet is a wallet built into an application itself, whether on the web or on mobile. Instead of requiring the user to install a separate wallet and connect it, the wallet functionality is already part of the application. The goal is to reduce onboarding friction, letting people use crypto features without needing to master the setup of a traditional wallet.
How it works
The core idea is to simplify the experience. In many embedded wallets, the user signs in through familiar means, such as an email login or an account they already have, and the wallet is created and managed behind the scenes. The complexity of handling keys and recovery phrases is reduced or hidden, bringing the experience closer to that of an ordinary app, without the steps that tend to put off beginners.
To reconcile this simplicity with security, these wallets often rely on specific technologies. One common approach is multi-party computation, which splits control of the key among distinct parties so that it never exists whole in a single place. Another is the use of passkeys, modern authentication mechanisms that do away with passwords. These techniques aim to spare the user from having to keep a recovery phrase, without thereby concentrating all control in a single vulnerable point.
The model does, however, involve important considerations about trust and control. Depending on how it is implemented, an embedded wallet can vary widely in the degree of autonomy it gives the user: some come close to self-custody, while others concentrate more control with the provider. For that reason, it is essential to understand who truly holds power over the funds in each solution and what guarantees are offered. Convenience should not automatically be mistaken for full control by the user.
Understanding the embedded wallet helps evaluate solutions that prioritize ease of use without losing sight of who controls the funds.
Why it matters
Understanding the embedded wallet helps in grasping how applications reduce friction for new crypto users and why it matters to know who controls the funds in each solution. For a company integrating payments, this is a relevant concept. It is a technical concept, and none of this represents any recommendation to operate.
Risks and limitations
The degree of user control varies by implementation: some embedded wallets come close to self-custody, others concentrate power with the provider, which requires understanding the guarantees of each. Security depends on the technologies used and their correct implementation. Simplicity does not automatically equate to full control. Nothing here represents a recommendation to operate.