Private Key Control: Users have full control over their private keys. A private key is a cryptographic key that is used to sign transactions and provides access to the funds stored in the wallet. Wallets that allow users to control their private keys ensure that the user has complete ownership and control over their assets.
Non-Custodial: The safest DeFi wallets are non-custodial, meaning they do not store users' private keys or funds on their servers. Instead, all information is stored locally on the user's device. This reduces the risk of hacks and breaches because there is no central server to target.
End-to-End Encryption: Data transmitted between the wallet and the blockchain network should be encrypted to prevent interception by malicious actors. End-to-end encryption ensures that the communication between the user's wallet and the blockchain is secure, protecting sensitive information from being intercepted and misused.
Open Source: Open-source wallets allow the community to scrutinize the code for vulnerabilities and contribute to its improvement. Transparency in the codebase ensures that security flaws can be identified and fixed promptly, making it less likely for malicious code to go unnoticed.
Multi-Signature Support: Multi-signature (multisig) wallets require multiple private keys to authorize a transaction. For example, a 2-of-3 multisig wallet would require two out of three private keys to approve a transaction. This feature adds an extra layer of security because even if one private key is compromised, the funds remain secure as long as the other required keys are kept safe.
Additionally, it's crucial for users to keep their software up-to-date, use strong and unique passwords, enable two-factor authentication where possible, and be cautious of phishing attempts and malicious software. Security in the context of DeFi wallets is not just about the features of the wallet itself, but also about user behavior and awareness.