Recently, many people have been asking me what a DeFi wallet actually is, and I think it's necessary to have a good discussion about this topic.

Simply put, a DeFi wallet is a non-custodial wallet where you control your private keys yourself, unlike centralized exchanges that hold your assets on your behalf. This feature is very important — you have full control over your crypto assets, which is the core meaning of decentralization.

The benefit of using a DeFi wallet is that you can participate in various innovative market opportunities. For example, trading NFT art, investing in different derivatives, and even interacting directly with some innovative DeFi protocols through your wallet. These opportunities are indeed very attractive, especially for investors looking to diversify their portfolios.

But I must honestly say that using a DeFi wallet also involves certain risks. The crypto asset market is highly volatile, which is a well-known fact. Market sentiment can change rapidly, and panic selling can cause prices to plummet instantly, sometimes experiencing significant drops overnight.

Especially if you have collateralized assets in DeFi protocols for borrowing or leverage, market fluctuations become even more dangerous. The value of your collateral decreases, the risk of liquidation increases, and repayment pressure also rises. In such situations, a small mistake could lead to forced liquidation.

Therefore, the key to using a DeFi wallet is to be aware of the risks. Don’t be blinded by high returns; first understand what risks you are taking on. Proper allocation, controlling leverage, and regularly checking your positions — these basic practices are essential. A DeFi wallet gives you freedom, but freedom also means you are responsible for your own decisions.