Along with storing digital assets, signer wallets are used to sign off and execute transactions on and off-chain. Most applications for buying, selling and staking cryptocurrencies or minting and trading NFTs require connecting or creating a wallet that acts as both a signer and storage tool.
Such wallets are non-custodial, meaning you are the only party controlling the private keys. Alternatively, neither the wallet provider nor any other third party can access sensitive information and manage the stored assets.
How Can You Use a Signer Wallet on Nexo?
A signer wallet allows you to easily create your Web3 Identity inside the Nexo Wallet.
To do that, you need to create a new native Nexo Wallet or connect an existing non-custodial wallet like MetaMask or Coinbase. This wallet will serve as a signer, allowing you to securely execute single and batched transactions with your Identity.
Here is a step-by-step guide on how to create a native non-custodial Nexo Wallet and Identity.
The native Nexo Wallet will become the Primary Signer that will authorize transactions from your Identity. You can connect other non-custodial wallets and choose which one to serve as the Primary Signer associated with your Identity (here is how to change your primary signer wallet). Connecting additional wallets to your Identity ensures that even if you can’t access one (e.g., you’ve lost your seed phrase), you can use the other connected wallets to manage your funds.
Note: While you can connect several non-custodial wallets to your Identity, as of now, you won’t be able to disconnect the initial signer. That’s why it is important to carefully select the wallet you are first adding to create your Identity.
The final step to start using all of the Nexo Wallet benefits is to transfer assets and fund your Identity.
Why Are Signers Important?
From a security perspective, it’s not a good idea for web-based wallet interfaces to store private keys. This means web-based wallets can’t sign and execute transactions – creating the need for a signer wallet.
The signer wallet generates and stores the private keys and the digital signature needed for signing and broadcasting transactions. This process happens externally of the wallet application you are using. That way, even if there is a problem with the dApp you use as a wallet (e.g., its interface fails), you will still be able to safely access and manage your digital assets through your Identity.
Signer wallets are a critical element, improving the resilience of decentralized identity systems and enabling them to function properly. They help ensure the security and integrity of dApp wallet services by preventing unauthorized transaction execution.
The practice of using signer wallets eliminates the theft risk. It ensures users’ peace of mind even when storing large amounts of cryptocurrencies.
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