A crypto wallet is an app that stores your keys, the secrets that prove some coins on a network belong to you, and uses them to sign transactions. The coins never sit inside your phone or laptop. They live on the network, recorded on a public ledger shared by thousands of computers.
Whoever knows the key can spend the coins. So the questions that matter are who holds your keys, a company or you, and how you keep them safe.
Keys and recovery phrases
Every wallet is built on a pair of keys. The public key works like a home address: share it freely, because people need it to send you funds. The private key works like the only copy of the key to your front door. It signs transactions, and anyone who holds it controls everything in the wallet.
Nobody memorizes a private key. When you create a wallet, the app generates a recovery phrase instead, usually 12 or 24 ordinary words in a fixed order. Those words can recreate your keys on any device, which makes the phrase, in a real sense, the wallet. Lose the phone, delete the app, drop the laptop in a lake, and the phrase brings everything back on a new device.
Custodial vs self-custodial
A custodial wallet is one a company manages for you. Most exchange accounts work this way. You log in with an email and password, and the company holds the keys behind the scenes. It's convenient and familiar: forget the password and support resets it. The cost is that the company controls the keys, and your balance is a claim on them.
A self-custodial wallet keeps the keys on your side only. No company has a copy, not even the company that made the app. The login can still feel familiar: Based is a self-custodial wallet you open with your email or Google account, and neither Based nor its login provider, Privy, can access your funds. What makes a wallet custodial is who holds the keys, not how you sign in. If you're here for stock trading specifically, read what self-custodial stock trading means.
Why no one can freeze it, and no one can reset it
Both facts come from the same place. Because no company holds your keys, no company can freeze your balance, block a withdrawal or seize the funds. There's nobody to pressure and nobody to call. And because no company holds your keys, there's no password reset. Lose the phrase and the device together, and the funds are gone for good.
Control and responsibility come as a package. That's self-custody.
Safety habits that matter
If your wallet uses a recovery phrase, write it on paper. Not a screenshot, not a notes app, not cloud storage. Keep the paper somewhere safe, ideally in two separate locations. Digital copies get hacked. Paper in a drawer doesn't.
If your wallet uses email login instead, as Based does, secure that email account with two-factor authentication, because it's your way back in. Either way, never type a recovery phrase into a website. A legitimate wallet only asks for it when you're restoring your own wallet inside the app itself. Any website, pop-up, form or direct message asking for your phrase is a theft attempt, with no exceptions. Asking is the whole scam.
When moving money to a new wallet, send a small test amount first. Confirm it lands, then send the rest.
Once your wallet holds USDC, it also works as your access to markets: no brokerage account, no bank account, just a self-custodial wallet funded with USDC. The markets you reach through Based are perpetual futures on Hyperliquid, derivatives with liquidation risk and funding fees, and how to start trading on Hyperliquid walks through a first trade.