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Three Ways to Help Practice Safe Hot Wallet.

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Three Ways to Help Practice Safe Hot Wallet.

Everyone with a vault has a hot wallet, if they want one or not. As your vault is just a hot wallet with very limited blockchain utility and no ability to engage in defi. Although this may be a benefit to a few people strictly looking to engage in the very limited Reddit Vault Ecosystem, most people may want to add their vault to another hot wallet like Metamask to enjoy greater defi access.

Here are Three Ways to Help Practice Safe cex Hot Wallet.

Tip #1: Use more than one Account and don't use your Vault for Defi.

The single most effective thing you can do to prevent yourself from being a victim of Defi hacks and scams is to use an account not associated with your Reddit vault for Defi. This can be done a couple ways:

  • Creating a "new account" for your existing wallet is the easiest way to help protect the assets in your vault. Think of this as one Seed Phrase connected to multiple public addresses/private keys.
    • However because it's still connected to the Seed Phrase for your vault there are still risks in which a compromised Seed Phrase can cause all your associated accounts to get drained.
  • A slightly more secure way of engaging in DEFI is using more than one Seed Phrase + account for other Defi interactions.
    • This will provide all the security of engaging with an address not associated with your vault, and the additional security of having multiple seed phrases securing different accounts.
    • Just make sure you safely secure all of the seeds.

For PC users this can be done using multiple hot wallet apps (MetaMask, Coinbase Wallet) with one Chrome Profile, or using multiple chrome profiles each with the same hot wallet app.

Tip #2: Utilize Spending Limits

When engaging in MetaMask transactions for non gas tokens you'll be asked to approve a spending limit before completing a transaction. It may be tempting to just approve the "Max" amount for spending, however you should never approve more than you're going to spend at that time.

Example of a Spending Limit Screen

In April 2023 SushiSwap pushed an update to their router contract that had vulnerabilities, which allowed anyone to spend anyone elses Crypto that had been "Approved" for spending.

https://preview.redd.it/rxp9wjidyvrb1.png?745&format=png&auto=webp&s=b924922868c23ee3113d0a968ec3e90e82b44c06

Suddenly anyone who approved the "Max" amount of Moons to be spent in the previous four days were at risk of having all of their funds drained. As a result three subreddit users had their Moons drained (SushiSwap later reimbursed these users). This exploit didn't matter if you used a hot wallet or a hardware wallet as the funds had already been approved for spending.

Never approve more than you're immediately going to utilize.

Tip #3: Utilize Revoke Cash or similar Tools

So you've been using DeFi for a while and over that time you've probably given many tokens/projects approval to access your account.

https://preview.redd.it/cr6h0fna2wrb1.png?801&format=png&auto=webp&s=69ed4b4585180c91a84f263c2a6ba8889d39e4c0

If one of these projects gets exploited later down the road it could result in you losing all of your Approved Funds/Assets, even if you haven't recently engaged with that platform. Using Revoke Cash or another Native Tool will allow you to see all of your active approvals and revoke them so later hacks/exploits will not impact you.

This post is a great resource for those looking to make sure they know how to revoke their approvals.

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TLDR:

  • Tip 1: Use more than one account to engage in Defi (don't use your vault).
  • Tip 2: Never Approve more funds for spending then you're immediately using.
  • Tip 3: Make sure to revoke Permissions so you're not impacted by later hacks/exploits.
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