Best Cryptocurrency Wallets for Avalanche (AVAX)

Looking for the best crypto wallet for Avalanche? Check out the Ledger Nano S!

Avalanche is a blockchain platform that aims to address the blockchain trilemma of security, scalability and decentralization thanks to its unique proof-of-stake (PoS) mechanism. Considered by many as an Ethereum competitor, Avalanche trumps Ethereum in terms of gas fees and has the capacity to process up to 6,500 transactions per second. However, because Avalanche uses the Ethereum Virtual Machine, it more so complements Ethereum than competes with it. 

The native coin, AVAX, serves as the Avalanche ecosystem’s medium of exchange. AVAX powers the network, and it’s used to distribute system rewards, facilitate transactions on the network and participate in governance.

Avalanche is made up of three primary interoperable blockchains: X-Chain, C-Chain and P-Chain. With each blockchain taking on different roles, Avalanche improves scalability and speed compared to all processes running on just one chain. 

• Exchange chain (X-Chain) is used for exchanging and creating AVAX tokens and other digital assets. 
• Contract chain (C-Chain) is where developers can create smart contracts for decentralized applications (dApps). Since smart contracts are written in Solidity language also used by Ethereum, Avalanche achieves notable blockchain interoperability. 
• Platform chain (P-Chain) coordinates network validators and tracks active subnets, and allows for the creation of new subnets.

Since its launch in 2020, Avalanche has skyrocketed in price, resulting in an increase in popularity and total Avalanche users. The following discussion reviews the best Avalanche wallets you can use today. 

Best Cryptocurrency Wallets for Avalanche

Crypto wallets allow users to receive, send and store their digital assets/currencies. Two types of wallets can be used to store cryptocurrencies: hardware wallets and software wallets. A hardware wallet is widely regarded as the most secure way to store crypto. Unlike software wallets, hardware wallets are disconnected from the internet and are not prone to cyber threats and other forms of remote hacking. Instead, hardware wallets keep your private keys offline so that your crypto is inaccessible to anyone but the holder of the private keys.

Software wallets are downloaded as applications or web extensions over phones and other devices connected to the internet. Similarly to hardware wallets, it is not too much of a hassle if you lose your wallet’s private key as you can recover it using your secret recovery phrase. Since wallets are interoperable, you can use your recovery phrase on any wallet, and your funds will be recovered. When using a software wallet, it is recommended that you activate two-factor authentication to further protect yourself from security threats.

When choosing a cryptocurrency wallet, the following features should be considered:

• Security features: What features ensure security?
• Price: How much does the cost compare with competing wallets?
• Supported cryptocurrencies: Are the coins and tokens you want to store supported?
• Portability: How easy is it to carry around on a daily basis?
• Access: How do you actually access your crypto?
• Ease of use: How easy is it to set up and use?

Best Software Wallets for Avalanche

Software wallets make using your cryptocurrency easy while providing better security than letting an exchange maintain custody of your digital assets. The best part: software wallets are free to use. Check out some of the best Avalanche software wallets you can start using today.

MetaMask Wallet

MetaMask is by far the most popular crypto-wallet software with over 21 million monthly active users — up by 38 times since 2020. MetaMask comes as a browser extension and is available for Chrome, Firefox, Brave and Edge. In terms of mobile application, it doesn’t matter what type of device you are using — MetaMask is available for both Android and Apple devices. 

The default network for all MetaMask wallets is the Ethereum mainnet, however, you can also connect to other blockchains that run an Ethereum Virtual Machine (EVM). Because of this feature, MetaMask supports the Avalanche blockchain and many other smart chains. More specifically, the Avalanche Network can be configured to receive and manage AVAX C and access dApps made on the Avalanche network. Adding Avalanche to MetaMask is easy and can be done in a matter of seconds. 

Coinbase Wallet

The aim of Coinbase Global Inc. (NASDAQ: COIN) is to enable anyone, anywhere, to easily and securely access cryptocurrency. Coinbase has more than 89 million verified users and is a platform where you can buy, sell, store, use and earn AVAX. You can also store your AVAX using Coinbase’s unique software wallet, adding an additional level of security.

The main advantage of the Coinbase wallet is that it allows for seamless transfers of AVAX to and from different wallet addresses while emphasizing security through two-factor authentication. These features make Coinbase a great option for both beginner and advanced users. Users can use Coinbase Pro, a feature that keeps 98% of the funds deposited on the platform in cold storage making it impossible for hackers to steal more than 2% of users’ funds through an online attack.

Best Hardware Wallet for Avalanche: Ledger Nano S

The Ledger Nano S, one of the most secure and trusted hardware wallets in the world, fully supports Avalanche (AVAX). The integration enables users to securely store and access their AVAX tokens on X-Chain, C-Chain and P-Chain addresses using the Ledger Nano S. 

A hardware wallet plays a pivotal role in helping users secure their crypto. It does so by storing your private key –– which is used to authorize transactions and other operations from your Avalanche Wallet –– offline in a device. This feature adds another layer of security, as malicious actors would need the physical device to complete their theft. 

Do you Need to use a Crypto Wallet?

Technically, you don’t need to keep your coins in a software wallet or hardware wallet. Many crypto exchanges allow you to store your cryptocurrency within a wallet on the exchange, and some people leave it at that. 

However, doing so comes with additional risks. Exchanges can easily become compromised, which ultimately puts your crypto at risk. For example, in 2020, KuCoin –– one of the largest crypto exchanges in the world –– experienced a hack worth more than $200 million. Though users' funds were recovered, it underlines the risk any exchange can carry.

As a result, it is best practice to store your crypto in either software or hardware wallets. Hardware wallets are best for long-term holdings, as they provide the most security, while software wallets can be used to facilitate day-to-day transactions.

Where to Earn Interest on Avalanche (AVAX) Tokens

Staking is considered a public good for the Avalanche ecosystem. It involves locking up AVAX  to secure the network and earn rewards  in the process.

You can earn rewards on Avalanche with the following applications or platforms:

1. Blockfi offers an APY of 10% for AVAX.
2. Crypto.com offers an APY of up to 6% for AVAX.
3. Celsius offers an APY of up to 5.75% and an in-CEL reward rate (APY) of up to 7.53% (accredited investors only).

Cryptocurrency Wallet Best Practices

So you decided to take control of your crypto assets by using a crypto wallet. Well done! Here are some steps you can take to further protect your crypto:

• Don’t keep crypto on exchanges for a prolonged period or longer than necessary.
• Always use two-factor authentication.
• If you use a hardware wallet, choose a pin code that is hard to guess and never put your 24-word recovery sheet online.
• Don’t boast of your crypto holdings publicly under your real name or identifiable address.
• Always assume that your devices can become compromised at any time and act with caution.
• When using software wallets, be aware of phishing sites.

Are Cryptocurrency Wallets Worth It?

Overall, it is best practice to use hardware and software wallets to maximize the security of your crypto. Software wallets are generally free to use and only require a small amount of technical expertise to operate. Nonetheless, while hardware wallets can range in prices, they are definitely worth the investment as they give you piece of mind that is not possible when relying on exchanges to secure your digital assets.

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Disclosure: ²Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts

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