A non-custodial wallet is a wallet in which the user directly controls the private keys required to manage assets. A third party should not have unilateral authority to sign transactions on the user’s behalf.

When a wallet is created, it may generate a seed phrase from which keys and addresses can later be derived. The user is responsible for protecting this key material. If the key is lost and no backup exists, there may be no centralized recovery service.

Non-custodial wallets can interact directly with DeFi, dApps, and smart contracts. At the same time, they place greater responsibility on the user because compromised keys or malicious signatures can directly affect the assets.