Both Cryptocurrency experts and newbies are faced with one task; securing their crypto wallet. One undeniable fact is that being an expert doesn't exempt one from a wallet hack. Many cryptocurrency experts have suffered huge token losses in the past due to their wallets being compromised either through the smart contract they interacted with or through a vulnerability in the wallet itself. Some months back, there was a vulnerability in the Trust wallet which led to the loss of funds for many users.

It is thus important that Cryptocurrency users, especially Decentralized Finance users who interact often with Smart Contracts ensure that they do their best in securing their wallets. In this blog, we will explore the various ways through which people make their wallets vulnerable, unknowingly, and how we can protect our wallets.

1. Storing Your Seed Phrase As A Document.

Many Cryptocurrency users make the mistake of storing their Seed phrase as a document. To them, it is a good way of having access to the Seed Phrase in the document when needed.

It is a bad practice because once the phone is compromised through phishing links and downloaded malware from images/videos, the document can easily be accessed.

Again, if you remember very well, most applications sort for permission to files on the phone before they can be installed.

When we permit applications to access files on the phone, we have given them access to every file on the phone Including the document containing the Seed Phrase.

If the app was created by a fraudulent developer, the app can send back information to the developer which can include the Seed Phrase.

Solution

It is safer to write down your Seed Phrase on paper, preferably a Jotter, and store it well. What I do is, I choose three different numbers on the Seed Phrase and swap the positions of the words. The essence is that even if the paper is accessed by another person, the possibility of getting the Seed Phrase numbering position right is slim.

However, you need to take into account the positions you swapped to and fro because if you miss the right positioning, you won't also have access to the wallet. So, it is safer if you write it as it is and then keep it somewhere safe if you won't be able to keep track of how you swapped the positions.

Alternatively, if you have the money, get a Ledger.

2. Connecting To Dapps Without Scrutinizing Its Smart Contract, And Not Disconnecting Your Wallet After Interacting With A Smart Contract.

Many Defi lovers, especially newbies, are enticed by the huge APR of some DEFI products without assessing the possible risks. By interacting with a Smart Contract, we give the Smart Contract the right to spend our tokens. This right can be limited or unlimited depending on the coding of the Smart Contract. It is thus important to scrutinize the Smart Contracts.

Secondly, some Defi users forget to disconnect their wallets from Smart Contracts after using them. The Smart Contract might not be fraudulent at the time of their interaction, but if the Smart Contract is somehow compromised afterward while their wallet is still connected to it, their wallet will be compromised and their token lost.

Solution

Ensure you scrutinize the Defi platform you want to use. Check if the platform has been audited by any of these firms.

CertiK - For Smart Contract Auditing

Hacken - For DeFi Protocols

Trail of Bits - For Web2.0 Companie

OpenZeppelin - Smart Contract Audits for EVM Chains

Quantstamp - Audits for DeFi Protocols

Always disconnect your wallet from Dapps after using them. Do not assume that the Dapp is secure. It doesn't take much energy to connect back to the Dapp next time.

3. Not Having A Separate Mobile/PC for Your Financial Activities

When we surf the internet, we expose the device we are using to the dangers of downloading malware along the process. Sometimes we accidentally click phishing links which can pose security threats to our crypto wallets.

Solution

Ideally, we should have a separate device for financial transactions. This device should be solely used for financial transactions and only trusted websites shall be used. This is to minimize the dangers that come from browsing the internet, and downloading files and applications.

4. Using Only Email Options When Signing Up On Centralized exchanges.

Many centralized exchange users make the mistake of using only the email option when signing up on some centralized exchanges. The consequence of this is that once the email is compromised, the crypto account will be at risk.

Solution

Always have both email and your phone number linked to your wallet account. Ensure that you go further by adding 2FA. Nevertheless, do not misplace the initiation code for the 2FA. You will need it in case you want to access the wallet from another device.

Adhering to these tips will help one safeguard his crypto wallet from bad players. Once a wallet is compromised, especially the Seed phrase, there is virtually no remedy for the wallet, thus we have to guide our wallet very well.

Be cautious of where you connect your wallet, the links you click while browsing, and more especially the files you download.

There is what is termed Keyboard hijacking. When a keyboard is hijacked by a scammer because the user installed the scammer's files accidentally, the scammer has control over copied texts. Your copied wallet address can be replaced by his own during deposits or withdrawals. Also, when you copy your seed phrase with the affected keyboard, the hacker will have access to the phrase.

So, always ensure you check the last five letters of your deposit/withdrawal address before copying them from the source wallet and before sending the token out. Your keyboard may have been hijacked without your knowledge, so this is the only way to be sure that the deposit / Withdrawal address hasn't been swapped.