Hardware Wallet

Trust the best strategy in crypto bear market — Trust Wallet CEO

Cointelegraph sat down with Trust Wallet CEO Eowyn Chen to talk about how Web3 can become a better experience for everyone.

Bringing the global crypto and blockchain communities together in Istanbul, Turkey, the Binance Blockchain Week 2023 was a clear indicator that the Web3 ecosystem continues to grow regardless of price movements.

Despite being a Binance event, the conference housed several key players from the crypto industry.

Among them was Trust Wallet, a decentralized Web3 wallet provider acquired by Binance back in 2018. Since its acquisition, Trust Wallet has been widely seen as “the wallet arm of Binance.” This is why the Binance Blockchain Week visitors were caught off-guard when the crypto exchange announced its own Web3 wallet.

Trust Wallet CEO Eowyn Chen — a former vice president at Binance — clarified that “Binance focuses on the centralized, while Trust Wallet works toward the decentralized ecosystem,” adding that Trust Wallet has a neutrality that can serve and partner with anyone in the crypto industry.

“We think that keeping that independence and distance is the best way to keep the culture and the talents running for its own mission.”

Trust Wallet was born in 2017 during the initial coin offering craze due to the need for an accessible mobile wallet, Chen said.

Cointelegraph sat down with Trust Wallet CEO Eowyn Chen during Binance Blockchain Week Istanbul. Source: Cointelegraph

“Recently, we became a sister company of Binance rather than operating under Binance because we can have a better playing field,” Chen explained.

“Scammers provide better customer support”

Compared to fixing the user experience, solving the security issues across Web3 is trickier, according to Chen.

Binance self-custody wallet launches crypto-to-fiat off-ramp

Trust Wallet has partnered with MoonPay and Ramp to allow customers to convert their crypto to fiat without using any centralized exchange.

Trust Wallet, the noncustodial and multichain crypto wallet, has partnered with Ramp and MoonPay to introduce seamless crypto-to-fiat withdrawals for its users. The partnership will allow wallet users to convert crypto to fiat directly within the wallet app.

The feature eliminates the need for transferring funds to a centralized wallet to liquidate or convert to fiat. With the help of this new functionality, users may now enter and exit the cryptocurrency market totally through their self-custody wallet and take complete control of their cryptocurrency funds.

The crypto-to-fiat conversion feature comes when centralized exchanges and even peer-to-peer platforms are shutting down. The latest to shut up shop is Paxful, a popular P2P global exchange that announced its closure on April 4, citing regulatory challenges and staff shortages.

Trust Wallet’s head of product, Eric Chang, said that the off-ramp feature would prove to be a boon for customers, especially at a time when the market is turbulent, and crypto platforms are under heavy scrutiny over managing customers’ funds.

Trust Wallet is the official cryptocurrency wallet of Binance. It offers access to 65 different blockchains and boasts a customer base of 60 million users. The wallet also gives users access to decentralized applications (DApps), enabling them to communicate with DApps on any supported blockchain. Some of its key features include buying, staking, trading and storing various cryptocurrencies.

However, Trust Wallet is not a cold wallet or hardware wallet, where it remains offline until given access by the users. Trust Wallet works as a hot wallet as long as there’s an internet connection. The wallet can be accessed via a secure connection online. While this feature was intended to help users, it proved to be a disaster for the co-founder of the Web3 metaverse game engine “Webaverse,” who lost $4 million from his Trust Wallet.

Crypto wallet provider Ledger raises $109M as demand for self-custody soars

The funding is the first of three rounds for the hardware wallet provider, whose success has been fueled by growing awareness of crypto self-custody.

Hardware wallet provider Ledger has raised 100 million euros ($109 million) in a Series C funding round extension, placing its valuation at 1.3 billion euros ($1.4 billion), in line with its previous funding in June 2021, Bloomberg reported on March 30. The funding is the first of three investment rounds.

According to the report, a second closing is due in April, followed by a third funding to take place at a later date, given “high investor interest.” The capital will be used to expand the company’s distribution network, increase production, and develop new products.

Ledger’s new investors include VaynerFund, Cité Gestion SPV, True Global Ventures and Digital Finance Group. Previous investors include Morgan Creek, Cathay Innovation, Draper Dragon and Cap Horn, among others.

Ledger is proud to announce our Series C extension fundraising round.

We continue our mission of bringing ease-of-use and uncompromised security to your digital value.

Read what our CEO @_pgauthier has to say:https://t.co/JSHyi5jKIQ pic.twitter.com/aGi2FhOXCs

— Ledger (@Ledger) March 30, 2023

In a recent interview with Cointelegraph at Paris Blockchain Week, Ledger CEO Pascal Gauthier noted that the collapse of crypto exchanges and banks in recent months had raised the level of awareness about crypto self-custody. “Whenever the market gets stressed and whenever people fear for their savings, you know, they rush to crypto and to Ledger,” Gauthier noted.

Ledger reportedly had its best month of sales in November following the dramatic collapse of the crypto exchange FTX. According to the company, revenue from Ledger Live’s buy-and-sell crypto app has grown 200% in the past 12 months. Hardware wallet provider Trezor also benefited from FTX’s failure, reporting a 300% surge in sales revenue as a result of investors rescuing their funds.

Ledger claims to store more than 20% of crypto assets in circulation and 30% of the nonfungible tokens supply. Among recent moves, the company hired Tony Fadell, a builder of the iPhone, to design a new version of its hardware wallet.

Prominent figures in the industry have also encouraged crypto self-custody. “Self custody is a fundamental human right. You are free to do it anytime. Just make sure you do it right,” Binance CEO Changpeng Zhao said in November, advising investors to start small and learn the technology.

Scam alert: Trezor warns users of new phishing attack

The new active phishing attack tries to steal Trezor users’ crypto by tricking investors into entering their recovery phrase on a fake Trezor site.

Hardware cryptocurrency wallet provider Trezor has warned its users about a new phishing attack targeting their crypto investments by trying to steal their private keys.

Trezor took to Twitter on Feb. 28 to caution users about an active phishing attack designed to steal investors’ money by making them enter the wallet’s recovery phrase on a fake Trezor website.

The phishing campaign involves attackers posing as Trezor and contacting victims via phone calls, texts or emails claiming that there has been a security breach or suspicious activity on their Trezor account.

“Trezor Suite has recently endured a security breach, assume all your assets are vulnerable,” the fake message reads, inviting users to follow a phishing link to “secure” their Trezor device.

“Please ignore these messages as they are not from Trezor,” Trezor declared on Twitter, emphasizing that the firm will never contact its customers via calls or SMS. The firm added that Trezor had not found any evidence of a database breach.

*A fake SMS from scammers posing as Trezor. Source: Twitter*

According to online reports, the latest phishing attack against Trezor customers was launched on Feb. 27, with users being directed to a domain asking to enter their recovery seed. The domain provides a perfectly-made fake Trezor website that prompts users to start securing their wallets by clicking the “Start” button.

*A screenshot from a phishing domain copying Trezor’s website. Source: Bleeping Computer*

After clicking the “Start” button, users will be asked to provide the recovery phrase for their cryptocurrency wallet.

The wallet’s recovery phrase, or private keys, is the most important part of self-custody by keeping your crypto on a software or hardware noncustodial wallet. The safety of the recovery phrase is more important than keeping the hardware wallet safe. Once the private keys are stolen, it means that crypto holdings no longer belong to their original owner.

The news came shortly after metaverse firm The Sandbox suffered a data breach on Feb. 26, resulting in a phishing email sent to users.

The latest phishing attack against Trezor customers is not the first scam of such kind. Trezor wallets were also targeted with phishing attacks in April 2022, with attackers contacting Trezor users posing as the company, asking them to download a fake Trezor app.

Such attacks are not exclusive to Trezor, though. In 2020, rival hardware wallet firm Ledger suffered a massive data breach, with attackers publicly exposing the personal information of more than 270,000 Ledger customers.

Trezor to produce chips for hardware wallets to shorten supply cycle

Trezor wants to respond quickly to demand-triggering events like the FTX collapse by taking control of wallet chip production.

Hardware wallet manufacturer Trezor is accelerating the production of new Trezor wallets by producing its own wallet silicon chips.

Trezor officially announced on Feb. 27 that the firm would start facilitating the production of its key component, the chip wrapper, in its flagship product — the Trezor Model T.

The move aims to significantly optimize Trezor wallets’ production, reducing lead times in the supply cycle from two years to several months.

The optimization will also eliminate delays in shipping finished products and protect consumers from exposure to price fluctuations based on component supply and demand, Trezor said. As previously reported, demand for Trezor wallets spiked by at least 300% after the FTX collapse in November 2022, as crypto investors rushed to move their crypto holdings from centralized crypto exchanges.

Before becoming a wallet chip producer, Trezor was exposed to third-party supply vulnerabilities due to factors like geopolitical disruption, labor shortages due to COVID-19, crypto market conditions and other events. By taking control of the wallet chip supply, Trezor can respond quickly to all these factors and meet the demand at all times.

“By unpacking the process, identifying areas where we could take control, and collaborating with our partner STMicroelectronics in new ways, we’ve managed to make the manufacturing as agile as it can be,” chief financial officer Štěpán Uherik said.

The new business model also enables more design freedom for Trezor’s future products, allowing the wallet provider to build the hardware wallet devices from scratch.

The news comes a year after Tropic Square, a startup operated by Trezor’s parent firm Satoshi Labs, launched a new open-source chip called TROPIC01. The chip provides cryptographic key generation, encryption, signing and authenticating users through digital identification methods. Trezor was reportedly expected to become the first customer of Tropic Square for the product.

“The chosen business model is very unique and can be applied in exceptional cases. Firstly, as a manufacturer, we require high minimum order quantities, and secondly, the customer must have specific know-how to encapsulate semiconductor components,” STMicroelectronics sales manager Tomáš Pokorný said.

Trezor originally announced plans to take control of wallet chip production in collaboration with Tropic Square in May 2020, citing a wide number of reasons for such a move, including expensive chip vendor certification from the government. According to Trezor, state certification policies “exclude independent companies and open-source initiatives from being used in professional areas.”

1inch launches proprietary hardware wallet as self-custody trend grows

1inch Networks’ upcoming hardware wallet has no direct connection to the internet and doesn’t require any wired connection.

Decentralized exchange (DEX) aggregator 1inch Network is the latest cryptocurrency platform to move into the hardware wallet industry amid the rise of self-custody.

On Jan. 19, 1inch officially introduced the 1inch Hardware Wallet, a proprietary hardware wallet developed by an independent team working within the 1inch Network.

In order to provide maximum security, the 1inch Hardware Wallet is “fully air-gapped,” meaning that it has no direct connection to the internet and does not require any wired connection.

“All data is exchanged using QR codes or, optionally, with NFC,” 1inch said, noting that the 1inch Hardware Wallet also doesn’t have any buttons.

The upcoming hardware wallet comes in the size of a bank card, featuring a 2.7-inch E-Ink grayscale touch display. The waterproof crypto wallet is equipped with a damage-resistant Gorilla Glass 6 surface and stainless-steel frame. The device supports wireless charging, with the Li-Po battery designed to last for roughly two weeks of use.

One of the specific features of the 1inch Hardware Wallet is that it replicates the design of the Apple product line. The wallet comes in five colors, including hex, graphite, sierra blue, silver and alpine green, matching the iPhone 13 lineup.

“There will be two limited editions in pink and gold with some design changes and corresponding NFTs,” a spokesperson for 1inch told Cointelegraph.

The 1inch Hardware Wallet’s projected designs at launch. Source: 1inch Network

1inch is not the only crypto firm promoting its hardware wallet in an attempt to benefit from Apple’s popularity. Last year, French hardware wallet provider Ledger announced a collaboration with Tony Fadell, the inventor of the iconic iPod Classic model, to develop its latest crypto wallet, Ledger Stax.

According to a spokesperson at 1inch, the firm started the development of the hardware wallet in early 2022 and expects to launch the product in Q4 2023. The firm also plans to proceed with development and security enhancements in the near future.

“Next month, we will be launching the contributor program, so everyone will have an opportunity to improve the device truly on their own,” a 1inch representative said, adding that documentation and source codes will be available on GitHub.

1inch’s entry into the hardware wallet industry comes amid the rise of self-custody amid the distrust of centralized crypto exchanges (CEX). Major hardware wallet providers like Ledger and Trezor recorded a significant surge in traffic and sales as crypto investors were triggered to offload their holdings from CEXs amid the FTX collapse in November 2022.

Bitcoin price not more important than financial independence: Trezor CEO

As Bitcoin briefly crossed above $19,000, Trezor’s new CEO, Matěj Žák, said there’s something more important than its price.

Amid Bitcoin (BTC) seeing a significant price increase so far in 2023, one industry executive stressed that some features of Bitcoin are far more crucial than its price.

Matěj Žák, the newly appointed CEO of crypto hardware firm Trezor, believes that Bitcoin-enabled financial independence is the top benefit of the cryptocurrency and is more important than its market price.

“The year 2023 will be marked by a consolidation of the market and for us,” Žák said in an interview with Cointelegraph, adding that now Trezor has an excellent opportunity to improve its products to prepare for the upcoming bull market.

Bitcoin’s ease of use is one of the primary directions Trezor will continue to focus on this year, as BTC and crypto are still often seen as complicated technical concepts, noted the CEO. “It’s our mission to make self-custody even more accessible for ordinary users,” he added.

Contrary to popular belief, Bitcoin is not a complicated tool but rather a “simple technology with huge potential,” according to Žák. That is because Bitcoin has unlocked unique features that could enable competition with rigid traditional financial systems, Trezor’s CEO said, adding:

“When you understand it in its broadest context, enabling financial self-sovereignty, for example, the price of Bitcoin becomes a secondary consideration. Philosophically this is where I am at.”

The news comes amid Bitcoin seeing solid gains over the past two weeks, returning to levels preceding the collapse of the FTX exchange in early November 2022. Since the beginning of 2023, Bitcoin has surged 14%, briefly hitting $19,000 on Jan. 13. At the time of writing, Bitcoin is trading at $18,900, up 3.6% over the past 24 hours, according to data from CoinGecko.

Trezor is one of few companies that benefited from the FTX collapse and the associated crisis of centralized crypto exchanges, reporting a 300% surge in sales by mid-November 2022. In January, the firm appointed Žák as the new CEO, taking over Trezor co-founder Marek Palatinus. The former CEO will remain at the company as an adviser to help guide the strategic and technical direction of the firm.

Multiparty computation could offer increased protection for crypto wallets

Multiparty computation can help users to protect their private keys and seed phrases when used in wallets.

Multiparty computation (MPC) is a type of cryptographic protocol that allows multiple parties to jointly compute a function over their inputs without revealing those inputs to each other.

MPC can be useful when parties want to compute some function together but want to keep their inputs private from others. For example, a group of banks may want to determine the total amount of money in their joint account without revealing their account balances to each other.

In MPC, each party has a secret input that they keep to themselves. The process is done by carefully encrypting the inputs and performing the computation on the encrypted values so that the final result is the desired function, all while keeping the values secure.

MPC protocols typically involve multiple rounds of communication between parties exchanging encrypted messages and performing various computations on their own inputs.

MPC is a complex and technical topic, and there are many variations and approaches to implementing MPC protocols. Some key challenges in designing MPC protocols include ensuring that the protocol is secure against various attacks, such as malicious parties trying to learn other parties’ inputs, and ensuring that the protocol is efficient with regard to computational resources and communication costs.

What is a multiparty computation crypto wallet?

A multiparty computation crypto wallet is a crypto wallet that uses MPC technology to manage and store users’ assets securely. In an MPC crypto wallet, the private keys used to access and manage the users’ cryptocurrency are split into multiple parts, known as “shares,” which are distributed among the parties involved in the MPC protocol.

The key advantage of using MPC in a crypto wallet is that it allows the users to securely manage their cryptocurrency without any single party having access to the entire private key. This can help protect against various attacks, such as hackers attempting to steal users’ cryptocurrency by compromising a single party’s private key share.

Recent: Remote work could redefine the global workforce for good

MPC crypto wallets typically use a combination of cryptography and secure communication protocols to enable different parties to jointly manage users’ cryptocurrency. The process can involve complex calculations and communication between the parties, but the result is a secure and efficient way to manage users’ cryptocurrency assets.

Crypto wallets like ZenGo use multiparty computation to improve wallet security, and Coinbase has the feature enabled for their noncustodial wallet. As a result, MPC crypto wallets can provide increased security and protection against certain attacks. Still, they also require more computational resources than other crypto wallets.

Benefits and drawbacks of multiparty computation crypto wallets

The main advantage of an MPC crypto wallet is that it can provide increased security for users’ cryptocurrency assets by splitting the private keys used to access and manage the cryptocurrency into multiple parts and distributing those parts among different parties.

Tal Be’ery, co-founder and chief technology officer at crypto wallet ZenGo, told Cointelegraph, “MPC solves cryptocurrency’s most pressing problem: The single point of failure (SPOF) of the private key. This SPOF is the main reason users lose their funds: Whether by misplacing their private key, having their private key stolen, or accidentally sharing their seed phrase through a phishing scam.” He continued:

“With MPC, the indivisible private key is replaced by multiple distributed secrets often called ‘shares,’ such that a quorum of these shares can distributively sign a message — without creating a private key.”

Be’ery mentioned how separating the pieces of the private key and storing them in different locations makes it more difficult for malicious actors to compromise a user’s wallet.

“If each of these shares is held in an orthogonal place (e.g., mobile device and a server), then it makes it orders of magnitude more complicated for hackers to steal, as the attacker would need to steal from multiple independent places in different ways,” Be’ery said.

“This type of architecture also solves the dilemma discussed above: Creating copies of shares as a backup against loss is much easier, as no one share represents the ‘the and only’ private key,” he added.

Parth Choudhary, founder and CEO of Glip — a Web3 gaming and wallet application — also told Cointelegraph, “MPC could make it so that a wallet provider can’t get to a user’s money or control it. It may also make it harder for hackers and other bad people to steal private keys.”

MPC cryptocurrency wallets have some advantages over traditional wallets. MPC wallets are more reliable since they can ensure that a user’s assets are still accessible, even if one or more parties become unavailable or unresponsive. Privacy is also improved because the private keys are split into multiple shares and distributed among different parties.

By preventing any single party from discovering the user’s complete private key, the user has a reduced chance of losing their funds. Security is also improved since the computations are carried out on encrypted outputs, preventing malicious parties from learning sensitive information.

However, there are also some potential disadvantages to using an MPC crypto wallet. One of these disadvantages is the complexity associated with MPC protocols, especially for non-experts in cryptography. So, an MPC wallet can be more challenging to set up for the average person.

Recent: Crypto layoffs mount as exchanges continue to be ravaged by the prevailing bear market

Additionally, due to the computational resources needed by MPC protocols, they may be slower to operate. In this regard, an MPC wallet may be less efficient than other crypto wallets. Finally, not all cryptocurrency assets can be managed using an MPC crypto wallet, and some assets may be difficult or impractical to manage using MPC.

Wallet security has always been important for anybody who uses cryptocurrency, and the need for self-custody has become all the more apparent with the collapse of several high profile cryptocurrency firms and the loss of millions in user funds.

The decision to use an MPC crypto wallet will depend on the specific needs and requirements of the user. For example, it may be useful for users who prioritize security and privacy, but some people may prefer a more simple solution.

Ledger hardware wallet adds DeFi tracking feature

The Ledger Live app, which pairs with Ledger hardware wallets, integrated a new DeFi tracking feature to monitor performance analytics of over 1,000 protocols.

Users and developers are seeking out ways to stay both safe and informed after a year of volatility and uncertainty. During this shift, the hardware wallet developer Ledger announced a new integration for users to track the value of their assets.

Ledger and Merlin, a decentralized finance (DeFi) portfolio tracker, announced their new partnership on Dec. 13 to bring live DeFi performance analytics to Ledger Live users. The app, which connects to Ledger’s cold storage wallets, services over 5 million users.

The newly integrated DeFi tracker connects over 1,000 DeFi protocols across ten blockchain networks. Users will have access to performance metrics and profits and losses reports, along with aggregated reports of gas spent and calculated yields.

Elie Azzi, co-founder and chief product officer of Merlin by VALK, told Cointelegraph how this compiled data helps investors better navigate everything at their disposal:

“It is a challenge for them to compile all their trading data without connecting to each individual platform, multiple times, which can expose them to risk.”

Azzi continued to say that the major hacks and scandals of the last year have shown us that the crypto space has been compromised from its initial decentralization.

As the space picks itself up, both users and companies are looking to reinstate decentralization with transparency as building blocks:

“There has never been a stronger argument for DeFi, and for open, transparent and trustless solutions, upon which crypto has always been fundamentally built.”

Additionally, the new feature from Merlin will allow investors to claim liquidity provider fees and rewards straight from the interface without the need to exit the platform.

Jean-François Rochet, the vice president of international development at Ledger, said all of these new integrations help streamline the user experience.

After the collapse of FTX, many users in the crypto space began looking toward hardware wallets as part of their strategy to keep their assets more secure. Trezor, a hardware wallet provider, reported a 300% surge in sales revenue after the incident.

Many major players in the space, such as Binance CEO Changpeng “CZ” Zhao and Ethereum co-founder Vitalik Buterin, encouraged self-custody over the last month.

Binance Labs also made a strategic investment in a hardware wallet firm and looks to lead its upcoming Series A funding round.

How do crypto hardware wallet firms make money?

All the companies that are involved in producing hardware crypto wallets have multiple revenue streams, either directly or indirectly.

The hardware wallet industry has emerged as one of the most resilient sectors to the ongoing cryptocurrency winter, with issues like the FTX crash bringing in even more cold wallet sales.

The bear market of 2022 has once again reminded crypto investors of the importance of self-custody and independence from centralized exchanges (CEX).

As a result, some major CEXs like Binance has increased their investment exposure to hard wallet firms, while CEO Changpeng Zhao even suggested that CEXs may no longer be necessary in the future. Should it be the case, the crypto industry of the future will be quite unlike the existing one because the business model of hardware wallets is very different from that of CEXs.

One massive difference is how hardware wallets make money because — unlike CEXs — cold wallets don’t charge any fees for most transactions by design. But selling devices cannot be the sole revenue stream for cold wallet manufacturers due to a number of reasons, including that hardware wallets are durable devices that don’t often need upgrades.

So, how do hardware wallet manufacturers actually make money? Cointelegraph reached out to several cold wallet providers to discuss the issue to better understand their business model.

How long does a hardware wallet last?

There is no clear answer on how long a hardware cryptocurrency wallet is able to last, partly because the world’s first-ever cold wallets are still working properly.

Czech Republic-based hardware wallet firm Trezor was the first company in the world to officially release a cold wallet back in 2014. After eight years, the Trezor One model is still one of the most popular hard wallet devices, with many customers still using their first generation of Trezor devices, Trezor brand ambassador Josef Tetek told Cointelegraph.

“Trezor devices come with a two-year warranty. However, that doesn’t mean the devices break down after two years,” Tetek said, adding:

“At conferences we regularly meet users who still use the first edition from 2013. In general Trezor devices are very durable and the fault rate is minimal.”

The exec emphasized that users can break, lose or damage their devices, but they will keep their Bitcoin (BTC) if they keep their recovery seed backup intact.

According to Ledger, another major cold wallet provider, the lifespan of a cold wallet is “really long,” but is not something that the firm can estimate. “Devices are designed to last. Sometimes issues come up as with every product, but people should be able to bury them,” a spokesperson for the firm told Cointelegraph.

According to some hardware wallet providers, card-based cold wallets can last for dozens of years or never expire at all.

Recent: Into the storm: The murky world of cryptocurrency mixers

Andrey Kurennykh, CEO at the SBI-backed cold wallet firm Tangem, suggested that their card-like hardware wallet has the same lifespan as the underlying Samsung S3D350A secure element. “Samsung claims that they have a lifespan of more than 25 years. Since there are no other hardware components in Tangem wallets, we consider this to be the lifespan of the whole device,” Kurennykh said in an interview with Cointelegraph.

Adam Lowe, creator of another cold wallet company Arculus, also told Cointelegraph that the company’s card-like cold storage device “never expires.”

As hardware wallets might never require a user to upgrade the device, how do cold wallet firms keep running operations, given that such companies have to spend significant resources to provide long-time support for their customers?

Increasing demand for hardware wallets

Many hardware wallet providers have been forced to expand their support staff in order to meet increasing demand for cold wallet devices.

“We have significantly scaled up our support team, which has been important to us considering recent events in the crypto industry and the increase in people moving to self-custody,” the Ledger spokesperson said.

“We’re seeing a large influx of people new to crypto from different channels and geographies, and we’re strengthening support proportionally,” Tangem’s Kurennykh noted.

A number of wallets have also introduced new support solutions including self-help tools and chat bots, allowing them to more easily handle frequently recurring requests like implementing an e-commerce API. “This helps to handle unexpected surges in inquiries such as that experienced in the recent FTX collapse,” Trezor’s Tetek said, adding that the firm has also been actively adding videos on solving the most common issues and difficulties.

Cold wallets’ multiple revenue streams

All the companies that are involved in manufacturing hardware crypto wallets have multiple revenue streams, either directly or indirectly, according to comments from industry executives.

“Ledger isn’t just a hardware company, we’re a software company as well with Ledger Live,” a representative said, adding that its revenue comes from not only selling Ledger devices but also through services on Ledger Live.

The firm also offers its own nonfungible token platform known as Ledger Market, business-to-business (B2B) products tool called Ledger Enterprise and others, the spokesperson noted.

Ledger has also been actively expanding its devices, launching a total of seven different cold wallets since 2014. Ledger’s latest wallet, developed in collaboration with iPod Classic creator Tony Fadell, is priced at $279, which is $200 higher than the cost of the previous Ledger wallet.

Rival firm Trezor doesn’t offer any financial services and doesn’t levy any fees on using its Trezor Suite app, Tetek said. At the same time, its sister firm, Invity, enables Trezor users to buy and sell Bitcoin (BTC) and other crypto currencies directly from the Trezor Suite, he said, stressing that the firm is a separate business from Trezor.

According to Tangem’s Kurennykh, the firm has several revenue streams, with as much as 70% of the company’s revenue coming from hardware wallet sales. About 20% of revenues come from third-party services fees like on-ramp and off-ramp exchanges, while 10% is generated through white-label wallet sales, Kurennykh said. The company is also working on its own non-custodial payment solution, which is expected to make another additional revenue stream.

Ruben Merre, co-founder and CEO at Binance-backed crypto wallet Ngrave, also told Cointelegraph that the firm’s revenue is mostly generated from product sales. However, there are areas for additional revenue streams, including a transaction fee for a fiat-crypto onramp. “The user can then buy crypto directly from the hardware wallet app […] The hardware wallet manufacturer may charge a transaction fee for this process,” Merre said.

Additionally, a number of cold wallets also participate in affiliate or promotion programs in cooperation with crypto services and exchanges.

There’s no public hard wallet company yet

As none of the existing hardware wallet companies are public, there is no readily available data on the revenues coming from their business. All the hardware wallet firms interviewed by Cointelegraph declined to provide any figures related to their financial information, citing their status as a private company.

At the same time, the executives reiterated that the collapse of the FTX exchange in November has driven massive sales and traffic to hardware wallet platforms.

In November, Ledger doubled its transaction revenue through Ledger Live month-over-month, also recording an all-time-high in number of trades through Ledger Live, the spokesperson said. “We had our best sales month ever in November, with our two best sales days ever on Nov. 13 and Nov. 14, following FTX,” the representative added.

“We can say that we have sold over 1 million devices, and we are experiencing record sales after the recent FTX collapse,” Trezor’s Tetek also noted.

As previously reported by Cointelegraph, the hardware wallet industry had been estimated to grow at a faster pace than exchanges, even before the FTX crash. But despite self-custody being one of the genuine purposes of crypto, investors should still be aware of the risks associated with storing coins by themselves.