Avalanche Wallet Essentials

| February 12, 2024

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A crypto wallet serves as a pivotal component in the domain of cryptocurrency, serving as either a software program or a physical device designed to safeguard the public and private keys associated with a user’s cryptocurrency account. These keys are crucial for executing transactions on the blockchain. Beyond the fundamental function of facilitating cryptocurrency transfers, crypto wallets such as polygon or avalanche blockchain wallet can extend their utility to enable various additional features, such as accessing decentralized applications (dApps). While it is a common misconception that these wallets “store” cryptocurrency, the truth is that the digital assets always reside on the blockchain. 

Instead, the wallet provides users with a secure and convenient means of managing their private keys and engaging in crypto-related activities. Although it is technically possible to conduct crypto transactions without a wallet such as avalanche wallet, dedicated enthusiasts often find these tools indispensable. This guide aims to assist users, especially those beyond the beginner level, in navigating the diverse landscape of crypto wallets, offering insights into different types and their functionalities. To enhance your understanding, we’ve crafted a concise how-to guide that explains fundamental wallet concepts and guides you through the process of setting up your own crypto wallet compatible with the Avalanche network.

Key takeaways:

  • An Avalanche wallet is a dedicated storage solution for cryptocurrencies on the Avalanche network, with AVAX being the primary native coin.
  • Avalanche competes with Ethereum, emphasizing scalability and transaction speed, where AVAX serves to secure the blockchain and cover transaction fees throughout the network.

Deep dive into AVAX wallets

Avalanche emerges as a dynamic and secure platform, designed for the swift development of blockchains and decentralized applications (dApps). Its innovative consensus mechanism and Subnet architecture contribute to robust scalability, high throughput, and efficient transaction processing. At the forefront of staking solutions within the Avalanche ecosystem are Core and Liminal—a crypto wallet and portfolio dashboard seamlessly traversing Avalanche, along with major chains like Bitcoin and Ethereum. 

Staking with AVAX wallet not only streamlines the process for token holders, eliminating intermediaries, but also allows users to tailor the staking experience to their specific preferences. Before diving into our comprehensive guide on staking with crypto wallet on Avalanche, it’s beneficial to grasp the network’s primary chains or Subnets. 

The P-Chain oversees validators and custom Subnets, the X-Chain serves as the default asset blockchain facilitating asset creation and exchange, while the C-Chain, an Ethereum Virtual Machine-compatible chain, supports the development of smart contracts and dApps. Hereafter, we guide you through the straightforward steps to effortlessly stake AVAX using Liminal and Core wallet avalanche.

Institutional AVAX Wallets

For those seeking entry into the Avalanche network, a variety of software wallet choices await. Among the extensively utilized Avalanche AVAX wallet are:

Core

Core: Unveiled in the year 2022, Core stands as a non-custodial marvel, evolving into a comprehensive Web3 command center. Beyond the realm of facilitating AVAX, Avalanche’s native coin trading, Core unfolds a tapestry of user-friendly functionalities. Picture an address book offering seamless accessibility, a portfolio display rendering a panoramic view of all your stored crypto assets, and a bridge facilitating the fluid transfer of Bitcoin and Ethereum tokens. Enter the collectibles gallery, an elegant space for the curation and management of NFTs.

Moreover, Core wallet avalanche seamlessly integrates with Ledger, the widely acclaimed hardware wallet for the crypto domain. This all-encompassing tool comes without any financial burden, being entirely free of charge. A simple installation awaits you on the canvas of your Google Chrome browser, offering a gateway to explore the vast expanse of Core’s capabilities.

Whether you opt to glean more insights from the official Core wallet avalanche website or embark on a direct download through the Chrome Web Store, the process is a breeze. Dive into Core’s ecosystem, effortlessly create your avalanche AVAX wallet, and embark on a journey of sending and receiving crypto assets with utmost ease.

Avalanche Wallet

The Avalanche Wallet, a straightforward non-custodial solution tailored for the Avalanche network, stands as the original “official” AVAX wallet with a longstanding presence in the crypto landscape. While it may lack the advanced features found in Liminal or Core, it continues to enjoy widespread usage, particularly as a reliable choice for those in search of a crypto DeFi wallet. To embark on setting up this wallet, ensure you’re prepared to jot down the 24-word key phrase crucial for accessing your account. 

The process unfolds as follows:

  1. Begin your journey at wallet.avax.network
  2. Initiate the wallet creation by selecting “Create New Wallet” and then proceed to “Generate Key Phrase.”
  3. Confirm your preparedness by checking the box indicating you’ve noted down your key phrase, followed by clicking “Access Wallet.”
  4. As a pop-up prompts you, input your key phrase and verify by pressing “Verify.”
  5. Finally, press “Access Wallet” to complete the setup.

For a visual walkthrough of the process, a step-by-step video guide on Creating a New Wallet with the Avalanche Wallet is available. Additionally, you may find our video on How to Send AVAX from an Exchange to the Avalanche Wallet helpful in navigating further functionalities.

Metamask

MetaMask stands out as a widely embraced software wallet, seamlessly transitioning between a mobile application and a browser extension for user convenience. Originally conceived as an Ethereum crypto wallet app, MetaMask has expanded its horizons to encompass the Avalanche platform, thanks to its EVM compatibility. Offering flexibility, MetaMask is available for download on browsers such as Chrome, Firefox, Brave, and Edge, in addition to being accessible on both iOS and Android platforms.

Upon installation, users can delve into the intricacies of connecting Avalanche to MetaMask by referring to our instructional video. Regardless of your preferred wallet, taking the time to familiarize yourself with its features is a prudent practice. For further guidance, a repository of how-to articles on the Avalanche website awaits exploration, providing additional insights into navigating the platform with a software wallet.

Avalanche’s Three Chains and Their Significance

Immersed in the dynamic architecture of the Avalanche network are three distinct blockchains, each playing a unique and crucial role: the Exchange Chain (X-Chain), the Contract Chain (C-Chain), and the Platform Chain (P-Chain). It’s paramount to grasp that MetaMask compatibility exclusively extends to the C-Chain, making it the sole conduit for transferring AVAX to your MetaMask wallet. A word of caution resonates – a misstep in selecting the wrong chain could potentially result in the loss of your tokens.

Diving into the nuanced functionalities, the ‘X’ chain emerges as the transactional heartbeat, distinguished for its remarkable speed and cost-effectiveness in stark comparison to Ethereum. The ‘P’ chain, on the other hand, assumes the mantle of the platform chain, serving as the nexus for staking and validation endeavors. Meanwhile, the ‘C’ chain takes on the role of the contract chain, providing a gateway for seamless interaction with the diverse array of decentralized applications (dApps) proliferating within the Avalanche ecosystem. This intricate interplay of chains underscores the importance of discerning their individual roles, ensuring a nuanced understanding of the Avalanche network’s multifaceted dynamics.

Staking setup

Setting up staking with Liminal or Core Avalanche wallet involves a comprehensive process to ensure a secure and user-friendly experience.

Step 1: Setting Up 

Before initiating the staking process, users must install the wallet extension on their Google Chrome web browser. For an added layer of security, connecting a Ledger hardware wallet is recommended. It is imperative for users to confirm they possess the minimum required quantity of AVAX to participate in staking, which currently stands at 25 AVAX for delegation and 2,000 AVAX for validation. 

Step 2: Delegating 

The delegation process using AVAX wallet is efficient and straightforward. Once the wallet extension is connected, navigate to Stake and access the Delegate panel. A prompt to “Learn More” is available, linking to additional information from the Avalanche team. Click “Get Started” to initiate the delegation process.

Delegating requires AVAX to be present on the P-Chain. If not, users have options to transfer AVAX from other chains or purchase them. Based on available AVAX, users can select the quantity to delegate and proceed by clicking “Next.” The wallet then presents staking duration options, accompanied by an informative graph illustrating estimated rewards for each duration. Users can choose from predefined durations ranging from one day to one year or set a custom end date.

Subsequently, users select the node for AVAX delegation, considering the fees charged by validators listed as percentages. Node selection can be filtered based on specific criteria or searched across multiple parameters. After choosing a node, click “Select” and then “Next.”

To conclude the process, input a wallet address for staking rewards, review the delegation summary and selections, and click “Submit Delegation.” Following completion, users approve the transaction on the avalanche blockchain wallet extension and can monitor transaction details on Subnet Explorer. This comprehensive approach ensures a secure and informed journey through the staking setup process.

Validation Process for AVAX Holders

For AVAX holders seeking to enhance their participation as validators, the journey involves more than just configuring the wallet extension, as outlined in the delegation process. In addition, it is imperative to have a previously established node, a step achievable either manually or by utilizing an installation script generously provided by the Ava Labs development team.

Armed with the avax wallet extension seamlessly integrated with avax wallet web and a pre-set node in place, users effortlessly navigate to the Stake system and dive into the “Validate” panel. Similar to the delegation process, possessing AVAX on the P-Chain is a prerequisite for validation. For those lacking sufficient AVAX on the P-Chain, options to transfer or purchase tokens become available, ensuring a flexible approach to completing the validation process.

Proceeding from this juncture, the validation process shares similarities with delegation. Users specify the amount of AVAX for validation, opt for either a pre-set or custom staking duration, and provide a node ID to stake their AVAX. Crucially, users confirm a wallet address designated for receiving staking rewards.

A distinguishing feature for validators, compared to delegators, lies in the ability to set a delegation fee for potential future contributors. Validators can select a fee ranging from 2% to 100%, adding a layer of customization to their staking approach.

Concluding the validation process involves users confirming transaction details, validating the transaction on the wallet extension, and monitoring transaction information through the Subnet Explorer. This pivotal point marks the node’s availability for other users to delegate, while validators gain insights into delegator counts, stakes, and other pertinent data.

For an even more comprehensive guide, a detailed support article is available for reference, ensuring AVAX holders navigate the validation process with clarity and confidence.

Conclusion

In conclusion, avalanche AVAX wallet stands out as the preeminent staking platform for Avalanche, delivering a seamless and efficient experience that fosters customization without intermediary intervention. This platform empowers users with the ability to engage in self-directed, self-custodial staking, enabling direct delegation to the protocol. The Avalanche AVAX wallet thus epitomizes a user-centric approach to staking on the Avalanche network, enhancing accessibility and autonomy in the staking process.

More on Crypto

As we continue constructing a fully regulated digital asset custody platform, ensuring secure storage for both crypto and fiat assets remains a critical priority. 

To facilitate the last checkpoint of enabling institutions to convert their digital asset treasury into fiat currency, we’re expanding beyond pure wallet infrastructure and integrating seamless fiat off-ramp capabilities for our partners.

We’re thrilled to announce our partnership with Encryptus, licensed and compliant off-ramp solutions tailored for institutional clients. This collaboration elevates Liminal’s service offerings by empowering our partners to convert their digital asset treasuries into fiat currencies efficiently.

Integrating A Seamless Off-Ramp Solution

The digital asset ecosystem historically faced friction points when transitioning between fiat and cryptocurrencies. Off-ramp solutions address this pain point by enabling efficient and streamlined conversion between asset classes, minimising value loss and simplifying compliance processes.

Here’s how off-ramp changes the game:

  • Reduced Friction: Frictionless conversion minimises delays and operational complexities associated with traditional fiat-crypto exchange methods.
  • Enhanced Efficiency: Streamlined workflows expedite asset conversion, increasing speed and cost-effectiveness for institutional and individual users.
  • Optimised Value Preservation: Advanced off-ramp solutions prioritise minimising price slippage and value loss during conversion, protecting user portfolios.
  • Simplified Compliance: Integrated compliance features navigate regulatory complexities, ensuring adherence to relevant financial regulations.

With our partnership with Encryptus, we have embedded their institutional-grade APIs, connecting their off-ramp solution within Liminal’s wallet and custody platform. 

This integration simplifies our clients’ liquidation requirements while keeping their assets secure and more:

  • Effortless Digital Asset to Fiat Conversion: Our partners will be able to access treasury management and facilitate business payments in 54 countries and individual payments in an extensive network of 80+ countries.
  • Streamlined Compliance and Regulation: Our partners will be able to leverage Encryptus’s rigorous licensing and compliance framework, ensuring adherence to stringent financial regulations.
  • Enhanced Platform Value: We will be able to expand the functionality of the Liminal custody solution, attracting institutional users seeking comprehensive digital asset management capabilities.

Moving Towards A Robust Off-Ramp Partnership With Encryptus

The partnership between Liminal and Encryptus earmarks a significant step forward in secure digital asset custody, representing a shared commitment to pushing compliant practices while supplying institutions with easy access to convert their digital assets to fiat. 

For Encryptus, the opportunity to integrate with Liminal’s established platform presents a chance to reach a wider audience and scale their innovative off-ramp solutions to new heights. By streamlining fiat conversion within Liminal’s secure custody infrastructure, Encryptus gains access to a trusted network of institutional users seeking seamless and compliant treasury management.

For Liminal, this collaboration reinforces our dedication to partnering with companies that demonstrably prioritise clear governance and robust policy frameworks. By aligning with Encryptus’s stringent compliance standards, we reaffirm our commitment to building a secure and sustainable future for digital assets, where trust and regulatory certainty go hand-in-hand.

January 22, 2024

Hello world, it’s that time of the month when we share the biggest security breaches in the world of Web3 through our Security and Regulatory Newsletter. 

Liminal believes in optimizing security and custody practices globally across the Web3 industry. Through our Newsletter, we highlight security, regulations, and compliance incidents that have happened in the past month and how one can follow better Security practices to safeguard their digital assets. 

We will also highlight regulatory changes that might have happened globally, which were significant to the overall ecosystem.

Dive in and get a detailed analysis of everything security and regulation in the domain of web3 with Liminal’s Monthly Security and Regulatory Newsletter.

Web3 Security Compromises in January

Abracadabra exploited for almost $6.5 million, Magic Internet Money stablecoin depegs

The Magic Internet Money ($MIM) stablecoin has lost its dollar peg again, dipping all the way below $0.77 in a flash crash before returning to around $0.95.

The depeg appears to be related to an exploit of the Abracadabra lending protocol, which allows people to borrow $MIM. An attacker exploited an apparent flaw in the platform’s smart contracts to drain around $6.5 million.

Goledo Finance hacked for $1.7 million

Goledo Finance, an Aave-based lending protocol, was exploited through a flash loan attack. The attacker stole assets estimated by CertiK to be around $1.7 million.

Goledo Finance contacted the attacker to offer a 10% “bounty” for the return of the remaining assets. In a message on January 29, the attacker wrote: “I hacked Goledo and want to negotiate.”

Socket service and its Bungee bridge suffer $3.3 million theft

The Socket cross-chain infrastructure protocol was hacked for around $3.3 million in an attack that exploited its Bungee bridge. The thieves were able to exploit a bug that allowed them to take assets from those who had approved a portion of the system called SocketGateway.

A little over 700 victims were affected, and the highest loss from a single wallet was around $657,000. 121 wallets lost assets priced at more than $10,000.

On January 23, the protocol announced they had recovered 1,032 ETH (~$2.23 million) of the stolen funds.

Web3 Regulatory Practices for January

The EU Imposes Stricter Due Diligence Rules for Crypto Firms

On Jan. 17, the European Council and the Parliament came to a provisional agreement on parts of the Anti-Money Laundering Regulation (AMLR) that now extends to the crypto sector.

Under the new rules, cryptocurrency firms will be required to run due diligence on their customers involving a transaction amounting to €1,000 ($1,090) or more. 

However, the agreement isn’t final yet as it has to be first officially adopted by the Council and Parliament before the rules can be applied.

So, after the EU passed its landmark MiCA regulation last year, which clarified rules about cryptocurrencies, regulators are now targeting the space with tighter controls. 

While these regulations bolster security and trust in the crypto market, potentially attracting more cautious investors and combating financial crimes, they also present challenges. 

The US State of Virginia Introduces Digital Assets Mining Rights

Recently, the Virginia State Senate introduced Bill No. 339, which outlines regulations for the transactions and mining of digital assets and their treatment under tax laws. 

The legislation exempts individuals and businesses engaged in crypto mining activities from obtaining money transmitter licenses. Additionally, it protects miners from any discrimination. 

Issuers and sellers of crypto are also exempted from securities registration requirements if certain conditions are met. Moreover, those offering mining or staking services are not to be classified as “financial investment” but must file a notice to qualify for the exemption.

The bill further incentivizes crypto’s use for everyday transactions by offering tax benefits. Under this, up to $200 per transaction can be excluded from an individual’s net capital gains or gains derived from using crypto to purchase goods or services, starting from Jan. 1, 2024.

Key Takeaways:

  • Hackers continue to exploit vulnerabilities in DeFi protocols and cross-chain bridges, highlighting the need for robust security measures.
  • Regulatory frameworks are evolving rapidly, with stricter AML rules and supportive legislation for emerging technologies like crypto mining.
  • Staying informed about these developments is crucial for navigating the digital assets market safely and responsibly.

Stay #LiminalSecure

These events highlight the constant evolution of Web3 security and regulation. You can confidently navigate this dynamic landscape by staying informed and prioritizing security best practices. 

At Liminal, we’re committed to empowering institutions to unlock the full potential of digital assets without compromising security or compliance norms with our robust custody and wallet infrastructure solutions. Join us on this journey towards a safer, more accessible future for digital assets.

January 15, 2024

Buckle up as we’re about to take a trip down memory lane. 

The year 2023 was a wild ride that showed signs of a plummeting market, groundbreaking innovation and regulatory hurdles. 

Contrastingly, in the same year, we saw no market-shattering crashes. Financial institutions extending an olive branch, key jurisdictions unlocking the doors to blockchain technology. 

Simultaneously, at Liminal, we experienced significant breakthroughs, re-engineering our positioning and becoming a pioneer in digital asset security with bank-grade custody. 

We took major strides this year, right from building comprehensive products to becoming a qualified custodian, from revamping our brand design to expanding our offices in newer locations, from partnering with hyper-local communities to onboarding a diverse set of clients,  we did it all. 

So, let us take you through everything we accomplished in 2023 and what the future holds.  

Liminal Became A Qualified Custodian

One of the prominent moves we made this year was to change our positioning as a regulated custodian from being a wallet infrastructure platform. 

We got two licenses in key jurisdictions to operate as a regulated custodian. 

The first one came from Hong Kong, where we acquired the TCSP license issued by the SFC, which oversees and regulates financial activities to ensure compliance with legal and regulatory obligations. 

Our next license came in the MENA region, where we got In-Principle Approval for the FSP license granted by the FSRA, a governing body in ADGM, to establish a progressive financial services environment. 

Both these licenses paved the way for Liminal to push its wallet infrastructure and offer bank-grade custody to institutions looking to operate in these particular regions. 

Liminal Introduced A Suite of Products & Features

Continuing our building spree, we launched new products and integrations to broaden the existing infrastructure and added more parameters of security, scalability and sustainability. 

Staking-as-a-Service

Liminal launched staking for institutions to eliminate the risks involved in running staking nodes and the vulnerabilities in hot wallet transfer. 

Hence, we introduced an industry-first mechanism of cold wallet staking to ease staking for institutions and secure assets explicitly.  

Whitelabel Solution

Accelerating the go-to-market time for organisations looking to build a secure and customisable application, Liminal launched its whitelabel solutions

Targeted to help organisations meet security standards, manage assets with maximum control, and add their custom branding to give it a personal touch. Our whitelabel solution is a first-in-class custodian-developed solution for institutional grade custody.

Smart Consolidation

We are building not just secure custody but also automation-based features to eliminate manual errors, increase the throughput of transactions and scale institutional wallets. 

Taking this ahead, we launched the Smart Consolidation feature to automatically calculate all the active addresses and consolidate them into a single address. With this level of automation, managing multiple addresses becomes uber easy for wallet teams. 

Travel Rule 

To limit the use of cryptocurrencies for activities like money laundering and terror financing by regulatory bodies, travel rule was mandated for institutions to follow. 

Continuing the latest compliance integration policy, Liminal partnered with Notabene to introduce Travel Rule, enabling institutions to manage counter-party risk and extend the process of due diligence right from the Vaults dashboard.   

Liminal Accured List Of Security Certifications

Following our ISO certification for data privacy and risk management, we added two new security certifications to fortify our systems and build trust for our clients. 

Liminal Achieves Crypto’s Highest Security Mark: CCSS Level-3 Certified

Cryptocurrency security lacked a gold standard, creating a vulnerable ecosystem. Enter the CryptoCurrency Security Standard (CCSS), setting the bar for auditing and certifying custodian infrastructure and establishing levels of trust and confidence for investors. 

Liminal became only the second wallet infra platform and the first regulated custodian to be accredited with Level-3 certification, deeming wallets, transfer environments, workflows and engines safe and secure. 

Liminal Reciueved SOC 2 Type II Certification

To tackle threats in institutional-grade security, organisations’ SOC has been identified as the primitive compliance standard for service organisations to handle customer data.

Liminal successfully attained SOC 2 Type II certification, validating its setup of security controls & compliance processes to be industry standard. 

Liminal Level Up

Liminal unveiled its most significant platform upgrade ever, revolutionising the future design standard of a qualified custodian. This level-up activity included revamping our website and product UI, giving a completely new look and feel to not “Liminal” but “Liminal Custody”. 

The Liminal level-up activity was a strategic step and the biggest one for us this year to create an intuitive, inviting and tailored experience for our clients. 

Liminal Reached New Borders

We spread out our operations this year, reaching new borders and onboarding a new wave of institutions across gaming, DeFi, HNI wealth, treasuries, and exchanges! From Indonesia and Africa to India, UAE, and Korea, we are setting up custody operations worldwide. 

This isn’t just a roster of clients; it’s a network ready to spark connections, collaborations, and shared success to further the definition of secure assets. 

Liminal Collaborated With Law Enforcement Agencies

The best and the proudest moment of Liminal for this year was when we collaborated with CBI & Himachal Prashesh police department to aid them in seizing digital assets. 

This partnership put us on the map, as we became the first point of contact for LEAs in India, and we standardised the process of secure seizure of digital assets. Leveraging our expertise, we enabled a safe space for officers to learn the basics of custody, contributing to a safer digital landscape.

Team Liminal Grew Bigger

Building such a massive infrastructure, prioritising security and compliance over everything else, we had to grow the team to build at pace and expand at an even higher level. Not only did we grow in team numbers, but we also elongated our footprint to new destinations. 

Team Liminal went from 32 to 70 with 5 new offices in Mumbai, Ahmedabad, Hong Kong, Singapore and ADGM, setting up our custody operations steadfastly. 

What’s To Look Out For In 2024

We are excited to announce that our commitment to integrating the most secure digital asset wallets with a cutting-edge custody platform is swiftly becoming a reality. 

The upcoming year, 2024, will serve as a testament to this transformative journey. Moving beyond self-custody, we are constructing a comprehensive infrastructure encompassing both custodial and non-custodial wallets. Exciting products are set to launch starting from the first week of January, some of which are: 

  • Official Custody Platform Launch
  • Liminal’s Off-Exchange Settlement Hub
  • Secure Custody of Real-World ‘Tokenised’ Asset

The Web3 space has evolved explicitly this year, pushing the narrative of secure digital asset custody and security, introducing new regulations and compliance standards, licensing VASP providers and standardising the use of custodians as a trusted third party. 

At Liminal, we took major strides this year, from building comprehensive products to becoming a regulated custodian, from revamping our brand design to building the full infrastructure of custodial and non-custodial wallets.

January 5, 2024

Find Out How You Can Benefit From A Fully Self-Custodial Wallet Architecture