What Is Phantom Wallet?
Since its launch in 2021, Phantom has seen tremendous growth in terms of usage and development. Launched initially as a chrome extension, Phantom developers announced that they had recorded an excess of 500,000 active users within five months of its release. This number rose to over 2 million in the first quarter of 2022 and has continued to grow even faster following the release of the iOS application in February 2022 and the Android application later in April 2022.
Phantom wallet’s exponential growth is partly thanks to the widespread adoption of Solana blockchain but mainly due to its plausible user experience. It is unarguably the most popular wallet in the Solana ecosystem.
So, what is Phantom Wallet?
Phantom wallet is a Web3 wallet built for storing Solana-based crypto assets and designed to support decentralized applications built on the Solana blockchain. Phantom wallet features an array of infrastructures available for Solana blockchain users, this includes;
Asset Storage and Transaction
Phantom wallet offers an easy interface to the Solana blockchain and allows users to execute asset transfer transactions and also receive assets with ease.
Phantom wallet presents to users details of their assets held on the Solana blockchain. It keeps a store of users’ public and private keys and allows total access to only holders of these two keys, thus ensuring that users’ assets are as safe as they keep their keys.
DeFi and DApp Connectivity
Phantom wallet is developed to enable integration with decentralized applications built on Solana.
Phantom wallet users can connect to DeFi platforms and sign smart contract transactions initiated on the platforms from their personal wallets. Phantom wallet DApp interactivity algorithm packages complicated smart contract commands into simple prompts that can be easily signed by wallet owners.
NFT Storage, Transaction, and Burning
Phantom wallet users can receive and store NFT collectibles in their wallets.
Just like crypto assets, NFT owners can transfer their collectibles to their peers from the comfort of their wallets. A storage fee (rent) is paid to keep NFTs in Phantom wallet. Users can also purchase or sell the NFTs held in their Phantom wallets on NFT marketplaces with support for Solana-based NFTs.
A new feature launched on August 18, 2022, also allows users to burn unwanted NFTs in their wallets and receive some rewards in Solana (SOL) for destroying the NFT(s).
How To Set Up Phantom Wallet
Phantom desktop wallets can be downloaded as browser extensions. The extension is available for Chrome, Firefox, Brave, and Edge browsers. Visit Phantom’s website and click Download from the top right corner to see available download options. Choose your browser, download and install the extension and proceed to set up your wallet.
You can import your old wallet or create a new one. Follow the preceding prompts to set up your passwords, safely copy your 12 words security phrase, and complete the procedure.
How To Use Phantom Wallet
Phantom wallet’s interface makes it easier to grasp and perform core tasks. Users can navigate through the wallet features using the tabs at the bottom of the application. On the asset interface, you can click the “Deposit” or “Send” button to obtain your wallet address or set up a transfer transaction, respectively.
To add a custom token to your phantom wallet token list, Select “Manage Token List” and enter the required details to view the asset in your wallet.
Following the asset interface is the NFT interface. Here, you can view your NFTs, send them to peers or destroy them if not wanted.
The swap feature is a decentralized exchange interface that allows you to swap assets in your wallet. Phantom wallet’s swap platform is a decentralized exchange (DEX) aggregator. It collates exchange rates from multiple DEXes on Solana and offers users the best rate from these platforms.
To swap assets on the interface, select preferred pairs, check presented swap rates and complete the procedure if conditions are satisfactory.
To connect to decentralized applications or DeFi platforms using your phantom wallet, visit the project’s website from the browser where your Phantom wallet extension is installed. Click Connect wallet (usually at the top right corner) from the platform to complete the connection process.
Setting up Phantom wallet on Mobile
Phantom wallet is a sleek and light wallet application available for Android and iOS operating systems. The setup process is the same for mobile applications and desktop browser extensions.
The only unique feature of the mobile application is the in-built DApp browser. Select the globe icon from the bottom right corner of your wallet to access the DApp browser. Enter the project’s website in the indicated area to visit the platform and connect your wallet.
How Secure is Phantom Wallet?
Phantom wallet is a hot wallet optimized for routine transactions. It is developed to enable easy connection to the internet and Web3 platforms. At blockchain level, it is considered safe, but this is not always the case.
On August 3, 2022, several Solana mobile wallet users reported that their wallets had been compromised and their assets moved from their wallets without their consent. Affected wallets include Phantom Wallet, Slope wallet, and Solana accounts on Trustwallet. Post-mortem reports maintain that about 8,000 wallets had lost over $5 million total in SOL and other Solana-based tokens.
Contrary to initial speculations, Phantom wallet developers rebuffed the rumors that Phantom wallet’s security systems were jeopardized. According to them, parameters remain unaltered and possible causes were suggested to trace back to Slope wallet and wallets being imported into Phantom wallet from other wallet providers.
However, there’s still a risk when using hot wallets. Being connected to the internet, hackers can gain access to hot wallets through several means. While developers work towards improving the security of hot wallets, users are advised to apply caution and store only a fraction of their assets in hot wallets and the rest in cold wallets which are confirmed to be more secure.
Phantom wallet offers two vital services:
1) a portable means to send and receive Solana-based assets and NFTs;
2) a sleek connection to decentralized applications built on the Solana blockchain.
The smooth functionality gives users a refreshing experience and complements Solana’s superfast and budget-friendly blockchain technology.
Phantom wallet is built to interact with the internet and applications built on it, users can leverage this ability to explore Web3 opportunities like DeFi and yield farming. Phantom wallet is constantly being optimized for NFTs, existing features are NFT-friendly and new features are making NFTs more fun and encouraging users to embrace innovative Web3 technologies.
But just like blockchain technology itself, strategies to break hot wallet security are evolving and getting more sophisticated. Phantom wallet has some impressive security checks, but wallet owners play a huge role in ensuring the safety of their assets.
On this note, it is advised to employ wallet security tips, such as safekeeping of wallet passwords and passphrases and keeping wallet-installed devices away from public contact. Users should also be wary of storing large amounts of crypto assets in hot wallets. This will limit the severity of losses incurred in case of exploitation of hot wallet facilities.
Learn the 16 crypto security tips by CoinGecko’s co-founder so you can invest in peace!
Joel loves discussing cryptocurrency and blockchain technology. He is the founder of CryptocurrencyScripts.
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