# Custodial and Non-Custodial Wallets in an NFT Marketplace

> Give social-login users custodial wallets and let crypto-native users bring their own. How Creative Social did both, and how to guard a recovery phrase.

Canonical: https://mikereams.com/writing/getting-started-with-digital-wallets

Published: July 20, 2022  
Author: Mike Reams (https://mikereams.com/about)  
Topics: [Blockchain](https://mikereams.com/writing/topics/blockchain), [Digital Wallets](https://mikereams.com/writing/topics/digital-wallets), [Cryptography](https://mikereams.com/writing/topics/cryptography)  
Tags: Wallets, Blockchain, Metamask  
Project: [Creative Social NFT Marketplace](https://mikereams.com/work/creative-social-nft-marketplace)

![Getting Started With Digital Wallets](https://mikereams.com/writing/116f09531b08b08ece8219c4ae9a61bc8d65adc9-1200x800.webp)

*From 2022, when I was building Creative Social, an NFT marketplace for creators. The venture has since closed; the wallet design trade-off still applies.*

## The problem

A marketplace that sells NFTs has two kinds of customer. Some already have a crypto wallet and want to use it. Most don't, and won't install a browser extension and write down 24 words just to buy a piece of digital art. Support only one group and you lose the other.

## Two kinds of wallet

**Custodial:** the platform, or a wallet provider it works with, holds the keys for the user. Sign-in is familiar — email or a social account — and the user never handles a key. The trade-off is trust: the user depends on the custodian to keep the keys safe and to let them move their assets out.

**Non-custodial:** the user holds the keys, usually in a wallet such as MetaMask, backed by a 12- or 24-word recovery phrase. Nobody can freeze or lose the assets on their behalf — and nobody can recover them if the phrase is lost.

## What we built

- Social-login users got a custodial wallet automatically, the first time they did something that needed one. For a creator, that was minting (publishing) their first NFT without a personal wallet connected.
- Anyone paying by credit card used a custodial wallet, even if they had a personal wallet connected.
- Crypto-native users could connect their own non-custodial wallet and use it throughout.

The effect: nobody needed to understand wallets to buy or sell, and people who did understand them gave up nothing.

## If you hold your own keys

The recovery phrase is the wallet. Whoever has it controls the assets; lose it and they're gone.

1. **Keep it offline.** Write it down. Don't store it in a file, a photo, a note app or a cloud drive. Many careful users never type it at all.
2. **Never share it.** No legitimate support team, site or app will ever ask for it. Anyone who does is trying to take your assets.
3. **Store the copy somewhere safe and durable,** protected from loss, fire and water, and consider a second copy in a separate place.