When you first dive into the world of TON (The Open Network), it’s easy to get overwhelmed by the variety of wallet options and the intricacies of how they work.

In this guide, we’ll break down everything you need to know about TON wallets, wallet versions, custodial vs. non-custodial wallets, and how to keep your funds safe.

Why Do Different Wallet Versions Generate Different Addresses?

The wallet versioning system in TON can be confusing, especially for newcomers. Imagine you create a wallet using a mobile app and later receive a notification asking you to upgrade to a newer version, say version W5. After you update, you might notice that you now have two wallets—one linked to the old version and the other to the new one. But what’s more alarming is that the funds are only in one wallet. This situation can make anyone panic and wonder, What if I lose access to my money?

Let’s clear up the confusion by understanding how TON wallets and wallet versions work.

The Mechanics of TON Wallets: Smart Contracts at Work

When you create a wallet in a non-custodial app like Tonkeeper or MyTonWallet, a small program, called a smart contract, is uploaded/deployed to the TON blockchain. This contract handles all the functions related to receiving and sending funds. For instance, when you tap “Send 1 Toncoin” in your app, it triggers the smart contract to verify your ownership and execute the transaction.

Once the smart contract is deployed to the blockchain, it is assigned a wallet address. This address is unique because it is partly determined by the user’s seed phrase (a set of 24 words you use to access your wallet) and the specific code of the smart contract.

How Wallet Versions Affect Your Address

Here’s where things get a bit tricky: the code that governs your wallet can be updated over time. Developers regularly improve the smart contract code to add new features or fix bugs. When a new version is released, such as W5 in the summer of 2024, it becomes the standard for newly created wallets. However, your old wallet, created using a previous version (say V4), will continue to function as it always has, with the same address.

So, if you update your wallet to the latest version (e.g., W5), the new contract will be deployed at a new address—it cannot simply overwrite the old address because the code has changed. Both the old and new contracts can coexist and are linked to the same seed phrase, but they will have different addresses. This means that your funds are still safe in the old wallet, and the new wallet will start empty at the new address.

The Key Takeaway: Don’t Panic!

At first, this behavior might seem strange, but once you understand it, it’s actually a reassuring feature. The most important thing to know is that your funds in the old wallet are safe.

The new wallet is just an empty version of the contract at a new address. You don’t lose access to your funds, and everything will continue to work as before.

Custodial vs. Non-Custodial Wallets in TON

Now that we’ve covered wallet versions, let’s look at the different types of wallets available in TON or any other blockchain: custodial and non-custodial.

Non-Custodial Wallets: You Control Your Funds

A non-custodial wallet means you have full control over your funds. No third party can access your wallet unless they have your seed phrase (the 24 words).

In TON, popular non-custodial wallets include Tonkeeper and MyTonWallet. With these wallets, you are the sole custodian of your funds, meaning no one else can access them unless you provide the necessary credentials.

These wallets are generally safer for long-term storage because you have full control over your private keys.

However, the responsibility is on you to keep your seed phrase safe.

Custodial Wallets: Convenience with Risk

On the other hand, custodial wallets are platforms where a third party, like the wallet provider, controls your funds. This is common in platforms that operate as custodial wallets or crypto exchanges, such as the @wallet bot in telegram. While the chance of your funds being stolen is relatively low, custodial wallets come with the risk of someone having access to your funds.

A good example of a custodial wallet in the TON ecosystem is the Pie Trading Platform, a community-driven centralized exchange.

While custodial wallets are generally more convenient for active trading, they come with the caveat that the platform has control over your funds. However, for users looking for a secure place to store their money while trading in real-time, Pie Trading Platform offers the perfect balance between security and ease of use. You can trade your favorite tokens with minimal fees, making it an attractive option for traders.

Why Use Custodial Wallets for Trading?

If you’re an active trader and want to save your money on a secure platform while having access to real-time market data, a custodial wallet can be a good option. Pie Trading Platform provides a secure environment for trading with the added benefit of lower fees, allowing you to execute trades efficiently. Plus, the platform’s custodial nature means that while your funds are technically controlled by the platform, it’s optimized for trading and offers a smooth user experience.

If you’re interested, you can dive deeper into the Pie Trading Platform by reading the whitepaper.

Conclusion: Understanding the TON Wallet Ecosystem

Navigating the world of TON wallets can be tricky at first, especially with different wallet versions and the custodial vs. non-custodial debate. However, by understanding the way wallet versions and smart contracts work, you can rest assured that your funds are safe, even if you’re using a wallet with a new version or a different address.

For long-term storage and full control, non-custodial wallets like Tonkeeper and MyTonWallet are ideal. But if you’re looking to trade efficiently while keeping your funds secure, a custodial wallet like the Pie Trading Platform might be the right choice for you.

Stay informed, stay secure, and happy transacting in the world of TON!

Education

Understanding TON Wallets: A Comprehensive Guide for New Users