Among the many reliable crypto wallet options available in decentralized finance (DeFi), one of the most popular is MetaMask. Its long-standing reputation, continuous innovation, and expanding integrations make it one of the top choices among self-custody crypto wallets.

In this guide, we’ll explain what MetaMask is, how it fits in the crypto ecosystem, and how it differs from other crypto wallet solutions. We’ll also offer insights to help you decide whether MetaMask is the right crypto wallet for you.

What is the MetaMask wallet? 

MetaMask is a self-custodial crypto wallet introduced in 2016 as a browser extension for the Ethereum (ETH) blockchain. Unlike custodial wallets that depend on a centralized third party to protect your private keys, MetaMask gives users full control over them.

Once set up, MetaMask allows users to send and receive Ethereum-based cryptocurrencies and connect with Ethereum decentralized applications (dApps) across DeFi, blockchain gaming, NFT trading, and more.

Over time, MetaMask has expanded to support additional blockchains compatible with the Ethereum Virtual Machine (EVM). These include popular networks such as Polygon (POL), Optimism (OP), and Arbitrum (ARB), making it a versatile choice for interacting with multiple blockchain ecosystems.

MetaMask's origins and growth

MetaMask cofounders Dan Finlay and Aaron Davis were largely self-taught software designers with formal degrees in the humanities – English literature for Finlay and Japanese translation for Davis. In 2013, they teamed up to create what would go on to become a groundbreaking tool for peer-to-peer (P2P) computing. 

After discovering Ethereum in 2014, the duo began exploring ways to support the ideals of web3. Backed by ConsenSys – a blockchain software company led by Ethereum cofounder Joseph Lubin – Finlay and Davis developed their idea into an accessible protocol. By 2016, ConsenSys launched the first version of the MetaMask browser extension on the Ethereum mainnet, marking the beginning of a new era in cryptocurrency tools.

The name "MetaMask" reflects its dual purpose: acting as a "meta" layer for integrating with Ethereum dApps while "masking" user identities. Its fox mascot also carries symbolic meaning. According to Davis, the fox represents self-reliance and solitude, reflecting MetaMask's emphasis on self-custody. The fox draws inspiration from Disney’s 1973 film “Robin Hood,” alluding to crypto's potential to promote economic equity and social justice.

Under ConsenSys’s leadership, MetaMask experienced steady growth, especially after launching its "Swaps" feature in 2020. Swaps enabled users to trade cryptocurrencies directly within their wallets, providing a reliable revenue stream to support ongoing development. The platform continued to expand with features like a mobile app, multi-network support, and direct crypto purchases using credit cards, debit cards, or PayPal.

By 2024, MetaMask hit a record high of 30 million monthly active users and surpassed 100 million users overall, solidifying its position as a leading tool in the crypto ecosystem.

What is MetaMask used for? 

MetaMask's primary function is to provide a secure and user-friendly way for individuals to manage their Ethereum-based digital assets. With a MetaMask wallet, users maintain full ownership and control of their crypto, allowing them to transfer funds in and out of their wallets at any time.

Beyond asset storage, MetaMask serves as a gateway to the decentralized economy. Its compatibility with dApps across the Ethereum Virtual Machine (EVM) ecosystem makes it easy for users to engage in activities like swapping tokens on decentralized exchanges (DEXs), earning rewards in staking pools, or accessing crypto loans.  

MetaMask's "Swaps" feature functions as a built-in exchange trading between Ethereum-based digital assets. MetaMask also allows users to directly purchase Ethereum-compatible cryptocurrencies through its interface. Depending on their location, users can pay with various methods, including credit cards, debit cards, ACH transfers, wire transfers, or PayPal.

Is MetaMask safe? 

As one of the oldest and most downloaded Ethereum wallets, MetaMask has a strong reputation for secure storage with high encryption standards. Unlike cloud-based platforms, MetaMask doesn’t store users’ private seed phrases in a centralized database. Instead, when users set up a MetaMask wallet, they generate a secret recovery phrase that’s stored locally on their device.

This recovery phrase gives users direct, intermediary-free access to their digital assets and serves as a backup to recover their wallet if their device is lost or damaged. However, because MetaMask doesn’t retain private seed information, users are entirely responsible for safeguarding this phrase. Anyone who gains access to the recovery phrase also gains access to the wallet and its funds.

MetaMask employs strong encryption, but because it's a "hot wallet" – an application that remains connected to the internet, it’s still vulnerable to hacks and cyberattacks. By contrast, "cold wallets," such as hardware devices, store private keys offline, making them immune to online hacks.

This online exposure also makes MetaMask users a prime target for phishing scams. Scammers often pose as MetaMask or ConsenSys representatives, attempting to steal sensitive information like the recovery phrase. Remember, MetaMask will never ask for your recovery phrase. Treat such requests as scams and keep your recovery phrase private at all times.

How to set up a MetaMask wallet

Creating a new MetaMask account takes only minutes – the first step is to ensure you’re on the official MetaMask domain. Given MetaMask's prominence in the crypto industry, fake websites and apps often mimic its logo to scam users. Always use MetaMask’s official website, metamask.io/download, to find authentic browser extensions and links to the iOS and Android apps.  

For the browser extension, start by selecting a compatible browser. MetaMask currently works with the following:

• Chrome
• Brave
• Firefox 
• Edge
• Opera

Once you’ve chosen your browser, install the MetaMask extension and select "Set Up a New Wallet." Create a strong password as your first layer of protection and securely record the 12-word secret recovery phrase. For maximum safety, write the recovery phrase on paper or a steel backup sheet instead of saving it digitally, where it could be hacked. Before completing the setup, MetaMask will ask you to re-enter the seed phrase to confirm the correct order.  

The setup process is nearly identical for mobile users downloading MetaMask on iOS or Android devices. The primary difference is that mobile users must visit the App Store or Google Play to download the official MetaMask app.

Alternative crypto wallets to MetaMask

While MetaMask is a leading self-custody wallet in the Ethereum ecosystem, it may not suit every crypto trader's needs. For example, it focuses on EVM-compatible assets and doesn’t support non-EVM cryptocurrencies like Bitcoin (BTC) or Dogecoin (DOGE). Users can explore a range of self-custody wallets, each with unique features and capabilities, to find the best fit for their needs.Here are a few of the most popular:

• Coinbase Wallet: Designed by the U.S.-based Coinbase exchange, Coinbase Wallet is a self-custodial option that gives users control over their private keys. Unlike MetaMask, it supports multiple blockchains, including Bitcoin and Solana (SOL), and allows integration with Coinbase exchange accounts for added convenience.
• Phantom: Originally built for Solana, Phantom now supports Polygon, Bitcoin, and Ethereum blockchains. Since its launch in 2021, it’s quickly gained millions of users thanks to its intuitive browser extension and mobile app.
• Uniswap Wallet: Uniswap, another leading decentralized exchange (DEX) in the Ethereum ecosystem, launched its self-custodial wallet in 2023 to simplify trading and liquidity pool management. The wallet integrates seamlessly with Uniswap’s DEX, allowing users to track and transfer assets effortlessly.
• Trust Wallet: Backed by Binance, Trust Wallet is a multi-chain hot wallet that's available as a browser extension and mobile app. It supports a wide range of blockchains and offers features like staking, swapping, and direct crypto purchases within its interface.

Manage your crypto portfolio with ease using CoinTracker

As a self-custodial wallet, MetaMask doesn't generate tax reports like Form 1099 at year’s end. Instead, crypto traders are responsible for compiling and submitting all their transactions in compliant tax forms. CoinTracker simplifies the data collection process by automatically syncing with your wallet's blockchain address, integrating your activity seamlessly into our wallet import flow. It also identifies and categorizes web3 activities – such as staking, NFT trading, and yield farming – ensuring your crypto tax forms are accurate and complete.

No matter which wallets or exchanges you use, CoinTracker is your trusted partner for hassle-free crypto tax reporting.

Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.