What’s Phantom Wallet? Plus, how to set up and use it

Phantom Wallet started as a Solana-focused crypto wallet built for speed and everyday on-chain use. As the Solana ecosystem grew, Phantom expanded with it – what began as a simple browser extension for holding the Solana (SOL) token is now a multichain wallet used to store assets, interact with decentralized applications (dApps), and manage non-fungible tokens (NFTs) across several networks.

In this guide, we’ll explore what Phantom Wallet is, how it works, what you can do with it, and how safe it is for crypto investors.

How does Phantom Wallet work?

Phantom is a hot wallet available as a mobile app and browser extension. This product was initially created for the Solana ecosystem, but it later expanded to support additional blockchains like Ethereum, Polygon, Sui, and Bitcoin.

MetaMask served as an early inspiration for Phantom Wallet, but the latter focused more on improving the UI/UX experience within the Solana network. Just one year after its beta launch, Phantom reached one million users and introduced in-app cryptocurrency swaps for easier on-chain activities.

Like any crypto wallet, Phantom Wallet serves as a “window” to the blockchain, so it doesn’t store your digital assets inside the app. Instead, Phantom Wallet gives users full control over assets with its self-custodial model. You hold the private keys that let you decide when and how to move crypto in and out of your wallet. This independence eliminates intermediaries but places the responsibility for security on individual users.

What’s Phantom Wallet used for?

Phantom Wallet functions as a daily-use wallet for storing assets and interacting with dApps across supported networks. Here are a few ways you can use Phantom.

Store and manage crypto

Phantom lets you store native SOL and Solana Program Library (SPL) tokens, and it supports assets on other networks through the same interface. You can switch between blockchains inside the app without creating separate wallets.

In addition, Phantom stores and displays NFTs clearly and separates them from fungible tokens. This makes it easier to manage diverse collections, view metadata, and avoid accidental transfers.

Note that while Phantom Wallet supports multiple blockchains, each asset still lives on its native network. This wallet doesn’t convert assets automatically across chains, unless you use an integrated cross-chain swapper or an external bridge tool.

Stake SOL

Solana uses a proof-of-stake validation system, which means you can earn staking rewards by delegating your SOL to validators who secure the network. Phantom Wallet makes staking SOL even easier, since you don’t have to run a validator node or manage infrastructure.

You just choose a validator, delegate your SOL, and track rewards directly in the wallet. Delegation doesn’t transfer ownership of your SOL – you keep control over your funds and can undelegate tokens according to Solana’s rules.

Interact with dApps

Phantom connects directly to dApps across supported networks. You can connect this wallet to decentralized exchanges (DEXs) like Jupiter or Raydium to swap tokens, or marketplaces like Magic Eden to trade NFTs.

When you connect your Phantom wallet to a dApp, you’ll grant the application permission to view your public address. However, dApps can’t move your funds unless you manually approve a specific transaction request within the Phantom interface.

Is Phantom Wallet safe?

Security in Web3 is a partnership between the software and the user. Phantom employs industry-standard encryption to keep your private keys safe on your local device. In addition, there's a preview option that scans transactions before you sign them, alerting you if a contract looks malicious or you’re about to send funds to a known crypto scam address.

Despite these safety protocols, software wallets like Phantom stay connected to the internet at all times. This “hot” connection creates a vulnerability that sophisticated phishing attacks and malware can exploit. That’s why Phantom supports integration with Ledger hardware wallets, so you can use Phantom’s interface while keeping your private keys more secure.

How can you set up Phantom Wallet?

To start using Phantom Wallet, follow these steps:

1. Go to Phantom's official site: First, download the browser extension or mobile app, and verify the URL (fake wallet sites are common).
2. Create a new wallet: Next, you’ll choose “Create New Wallet” and set a strong password.
3. Save your seed phrase: Phantom will generate your 12-word recovery phrase (aka seed phrase). This secret password restores access if you lose your device, so record and store it safely.
4. Enable extra safety features: If you use your crypto wallet on your mobile device, consider turning on a biometric login option like Face ID or Touch ID. You can also set an auto-lock timer to make sure the wallet closes if you’re inactive. And for stronger private key protection, you can connect a Ledger hardware wallet.
5. Start using your new wallet: Select a supported network and copy your wallet address to receive funds. For example, if you’re transferring SOL, paste the Solana address from the relevant exchange into the “Withdrawal” field and confirm the transaction.

How can you use Phantom Wallet?

Once your Phantom Wallet is active, you can use it to perform various Web3 activities:

• To receive crypto, select your wallet name to copy its public address. You can then paste that address into an exchange like Coinbase or Binance.
• To move funds out, click on “Send,” select the relevant asset, and paste in the recipient’s public address. If you’re sending a large amount, it’s a good idea to perform a small test transaction first.
• To swap crypto, use the exchange icon at the bottom of the app. This feature lets you trade tokens like SOL for other assets directly.

What blockchains does Phantom Wallet support?

Phantom was a Solana wallet first, but it now supports several networks, including:

• Solana: Full support for Solana includes SOL and SPL tokens, NFTs, staking, and deep dApp integration.
• Ethereum: Phantom Wallet supports Ethereum accounts and ERC-20 tokens. You can also connect to Ethereum-based decentralized finance (DeFi) apps through the same wallet interface.
• Bitcoin: Phantom supports native Bitcoin accounts using modern address formats. This allows for basic Bitcoin (BTC) storage and transfers, but not smart contracts.
• Base: Phantom Wallet supports Base digital assets and dApps connection.
• Polygon: Users can manage assets and interact with Polygon-based apps through Phantom Wallet.
• Sui: Phantom Wallet includes support for Sui assets and apps, along with an interface tailored for this network.
• Monad: Monad support reflects Phantom Wallet’s expansion into new environments, although availability may vary as the network develops.
• HyperEVM: As the HyperEVM ecosystem grows, Phantom Wallet enables support with more compatible applications.

Just keep in mind that just because Phantom Wallet supports a blockchain, that doesn’t mean it works with every dApp on the chain.

Manage your Phantom Wallet with CoinTracker

Most crypto wallets leave the work of tracking and managing your Web3 activities up to you. That’s why CoinTracker integrates with Phantom and other wallets to pull transaction history across supported networks and record activity automatically. This creates a unified view of your crypto portfolio, and it simplifies your tax reporting.

Managing your crypto assets shouldn't be complicated. CoinTracker lets you track your entire portfolio across multiple exchanges and wallets, all in one place. Join the three million users who rely on CoinTracker for a seamless crypto experience – start free today.

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