Self-Custody Explained: Why Pera Never Holds Your Keys
Self-Custody Explained: Why Pera Never Holds Your Keys
What Does "Self-Custody" Mean?
Self-custody means you — and only you — hold the private keys that control your assets. No company, no bank, and no third party can access, freeze, or move your funds without your permission.
When you use Pera Wallet, your private keys are generated and stored on your device. Pera's servers never see them. This is fundamentally different from keeping assets on an exchange or in a traditional bank account, where the institution holds custody on your behalf.
The simple version: If you hold the keys, you own the assets. If someone else holds the keys, you're trusting them to give you access.
How Pera's Self-Custody Works
Your keys stay on your device
When you create an account in Pera Wallet, a cryptographic key pair is generated locally on your phone or computer. The private key — the one that authorizes transactions — is encrypted and stored on your device. It's never transmitted to Pera's servers or anywhere else.
Your recovery passphrase is your backup
During account creation, Pera generates a 24-word (Universal Wallet) or 25-word (Legacy Algo25) recovery passphrase. This is the human-readable version of your private key. It's the only way to restore access to your account if you lose your device.
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Pera never sees your passphrase. If you lose it, nobody — not Pera, not Algorand, not anyone — can recover your account. This is the tradeoff of self-custody: full control also means full responsibility.
For detailed backup instructions, see Backing up your Recovery Passphrase.
Transactions require your approval
Every transaction — sending, swapping, staking, connecting to a dApp — requires you to sign it with your private key. Pera Wallet handles this signing process locally on your device. You confirm with your PIN, biometrics, or passkey, and the signed transaction is submitted to the Algorand blockchain.
No one can initiate a transaction from your account without your explicit approval.
Self-Custody vs. Custodial Services
| Self-Custody (Pera) | Custodial (Exchange or Bank) |
|---|---|---|
Who holds the keys? | You | The company |
Can they freeze your funds? | No | Yes |
Available 24/7? | Yes — blockchain never closes | Subject to business hours, maintenance, outages |
Risk if company fails? | None — your keys, your assets | You may lose access (see: FTX, Celsius, SVB) |
Recovery if you lose access? | Recovery passphrase only | Customer support, ID verification |
Privacy | No personal data required for basic use | KYC/AML identity verification required |
Why Self-Custody Matters
You're not dependent on anyone else's solvency
When an exchange or custodian holds your assets, your funds are only as safe as that company. If they get hacked, go bankrupt, or freeze withdrawals, you're stuck in line with every other creditor. With self-custody, there's no counterparty risk — your assets live on the blockchain, accessible only to whoever holds the keys.
You have 24/7 access
Traditional banks close on weekends. Exchanges go down for maintenance. Wire transfers take 3–5 business days. With Pera, you can send, receive, and manage your assets at any time — the Algorand blockchain processes transactions in seconds, 24 hours a day, 365 days a year.
Your data stays yours
Pera Wallet doesn't require an email address, username, phone number, or identity verification to create an account and use basic features. Your financial activity isn't tied to a profile that can be sold, breached, or surveilled.
The Responsibility That Comes With It
Self-custody isn't just a perk — it's a commitment. Here's what it means in practice:
Back up your recovery passphrase immediately. Do this during account creation. Store it offline in a secure location. See our backup guide for best practices.
Never share your passphrase with anyone. Pera will never ask for it. No legitimate service will. Anyone who asks is trying to steal your assets.
Protect your device. Enable your phone's screen lock, use biometric authentication in Pera, and keep your app updated.
Understand that transactions are final. There's no "undo" button on the blockchain. Double-check addresses and amounts before confirming.
Security Features in Pera
Pera is built to make self-custody as secure and frictionless as possible:
- Passkeys (Liquid Auth): Passwordless authentication using biometrics or hardware keys. See our Passkeys guide to set them up.
- Rekeying: Assign a new private key to your account without moving your assets — useful if you suspect your keys may be compromised. See How to Rekey.
- Ledger support: Connect a hardware wallet for an extra layer of security. Your keys live on the Ledger device, isolated from your phone or computer.
- Open source: Pera's code is publicly available on GitHub so anyone can verify how it works.
Related Articles
- Backing up your Recovery Passphrase
- How to Manage Your Passkeys in Pera
- How to Rekey an Algorand Account with Pera Mobile
- Spotting Phishing Scams
Need more help? Chat with us or visit perawallet.app/contact-us.
Updated on: 14/05/2026
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