Definition
A non-custodial wallet gives the user control over the credentials or authorization rules needed to move blockchain assets. In a conventional design, the user controls private keys and a recovery phrase. Other designs use hardware, distributed key shares or smart-contract permissions. The essential distinction is who can authorize transfers, not the appearance of the application.
How It Works
The wallet prepares a transaction, obtains the required signature or approvals and submits it to the network. The provider may supply software and network access without being able to transfer the assets independently. Recovering access requires the backup or recovery mechanism specified by that wallet. A password reset for an unrelated email account does not automatically restore the blockchain keys.
Key Considerations
Self-custody removes some reliance on a custodian but shifts security and recovery duties to the user. Losing all necessary recovery information can make assets inaccessible. Malicious signatures and token approvals can still cause losses without revealing a private key. Furthermore, non-custodial does not mean every surrounding service is decentralized or unrestricted: interfaces can fail, networks charge fees, and some token contracts support freezing. Inspect the actual signing and recovery design rather than treating the label alone as a security guarantee.