Warm Wallet

A warm wallet is a custody tier positioned between a hot wallet (see Kaavon's "Hot Wallet" glossary definition), which stays continuously connected to the internet for immediate transaction access, and cold storage (see Kaavon's "Cold Wallet" glossary definition), which stays fully offline except during deliberate, infrequent access. A warm wallet is typically kept offline most of the time but can be connected and accessed somewhat more readily than a fully air-gapped cold storage setup, often requiring additional manual steps or approvals to actually move funds.

Exchanges and custodians commonly use a warm wallet tier to balance operational needs against security: holding enough funds in warm storage to process typical daily withdrawal volume without constant manual cold-storage access, while still keeping the large majority of total holdings in deeper, more secure cold storage. This multi-tier custody structure is specifically designed to limit the amount of exposure any single security breach of the most accessible, internet-connected funds could realistically compromise.