# Hot wallet

A hot wallet is a wallet whose signing keys are held in systems connected to the network, enabling immediate, often automated, transaction signing. Hot wallets exist for operational speed: client withdrawals, exchange connectivity, and settlement flows, and they carry the highest exposure of the storage tiers.

## Running hot wallets safely in a bank

Even hot, keys belong in HSMs, never in application memory; policies cap balances and velocities; destinations are whitelisted; and compliance screening runs pre-signature. The hot tier should hold working capital only, with the bulk of assets in warm and cold tiers.

Taurus-PROTECT manages hot, warm, and cold tiers under one policy engine, so rebalancing between tiers is itself a governed, quorum-approved operation.

FAQ:

- How much should sit in a hot wallet? Only what operations require, typically low single-digit percentages of assets under custody. The strictest regimes cap it explicitly by requiring 95 to 98 percent of client assets in cold storage.

Related: https://www.taurushq.com/glossary/cold-storage/ https://www.taurushq.com/glossary/warm-wallet/ https://www.taurushq.com/protect/

Learn more: https://www.taurushq.com/glossary/hot-wallet/