Hot wallets maintain keys on internet-connected devices, making them convenient for daily use but vulnerable to malware, phishing, clipboard hijacking, and browser extension exploits.
DeFi interactions, NFT marketplaces, and token approvals expand attack surface significantly. Unlimited token approvals to untrusted contracts remain a common loss vector.
Treasury and personal holdings above operational thresholds should reside in cold storage with hot wallets funded only for immediate needs.
Migrating to cold storage after exposure does not retroactively protect funds already at risk; compromised hot wallets require incident response, not assumption of safety.