Two wallets typically serve distinct purposes to balance convenience and security. The hot wallet is used for day-to-day transactions, such as deposits, withdrawals, and trading, providing quick access to funds for active investment activities. The cold wallet, on the other hand, is used for long-term storage of a majority of the platform’s assets, keeping them offline and more secure from hacking or online threats. When users make transactions, funds can be transferred from the cold wallet to the hot wallet as needed, ensuring that the platform can handle liquidity demands while safeguarding the bulk of its holdings in a more secure environment.