A normal pattern is to tier storage into a hot wallet and a cold wallet. Hot wallet is used for daily operations and can have lower security, but has a very low percentage of value, so that if hacked the exchange and eat the loss. The cold wallet can have very very high security measures such as multisig, physical security, geographic distribution, etc, and only needs to be periodically accessed.
Analogy in a old bank with cash or gold is hot wallet = cash that tellers have on hand, cold wallet = vault in the back that has everything else.
Yep. You can also put cold funds behind a multisig, which to use the vault in the back of the bank example, would require two managers to turn a key at the same time to open the vault.
Analogy in a old bank with cash or gold is hot wallet = cash that tellers have on hand, cold wallet = vault in the back that has everything else.