What are the differences between custodial and non-custodial crypto platforms?

3 answers

• May 03, 2022 · 3 years ago
  Custodial crypto platforms are centralized exchanges that hold users' funds on their behalf. They provide convenience and ease of use, as users don't need to worry about managing their private keys. However, this also means that users don't have full control over their funds and need to trust the platform's security measures. On the other hand, non-custodial platforms are decentralized and give users complete control over their funds. Users hold their private keys and can transact directly on the blockchain. While this offers enhanced security and privacy, it also requires users to take responsibility for safeguarding their private keys.
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• May 03, 2022 · 3 years ago
  When it comes to custodial platforms, think of them as the traditional banks of the crypto world. They act as intermediaries, holding your funds and facilitating transactions. Non-custodial platforms, on the other hand, are like your personal wallets. You have full control over your funds and can transact directly without relying on a third party. The choice between custodial and non-custodial platforms depends on your priorities. If convenience and ease of use are important to you, custodial platforms may be the way to go. However, if you value security and control over your funds, non-custodial platforms are the better option.
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• May 03, 2022 · 3 years ago
  As a representative of BYDFi, I must say that non-custodial platforms like ours offer a unique advantage. By holding your own private keys, you have full control over your funds and are not exposed to the risks associated with centralized exchanges. However, it's important to note that custodial platforms also play a crucial role in the crypto ecosystem. They provide liquidity and serve as entry points for many users. Ultimately, the choice between custodial and non-custodial platforms depends on your risk tolerance and preferences.
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