It is crucial that you understand the difference between custodial and non-custodial crypto exchanges to make informed trading decisions. This post will explore the differences and other relevant issues.
Custodial and Non-Custodial Crypto Exchanges
Depositing funds in custodial platforms such as Blockchain Exchange implies that you are trusting them to help safeguard your assets. In other words, you are not totally in control of your crypto on the platform.
Custodial exchanges are third-party services that can make certain decisions on behalf of their clients.
However, non-custodial crypto exchanges allow you to possess your private keys. The application will either have you write down a mnemonic phrase or give you a file. Unlike non-custodial platforms, it gives you total control of your funds.
Unique Differences between Custodial and Non-Custodial Crypto
Custodial and non-custodial platforms are different in the following ways:
• Custodial exchanges do not demand a transaction fee, unlike non-custodial platforms.
• Unlike non-custodial platforms, losing your private key is not a serious issue if you are using a custodial exchange.
• Custodial crypto exchange offers a higher backup possibility that allows you to undo or restore transactions, unlike non-custodial platforms.
Top Non-Custodial Platforms
Many people prefer non-custodial crypto exchanges because of the unlimited control they give users. Some of the best non-custodial platforms are discussed below:
Bitwala
Bitwala is renowned for its ability to serve as both a bank account and a crypto wallet. Apart from its versatility, it offers you twenty euros after your first trade.
Abra
ABRA’s ease of use, setup, support, and features makes it one of the best non-custodial exchanges out there. It also offers various trading options, including altcoins.
Final Thoughts
Both custodial and non-custodial platforms have their pros and cons. However, most people prefer the latter because of the unlimited access it offers them to their assets. If you want a non-custodial, pick one of the options above for optimumperformance.
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