Definition ∞ The state where control over a digital asset or protocol component resides outside the immediate user or the primary system itself. This typically refers to assets held in custodial wallets managed by third-party services or protocol parameters controlled by external governance bodies. It implies a reliance on an intermediary for asset security or operational decisions. This contrasts with self-custody or fully decentralized control.
Context ∞ External ownership is a central theme in discussions about the decentralization spectrum within the digital asset space. Debates often address the trade-offs between convenience and security versus true self-sovereignty. Future trends indicate a push towards hybrid models that offer both user-friendly interfaces and options for greater individual control over assets.
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