Non-custodial entities are platforms or protocols that allow users to maintain full control over their digital assets without relinquishing private keys to a third party. These entities operate on a trustless model, where users directly interact with smart contracts or self-custody solutions. They contrast with custodial services, which hold assets on behalf of users. This approach prioritizes individual sovereignty over digital holdings.
Context
The rise of non-custodial entities represents a fundamental shift towards decentralization in the digital assets market, offering users greater autonomy but also increased personal responsibility. Debates often address the balance between user control and potential security vulnerabilities, such as lost private keys. Regulatory bodies are also grappling with how to oversee these decentralized structures.
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