A non-custodial swap is a direct exchange of digital assets between two parties without requiring a trusted third-party intermediary to hold the funds. These swaps are typically executed through smart contracts on decentralized exchanges or via atomic swaps, where users retain full control of their assets throughout the transaction. This method significantly reduces counterparty risk and enhances user sovereignty. It represents a core tenet of decentralized finance.
Context
The discussion surrounding non-custodial swaps is central to the principles of decentralization and financial autonomy in the digital asset space. A key challenge involves improving the efficiency and liquidity of these swaps, especially for less common asset pairs. Future developments will likely include more sophisticated routing algorithms and cross-chain non-custodial swap capabilities. The prevalence of non-custodial swaps is a strong indicator of a healthy decentralized financial ecosystem.
The CeFi giant's embedded DEX aggregator on Base eliminates critical user friction, directly funneling massive retail capital into the application layer's long-tail liquidity.
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