Noncustodial Architecture

Definition ∞ Noncustodial architecture describes a system where users retain complete control over their digital assets and their corresponding private keys. Unlike custodial services, the platform itself does not hold or manage user funds, thereby reducing counterparty risk. This design principle emphasizes individual sovereignty and direct asset control.
Context ∞ Noncustodial architecture is a core tenet of decentralized finance (DeFi) and is often highlighted in crypto news as a security advantage. Reports discuss the trade-offs between user control and ease of use, as well as the importance of individual responsibility for key management. The ongoing development of user-friendly noncustodial solutions aims to broaden access to decentralized services while maintaining security.