Definition ∞ A self-custody protocol enables individuals to maintain direct control over their digital assets without relying on third-party intermediaries. Users hold their private keys, giving them sole access and responsibility for their funds. Such protocols typically involve secure wallet software or hardware devices. It promotes financial autonomy and reduces counterparty risk.
Context ∞ Self-custody protocols are a central tenet of the decentralized finance movement. Debates often concern the trade-offs between user control and the convenience offered by centralized exchanges. The continued development of user-friendly self-custody solutions is vital for expanding the adoption of decentralized digital assets.
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