Self-Custody Trading

Definition ∞ Self-custody trading involves executing digital asset transactions directly from a user’s own wallet, where they retain control of their private keys throughout the process. This method avoids depositing assets onto centralized exchanges, thereby mitigating counterparty risk and enhancing user sovereignty. It typically occurs on decentralized exchanges or peer-to-peer platforms.
Context ∞ Self-custody trading is gaining prominence as users prioritize security and control over their digital assets. The rise of decentralized exchanges and advanced wallet functionalities facilitates direct trading without relinquishing asset ownership to intermediaries. Challenges persist in matching the liquidity and execution speed of centralized platforms, though continuous protocol improvements are addressing these limitations.