What are the differences between a non-custodial exchange and a traditional cryptocurrency exchange?

3 answers

• Nov 27, 2021 · 3 years ago
  A non-custodial exchange allows users to retain control over their funds throughout the trading process. Users' funds are not held by the exchange, but instead, they are stored in their own wallets. This gives users full ownership and control over their assets, reducing the risk of hacks or theft. On the other hand, a traditional cryptocurrency exchange acts as a custodian, holding users' funds on their behalf. While this may provide convenience, it also introduces a higher level of risk, as users are relying on the exchange's security measures to protect their assets.
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• Nov 27, 2021 · 3 years ago
  When using a non-custodial exchange, users need to manage their own private keys and ensure the security of their wallets. This puts the responsibility on the user to take necessary precautions, such as using hardware wallets or secure software wallets. In contrast, a traditional cryptocurrency exchange handles the security measures on behalf of the users. They implement various security protocols, including cold storage and multi-factor authentication, to protect users' funds. However, users need to trust the exchange's security practices and hope that they won't fall victim to a security breach.
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• Nov 27, 2021 · 3 years ago
  At BYDFi, a non-custodial exchange, users have complete control over their funds. They can trade directly from their wallets, without the need to deposit funds into the exchange. This eliminates the risk of funds being locked or frozen by the exchange. In addition, BYDFi employs advanced security measures, such as decentralized account recovery and multi-signature wallets, to ensure the safety of users' assets. With BYDFi, users can enjoy the benefits of a non-custodial exchange while maintaining full control and ownership of their funds.
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