Glossary · N
Non-Custodial
A wallet, exchange, or protocol that does not hold your private keys or have the ability to freeze or confiscate your assets. Non-custodial wallets (MetaMask, Ledger) and DeFi protocols give users full control — no company or authority can block access to your funds. The trade-off is that you bear full responsibility for securing your private keys. 'Not your keys, not your coins' is the maxim emphasising the importance of non-custodial asset control.
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How Non-Custodial works in practice
Non-custodial means you hold your own keys and no intermediary can move your funds. It is the property that makes DeFi resistant to seizure and to exchange insolvency, and it moves the entire burden of security onto the user.
Worked example
Funds in a self-custody wallet cannot be frozen by the protocol or a custodian. Funds on a centralised exchange are a claim against that company, and become a creditor claim if it fails.
Figures are illustrative and chosen to be checkable, not live market data.
The mistake that costs people money
Non-custodial does not mean risk-free — it means the failure modes change. There is no password reset, no support line, and no reversal. A lost seed phrase or a signed malicious transaction is final.
Non-Custodial: common questions
- What is Non-Custodial?
- A wallet, exchange, or protocol that does not hold your private keys or have the ability to freeze or confiscate your assets. Non-custodial wallets (MetaMask, Ledger) and DeFi protocols give users full control — no company or authority can block access to your funds. The trade-off is that you bear full responsibility for securing your private keys. 'Not your keys, not your coins' is the maxim emphasising the importance of non-custodial asset control.
- How does Non-Custodial work in practice?
- Non-custodial means you hold your own keys and no intermediary can move your funds. It is the property that makes DeFi resistant to seizure and to exchange insolvency, and it moves the entire burden of security onto the user.
- Can you give an example of Non-Custodial?
- Funds in a self-custody wallet cannot be frozen by the protocol or a custodian. Funds on a centralised exchange are a claim against that company, and become a creditor claim if it fails.
- What do people get wrong about Non-Custodial?
- Non-custodial does not mean risk-free — it means the failure modes change. There is no password reset, no support line, and no reversal. A lost seed phrase or a signed malicious transaction is final.