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Custodial vs. Non-Custodial (Web3) Wallets

1. Non-custodial Walléts (can be called self-custody wallets) provide users with complete control over their assets. Popular examples include Mețămąșk and Trust Wallêt.

Non-custodial Web3 wallets are considered the safest option for most traders and investors, as long as their PrivateKey keys are kept private and secured. But if you loose your keys - there'll be no way to get back to the Wallêt.

2. Custodial wallets — involves a third party managing PrivateKey on behalf of users on the platform.

The Wallêts you have in centralised exchanges like - your Binance account, OKX account, Bybit account — are examples of Custodial Wallêts.

While offering convenience, users must trust the custodian with their assets, so it’s important to choose reliable and trustworthy Centralized Exchanges.