FTX exchange feud: why self-custodian wallets are important

in blurtech •  2 years ago 

**Take your funds off-exchange!** Are what follows during/after every crypto market crash, over and over we have seen crypto enthusiasts both on youtube, and other social platforms reiterate and making emphasis why we should get our funds off centralized exchanges. Not your keys, not your assets is one of the popular words we hear post-market clash well, I guess users ain't paying attention to these red flags leaving their assets controlled by centralized entities.

FTX exchange and other previous market crashes like Celsius halting withdrawal of users' funds three arrow liquidation all starts somehow as a result of users trying to get their funds off these investment platforms, but due to some internal issues, these withdrawals are paused which always results to Fear Uncertainty and Doubt (FUD) and triggers dumping of crypto assets by investors.

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Well without a permissionless self-custodial wallet these incidents will continue to be on replay in every market crash investors will always want to be on the safer side by making sure they get their funds out of centralized exchanges before things get out of control, the need for a self-custodial wallet is very important to avoid the fear of losing fund in case of exchange hack or withdrawal problems of removing funds.

Self-custodial wallet

Note Custodial wallets are used by centralized exchanges to store users' assets, they could halt all user transactions anytime it's faced with liquidity problems just as we have seen lately with FTX and blockFi.

With that said a self-custodial/non-custodial wallet gives users full control over their private keys. Examples of self-custodial wallets are hardware/cold wallet trezor and ledger wallets, software based self-custodian wallets that can be installed on mobile and desktop are Trust wallet, Electrum, and MetaMask. They provide users with easy access to buying crypto using payment cards they have support for multiple crypto tokens and also allow users to connect with other decentralized applications (DApps) for trading purposes.

Self-custodial wallets are important as they provide greater privacy for users to execute p2p transactions without any need for third parties.

With a self-custodial wallet, a user's security strictly depends on how they choose to share/keep their private keys it gives you financial control over your assets.

With FTX fall and users' funds being held/stuck from been withdraw is a clear red flag for one to start considering using a self-custodial wallet where one can manage their assets directly from their device.

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