Custodial and non-custodial, in one paragraph
On a custodial exchange you deposit coins into an account the company controls. They hold the keys, show you a balance, and you ask them to send funds out later. If the company fails, freezes your account, or is hacked, your balance is at risk.
On a non-custodial exchange there is no account and no stored balance. You pay for one swap, and the output is sent to a receiving address you provide. You hold your own keys before and after.
What changes for you
Non-custodial does not mean risk-free. It moves the risk. You no longer trust a company to keep a balance safe, but you are responsible for the details of each swap.
- No account, balance or password to lose or have frozen.
- You must enter the receiving address correctly. A wrong address cannot be recalled.
- You must send the exact asset, on the right network, in the right amount.
- Each swap stands alone, so a problem with one does not touch other funds.
How to tell whether an exchange is non-custodial
Marketing copy is not evidence. Look at how the product behaves.
- Does it ask you to sign up or fund an account before swapping? That points to custody.
- Does it show a persistent balance for you? That is custody.
- Does it give a one-time deposit address for a single swap and send the output straight to your address? That is the non-custodial pattern.
- Does it ask for your seed phrase or private keys? Never share these. No legitimate swap needs them.
How Sense Swap fits
Sense Swap is a swap aggregator. You enter a receiving address, get a one-time deposit address, and send the exact amount. We do not hold your funds, keep an account for you, or ask for a seed phrase. We route the swap through independent providers and show you its progress until settlement.
Providers run their own checks and set their own limits, so the same rules apply to a Sense Swap swap as to the provider that executes it.
Questions
- Is a non-custodial exchange safer than a custodial one?
- It removes the risk of a company holding your balance, but not every risk. You are responsible for the receiving address, the network and the exact amount, and a mistake there is usually not reversible.
- Do I need a wallet to use a non-custodial exchange?
- You need an address you control to receive funds, and a source to send from. Some non-custodial exchanges require connecting a wallet; a deposit-address exchange does not.
- Can I lose crypto on a non-custodial exchange?
- Yes, mainly through user error: a wrong address, the wrong network, or sending a different amount than quoted. Check each detail before sending.