Why you need DeFi Custody
Out of all of the various services that fit into the overarching category of “decentralized finance” or “DeFi”, custody is probably the most important to keep on your radar. Here we will explore why.
What is Custody?
Custody is a service that keeps assets secure. Think of it as a vault for your secret keys to ensure that you don’t lose access to your assets. If your secret key is lost or compromised, you lose everything. In other words, custody ensures your exclusive access to your assets.
Why is custody important?
As long as your assets are secured and accessible, you have crypto assets. The minute that changes, your assets are gone. In other words: without custody, you don’t have anything.
In traditional banking, access to your assets lies in much more than just a twelve-word key. You have bank workers to call and access your money via a social security number, birth certificate, or other credentials.
Without private key custody in crypto, you can’t perform any functions: lending, trading, staking, governance, etc. And you can’t recover access to your assets by proving your identity to third-party service providers, because there is simply no third party to deal with: just smart contracts with code that require your specific secret key.
If you lose your secret key, you lose your assets. In order to prevent this, you need a good DeFi custody service.
How to choose a custody provider?
When it comes to DeFi custody, there are many factors that users need to be aware of. After all, we are talking about the security of your assets, and this is no small deal.
Whether a service is decentralized or not has gotten a lot of attention, maybe disproportionately so. After all, it is difficult for any service or crypto app to be entirely decentralized: complete decentralization would come at too much cost to be effective or worthwhile.
More important issues to consider when it comes to custody are reputability, track record, team, and management. It is obvious that sufficient research must be done before a user can choose a custody product to trust.
That’s why Magic Square is doing the hard part for users and providing integrated, community vetted DeFi custody solutions that have proved themselves in the past and continue to prove successful and beneficial in the present.
Magic Square’s integrated and vetted DeFi solutions
High-quality products are important to use in all cases, but when it comes to custody, it’s a complete must. Magic Square is making your life easier and more secure by doing the hard work and research for you, giving you the research and decision of a community of validators, which would be impossible to achieve as a single individual.
When it comes to custody, you don’t want to settle for anything less than the best. Also, different products might be better in different situations, depending on how much crypto you hold, which currencies you have invested in, etc.
Magic Square’s integrated DeFi solutions are making it easier for investors to make the most of their assets, custody is just one very important example of how important it is to choose the best solutions. Magic Square is making this possible in one click.
