Non-custodial transactions on Cardano refer to transactions where users maintain full control of their funds throughout the entire process. This means that at no point during the transaction does a third party (like an exchange or intermediary) take custody or control over the user’s assets. Instead, the users themselves initiate and manage transactions directly from their wallets.
Key characteristics of non-custodial transactions on Cardano include:
- Direct Control: Users manage their own private keys, meaning they have complete control over their assets.
- Decentralization: Transactions are processed on the Cardano blockchain, which operates in a decentralized manner.
- Security: Since users control their private keys, security depends on how well users manage their wallets. There’s no reliance on a third party, reducing risk from centralized hacks.
- Privacy: Non-custodial transactions provide better privacy since there’s no third party collecting personal information or monitoring transactions.
These transactions leverage Cardano’s native features, including its proof-of-stake (PoS) consensus mechanism and smart contract capabilities, enabling decentralized finance (DeFi) activities, token transfers, and other blockchain functions without the need for intermediaries.
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