Non-Custodial wallet or centralized exchangeImage from academy.moralis.io
When it comes to staking crypto and earning passive income, there is always one decision to be made:
- Stake on a centralized exchange (like Binance)
- Stake on a non-custodial wallet (like Exodus)
For some, the answer is easy "Not your keys. Not your coins", but for me, it gets a little bit more complicated than that, and my "Too Long Didn't Read" answer is: Lend on Midas.
Risks with a non custodial wallet
I will talk here about hot wallets here like metamask and not cold wallets like Ledger Live.
With such a wallet, you are in charge of the security of your funds, so you need to pay attention to what you're doing on your computer.
When giving permissions to a website
You will get a popup like this one
And if it says something else than "See address, account balance, activity and suggest transactions to approve", you better know what you're doing before continueing.
When installing software on your computer
More and more hackers and viruses creators are aiming at gaining control over that kind of hot wallets, so if you're:
- downloading programs from shady websites and torrents
- have had a virus on your computer in the last year, you
Well, maybe a hot wallet is not for you 😀.
Risks with a CeFi exchange
For the CeFi exchange, the risks are more straightforward.
The exchange collapses → you can't recover your funds.
Indeed, it's the platform that owns your coins in your name, so there is now way for you to get to it.
This has happened many times in 2022 with very big companies such as Celsius, Voyager, Vauld and many more. And it will happen again... and again... and again...
So, what should you do, then?
Well there's no bad nor good answers, it all depends on:
- your trust over yourself and your computer skills → use a non-custodial wallet
- your trust over the platform you're putting your coins on → use a CeFi exchange
- your will to get the best rate for your coin → Use either of two!
My 2 cents
This is no financial advice and you should Do Your Own Research before investing
After having audited several platforms that I compare on StakingCrypto.io, my favorite one is definitely Midas as it ticks all checkboxes that makes a great exchange and shows they could handle any lasting crypto bear market:
- The team is Experienced
- They are transparent about what they're doing
- They sailed through the 2022's #dip flawlessly
- They don't use illiquid strategies
- and many more...
They also have the easiest website you can imagine :-)
Of course, they're not the only ones and you can rely on other exchanges such as FTX, Nexo or Binance as they seem too big to fail.Written by Martin Ratinaud