It’s no secret that crypto and Web3 face an uphill battle of mainstream adoption. Degen natives seamlessly navigate new wallets, exchanges, and Web3 technology while Web2 users are often confronted with trepidation, reluctance, and large knowledge gaps. For many DeFi Degens a core benefit to Web3 protocol is holding complete control over their digital assets. More awareness of and education on custodianship is needed to facilitate further recruitment from 2.0 to 3.0.
Popular centralized exchanges such as Coinbase have helped pave the way for this evolution from fully centralized holding of assets to a hybrid custodial model. With xxx daily volume of trades daily, Coinbase showcases that people trust keeping assets with a custodian; to them it’s secure and can be trusted. Yet, we still see fall off with further adoption of true Web3 custodianship that the broader Web3 ecosystem facilitates.
True custodianship is not reached unless no one but the user holds the private key to their wallet which can be accessed without limitation to transactions.
With Web3, users retain full and complete control of their data. With this comes heightened security backed by the proven efficacy of security. This has major implications for users living in markets with insecure currency and unstable governments. This then comes full circle to the positive social implications of decentralized custodianship in that as a result society should see governing bodies and consumer marketing become more and more ethical.
Lastly, and my favorite benefit of custodianship, is the application of interoperability. The concept of “interoperability” is the ability of one blockchain network to make sense of that of another and thus make possible the exchange of digital assets between networks. Users’ crypto wallets and self-sovereign identity (SSI) merge; meaning, your assets have no boundaries in web 3. The world as we know it further stands to benefit from custodial interoperability. Using smart contract and encryption technology can advance industries such as the judicial system and healthcare by facilitating the exchange of data back and forth in a secure, and private way.