A custodial node refers to a service that holds and manages users’ cryptocurrencies on their behalf. In this setup, users trust the service provider to secure their assets, typically through a wallet or an account managed by the provider.When users deposit their cryptocurrencies into a custodial node, they often relinquish some control over their private keys. The service ensures the safety of the assets, providing features like backup and recovery options, which can be beneficial for less experienced users.While custodial nodes simplify asset management, they come with risks. If the service provider is hacked or mismanages funds, users may lose their assets. Therefore, choosing a reputable provider with strong security measures is essential. In summary, custodial nodes offer convenience but require users to trust third parties with their assets. This balance between ease of use and security is a key consideration for anyone looking to manage cryptocurrencies.