A non-custodial exchange allows users to trade cryptocurrencies without needing to deposit their assets into the exchange. Instead of the platform holding users’ funds, trades occur directly between users, typically through an automated system or smart contracts.In this setup, users maintain full control over their private keys and funds throughout the trading process. This enhances security, as there is no central point of failure where funds can be hacked or mismanaged.Transactions on non-custodial exchanges often happen peer-to-peer, meaning participants trade directly with one another. This promotes privacy and reduces the risks associated with centralized exchanges, such as regulatory issues or service outages.While non-custodial exchanges offer greater control and privacy, they may also require users to have a better understanding of wallets and blockchain technology. This makes them more suitable for experienced traders who prioritize security and autonomy in their trading activities.