What are Digital Asset Custodians & How does DIFX use them?
Cryptocurrency exchanges are one the most common places to buy, sell, and trade crypto assets. But that’s not all they offer anymore. The increasing demand for NFTs and DeFi ecosystem pushed exchanges to expand their services well beyond traditional trading. Many established exchanges offer staking platforms, decentralized exchanges, or even NFT marketplaces as well.
As crypto exchanges continue to grow as a one-stop platform for more users, the security of these platforms has become more important than ever.
Now, we have a question for you.
As a user, how much do you know about the security of crypto exchanges and the methods they use to store your crypto assets?
Digital Asset Custody
Cryptocurrency exchanges manage your crypto assets on your behalf and provide you with a user-friendly interface to interact with. You can simply log in to your account and buy, sell, or trade crypto with a few clicks. But this comes with a cost.
Centralized exchanges store your crypto assets in their storage or wallets. They have to keep some of the funds in their hot wallets to deliver services as these wallets have access to the internet. Even though you’re enjoying the benefits of fast and easy trading, this may leave your assets vulnerable to attackers.
2021 was a great year for cybercriminals and attackers: poly network’s $612 million hack was on the top of the list followed by the BitMart exchange, which suffered a $200 million loss due to a security breach.
Million-dollar hacks in recent years have made industry players look for better alternatives to existing digital custody solutions and in the process, Multi-party Computation (MPC) gained the attention of many.
MPC is a cryptography technique that splits a private key into multiple “Key Shares”. Companies can use MPC across their existing wallets and distribute the shares between multiple stakeholders. In this way, the assets can’t be moved by just one entity which makes them more secure against hacks and internal fraud.
But do all businesses have the knowledge or resources to implement MPC or other security measures?
Benefits of Custodians
Just like traditional markets, many businesses choose custodian solutions for storing their assets due to their simplicity, efficiency, great security, insurance, and reduced risk. With the right solution, exchanges can ensure the safety of their users’ assets while offering fast and low-fee transactions. It also ensures users as their assets are now protected by a reliable and well-reputed company rather than the exchange itself.
DIFX Mission to Secure Funds
DIFX is an innovative cross-asset platform that allows its users to trade across various markets such as forex, crypto, stock, and commodities. DIFX is always trying to provide its users with the best solutions out there, and that’s why it has partnered with Fireblocks, an enterprise-grade digital asset security platform for moving, storing, and issuing digital assets.
By combining MPC with other security techniques like hardware isolation, Fireblocks offers a novel solution to securing digital assets. What’s more, its unique insurance policies insure your assets against internal and external threats.
By using Fireblocks MPC Wallet, DIFX offers a fully-insured wallet that allows you to securely store your digital assets while enjoying a fast, low-fee, and user-friendly experience. For the first time, you don’t have to worry about hacks, exploits, human errors, or employee fraud, and now have a chance to fully focus on your trading and investment.
At DIFX, we value you, our users, the most and we have many more wonderful features prepared for you! So Stay tuned to learn more about our Nomination Program, upcoming institutional integrations, rewards, and much more!
DIFX is a CEX that uses blockchain technology to incorporate centralized finance. It is an easy-to-use platform for both new and experienced traders, establishments, and investors. As covered by Cointelegraph, BeInCrypto, and many other media outlets, DIFX allows users to nominate anyone from their family, friends or loved ones and allows them to legitimize their claim upon the primary user’s demise.
Additionally, the company hopes to increase the use of digital currencies for direct settlement between beneficiary and payer by eliminating intermediaries. To begin your journey with Endless Possibilities, download the app now from the iOS or Google Play Store, or visit us at difx.com