-
@ Pete Winn 🔆
2025-03-10 01:35:28
2 different things.
- Self Custody is a personal risk adjusted preference.
- Decentralisation is a system level property that deals with the balance of power.
- As money is a network the level of decentralisation is determined by how much of the network you can trade with.
- Large custodians are bad because they capture a lot of people in 1 closed network
- Small self custody is bad from a power PoV as you have no economic weight within the network
- If the individuals only self custody and don't work together you have a coordination problem to act with others.
- if the two options are large self custody (you literally can't stop this) and individual custody then the majority of daily trade and MoE will flow into the custodial system
- trade volumes from self custody will each be insignificant (even from large holders) in where trade occurs.
- the correct answer in my view is custody at a meaningful level with local custodians aggregating funds, tx volumes, trade etc at an economically relevant level for the network (think the amount of funds you might transact as a town vs. one person - even a rich one)
- limits growth of large custodians as there are smaller competitors
- forces larger custodians to remain on open networks and standards as majority of customers are in the network no tin their node.
- balance with excessive self custody also of long term SoV and savings.