/biz/ - Business & Finance

>>55467249
To be honest, crypto was not designed for custodial services at all. If complex financial tools or markets require custodians? So be it. Wait for a non-custodian solution to arrive.
If you want to link two markets, maybe custodian solutions are acceptable. But I feel like it'll only be exploited. Deny them before you can. They aren't going to comply with whatever feature the community implements for the auditability of custodianship. Hell, they don't even do that with transparent chains. Binance already runs fractional reserves on smaller liquidity coins. They are a large company supposedly with enough cash, so they simply don't hold tokens 1:1. It's not like anyone's going to go into the analytics of it.
They don't even do that for Bitcoin on medium-small scale exchanges. Most of the volume there is fake. And the spreads are huge compared for the supposed liquidity. Why do you think any other coin is going to get better treatment?
It might be a blackpill, but large scale institutions now do more for the entire cryptocurrency ecosystem than anything else. If it wasn't for them, people couldn't gamble on 200x leverages. If it wasn't for them, the FED's money wouldn't inflate everything hundredfold. If it wasn't for them, we wouldn't have crypto bankruns. If it wasn't for them, we wouldn't have 70-90% of all Bitcoin tainted with KYC. If it wasn't for them, regulators wouldn't view cryptocurrency as yet another novel financial asset to be assimilated into tradfi.