In a previous blogpost we talked about self-custodial settlement paths in 10101. In this blogpost we explore how the 10101 app will enable you to stay self-sovereign in your self-custodial trade setup.
Without a certain level of self-sovereignty, your self-custodial setup might not be as protective as you think. If you depend on a single service provider too much, then you might not be able to act in a worst case scenario.
In our previous blogpost we wrote about the motivation for self-custodial trading and when it matters. In this blogpost we explore how the self-custodial setup works and what happens when you click the button to close a position.
When you trade in 10101 there are three phases:
Discovery: Finding a trading partner through the 10101 orderbook
Execution: Opening the position by setting a P2P smart contract on Bitcoin
Settlement: Closing the position by resolving the contract
This is the first in a series of blogposts that explores self-custodial trading with 10101 - why and when self-custody really matters, and how it works.
Bitcoin is objectively the best ledger out there. But, as great as Bitcoin is at solving the problem of self-custodial ownership, when it comes to using your coins you depend on centralized platforms. On an exchange you deposit your funds giving up custody - you rely on the exchange to be honest and return your funds once you want to exit. What if there could be a financial system where nobody can lie of cheat?
With 10101 you never give up custody. The app empowers you to trade self-custodial, eliminating the need for a centralized custodian, and enabling autonomy. You stay in charge at all times: Your keys, your coins.
