6 Tips To Protect Your Assets on a Non-Custodial Exchange: Security Strategies for DeFi Trading

Non-custodial exchanges have gained significant popularity among cryptocurrency traders who want to maintain control over their digital assets. Unlike traditional exchanges that hold users’ funds, these platforms allow traders to connect their own wallets and execute trades without giving up custody of their private keys.

The decentralized nature of a non-custodial DEX for crypto assets provides improved security, but traders must take additional precautions to protect their funds.

While non-custodial platforms reduce the risk of exchange hacks and frozen accounts, they shift the responsibility of security directly to the user. This means traders need to understand proper wallet management, secure authentication methods, and safe browsing practices. Without these protective measures, users can still fall victim to phishing attacks, malware, or other security threats that could result in permanent loss of their cryptocurrency holdings.

Use a hardware wallet like Ledger Nano X or Trezor Model T for secure key storage

A hardware wallet provides the best protection for crypto assets when using non-custodial exchanges. These devices store private keys offline, away from internet threats.

The Ledger Nano X offers Bluetooth connectivity and supports over 5,000 different cryptocurrencies. Users can manage their assets through a mobile app or desktop software.

The Trezor Model T features an open-source design with a touchscreen interface. It includes advanced backup options and supports most major cryptocurrencies.

Both wallets require physical confirmation for transactions. This means hackers cannot access funds even if they compromise a computer or phone.

Hardware wallets cost between $60 to $200 but provide much better security than software wallets. They protect against malware, phishing attacks, and exchange hacks.

Users should buy hardware wallets directly from manufacturers. This prevents tampering and makes sure the device is genuine.

The device generates a recovery phrase during setup. Users must write this phrase down and store it in a safe place away from the hardware wallet.

Enable two-factor authentication (2FA) on all related accounts and services

Two-factor authentication adds an extra layer of security to your accounts. It requires two forms of identification to access your data, making it much harder for hackers to break in.

Start by setting up 2FA on your email accounts first. These are often the main target for attackers who want to reset passwords on other accounts.

Next, enable 2FA on your exchange accounts and any wallets that support it. Look for “two-factor authentication” or “two-step verification” in your account settings.

Use an authenticator app instead of text messages when possible. Apps are more secure because they don’t rely on phone networks that can be compromised.

Don’t forget about related accounts like your bank, credit cards, and payment apps. These all connect to your trading activities and need protection too.

Keep backup codes in a safe place. Write them down and store them somewhere secure in case you lose access to your phone or authenticator app.

Always verify the URL and avoid phishing sites before accessing your exchange

Fake websites designed to steal login details pose a major threat to non-custodial exchange users. These phishing sites often look identical to real exchanges but capture passwords and private keys.

Always check the URL before entering any login information. Look for “HTTPS” at the start of the web address instead of just “HTTP.” The “S” means the connection is secure and encrypted.

Scammers create URLs that look similar to real exchange names. They might change one letter or add extra characters. Double-check every character in the web address.

Never click links in emails claiming to be from exchanges. Instead, type the exchange URL directly into the browser or use a saved bookmark. This prevents accidentally visiting fake sites.

Be suspicious of any urgent messages asking for immediate action. Phishing emails often create fake emergencies to make users act quickly without thinking.

If something looks wrong with the website layout or asks for unusual information, stop immediately. Real exchanges follow consistent security practices and won’t ask for sensitive data through suspicious methods.

Back up and securely store your seed phrases offline in multiple locations

A seed phrase is the master key to a crypto wallet. If someone loses it, they lose access to their funds forever.

Writing the seed phrase on paper is a good start. However, paper can get damaged by water or fire. Metal storage solutions work better for long-term protection.

Users should never store seed phrases on computers or phones. Digital storage puts the phrase at risk of hackers and malware attacks.

The best approach is to create multiple copies in different safe places. One copy might go in a home safe while another stays in a bank safety deposit box.

Some people split their seed phrase into parts. They store different parts in separate locations. This adds extra protection if one location gets compromised.

Metal plates or cards designed for seed storage resist fire and water damage. These cost more than paper but protect better against disasters.

People should test their backups regularly. They can verify that each copy is readable and complete without exposing it to digital devices.

Regularly update software and firmware of wallets and devices to patch vulnerabilities

Software updates fix newly discovered security holes that attackers could exploit to steal funds or compromise private keys. Hackers actively search for weaknesses in outdated systems.

Both software wallets and hardware wallets need regular updates. Software wallet apps require frequent updates through app stores. Hardware wallets need firmware updates plus companion app updates.

Updates include security patches that address known vulnerabilities. When companies discover security flaws, they release patches to fix these problems. Users who skip updates remain vulnerable to attacks.

Outdated software creates easy targets for hackers. Attackers often focus on systems that haven’t applied available security patches. The time between patch release and installation creates risk.

Updates also bring performance improvements and new features. However, security remains the primary reason to update promptly. Set up automatic updates when possible to stay protected.

Check for updates regularly across all devices and wallets. This includes phone operating systems, computer software, and wallet applications. Keeping everything current reduces attack opportunities.

Limit the use of public Wi-Fi when accessing your non-custodial exchange

Public Wi-Fi networks create serious security risks for crypto traders. These networks lack proper encryption and allow hackers to intercept data easily.

When users connect to coffee shop or airport Wi-Fi, their login details become vulnerable. Cybercriminals can steal private keys and passwords through simple network attacks.

Non-custodial exchanges handle valuable digital assets directly. A single security breach can result in permanent loss of funds with no way to recover them.

Traders should avoid accessing their accounts on public networks whenever possible. Using mobile data provides better security than free Wi-Fi hotspots.

If public Wi-Fi becomes necessary, users can protect themselves with a VPN service. This adds encryption between their device and the internet.

Keeping device software updated helps block known security holes. Hackers often target outdated systems on public networks.

Users should never access sensitive financial accounts on untrusted networks. Waiting for a secure connection protects both personal data and crypto assets from theft.

Conclusion

Non-custodial exchanges give users full control over their crypto assets. This control comes with the responsibility to protect funds from hackers and scams.

Key protection strategies include:

• Using hardware wallets for storage
• Enabling two-factor authentication
• Avoiding phishing attempts
• Securing seed phrases properly

Users who follow these security practices can trade safely while keeping ownership of their private keys. The trade-off between convenience and security makes these precautions worth the effort for serious crypto traders.