You don’t need a centralized exchange: take full control of your digital assets

When buying cryptocurrency for the first time, you have two options: (1) custodial through an exchange like Coinbase, where you’re not in complete control over your assets or; (2) through a fiat on-ramp using your non-custodial wallet where you’re in control from the start.

In this blog, we’ve partnered with Argent and ZigZag to show you how to take full control of your own crypto. But first, let’s look at the fundamentals.

Decentralized exchanges vs centralized exchanges

A decentralized cryptocurrency exchange (DEX) allows peer-to-peer transactions directly from your non-custodial wallet, without going through an intermediary. Essentially, a DEX relies on smart contracts to enable you to buy and sell digital assets without an intermediary.

By contrast, a centralized exchange is managed by a third-party organization looking to make a profit through transaction fees. The vast majority of transactions are on centralized exchanges. But the cracks are beginning to appear within the arguments for them.

Sure, third parties such as centralized exchanges remove some complexity of setting up an account. And yes, if you get hit by a bus tomorrow, your family can’t access your non-custodial wallet without your seed phrase. But these arguments are increasingly weakening in the face of much improved UX from non-custodial wallets and decentralized exchanges. Take Argent, for example, a smart contract wallet that has eliminated seed phrases all together.

But more importantly, what if your centralized exchange is hacked? And what happens if it mishandles your funds. What if it goes bankrupt? In the year 2020 more than 75 centralized exchanges closed down. In 2022, the implosion of FTX and before that other industry titans such as Celsius Network, BlockFi and Voyager Digital should serve you with a stark reminder of a cold hard truth: your digital assets may not be safe on a centralized exchange.

While a custodial wallet might reduce your personal responsibility, ultimately it requires your trust in the custodian that holds your funds. And unlike with your highstreet bank, centralized cryptocurrency exchanges aren't usually insured - and many are registered offshore - so in the event of a hack or a bankruptcy, it's highly likely you'll lose your crypto assets forever, with no recourse to action.

Custodial wallet vs non-custodial wallet

As you might have guessed, a custodial wallet is one in which your digital assets are held by a third party for you. Essentially, you’re entrusting a third party - often a centralized exchange - to hold and manage your private keys - along with your crypto - on your behalf.

A non-custodial wallet - also known as a self-custody wallet - provides you with sole control of your private keys. And therefore your digital assets are in your possession and control at all times, allowing you to do whatever you like with them. Most custodial wallets are mobile or web-based exchange wallets.

If a user loses access to their non-custodial wallet, they'll lose access to their crypto and there's nothing they can do about that. Conversely, custodians typically allow you to have your password reset in the same way we might do so on our eCommerce or email accounts.

But, by using a custodian, you're placing your trust in their ability to keep your crypto safe and to give you access to your assets whenever you want them.

Why choose a non-custodial wallet?

Not only does a self-custody (aka non-custodial) wallet give you greater control over your assets, but you can do more with them. For example, if you want to explore the best that crypto has to offer like Uniswap to trade tokens or OpenSea to buy and sell NFTs, you’ll need a non-custodial wallet.

Argent, Trust and Exodus are examples of popular non-custodial wallet service providers (all of whom have integrated Ramp).

Replacing the centralized exchange through self-custody

With self-custody, you can replace the need of ever using a centralized exchange to buy, sell and store your crypto securely.

It's super easy to do which is why we've teamed up with Argent and ZigZag to show you how to take full control of your digital assets.

Getting started with Argent

Argent is the most secure wallet for individuals and allows you to securely buy, store, invest and send crypto at low fees, earn high interest and swap tokens at the tap of a button. All this without a seed phrase!

To get started, all you need is a mobile and an internet connection.  

1. Simply download Argent on iOS or Android  
2. Complete the onboarding process (email and phone number are used for security)

It takes less than a minute to create a wallet and access all the benefits that crypto has to offer.  

How to buy cryptocurrency with Argent

Once you’re set up with Argent, you can make your first crypto purchase with Ramp. To make this process even easier for you - we at Ramp have removed our fees for your first purchase to make self-custody that little bit easier.  

Here’s how easy it is to buy crypto in the Argent app with Ramp:

1. Tap Receive then Buy crypto
2. Choose the amount you’d like to buy and the asset (ETH, USDC, USDT or DAI)
3. Check your email address and accept Ramp’s Terms of Service
4. Confirm your email address by entering the code
5. Tap Proceed
6. Choose your preferred payment method and tap Proceed
7. Follow the steps for your chosen payment method to complete the purchase

Ramp has a wide range of payment methods available for you to choose from, including Google Pay, Apple Pay, bank transfer and cards.

To make your first purchase, you will need to register with Ramp. Depending on the amount, you may also need to provide additional information (you can read our KYC limits and requirements here).

What is Zigzag and how to use it on Argent

With your Argent wallet, you can get low cost, high speed trading with ZigZag - a decentralized exchange on zkSync that’s integrated into the app.

Trading tokens on Ethereum mainnet can regularly cost tens of dollars in network fees, making it too expensive for most people, forcing many to stay on centralized exchanges.

ZigZag on zkSync fixes that.

Trading with ZigZag costs as little as $0.02 which includes all fees and it’s only going to get lower!

Making your first trade is easy - just follow these steps:

1. Open the Argent app
2. Tap Swap
3. Select the asset you want to swap in exchange for another
4. Tap Preview swap
5. Tap Buy

Shortly after, your transaction will be completed. Quick and easy with you in control, the way it should be.

As the limitations of centralized exchanges become increasingly clear, there is a stronger case for decentralization than ever. We stand for trustless systems that operate in permissionless environments. The more often we can be reminded of that before the industry strays away, the better off we’ll be in the long run.