How Do Transaction Speeds and Costs Compare on Custodial versus Non-Custodial Platforms?

Custodial exchanges typically offer faster and cheaper transactions. This is because trades are often recorded on an internal ledger and not settled on the blockchain in real-time.

Non-custodial exchanges, or DEXs, interact directly with the blockchain for every transaction. This can result in slower confirmation times and higher transaction fees (gas fees), especially during periods of network congestion.

The trade-off is between the speed and low cost of a centralized system versus the direct, on-chain settlement of a decentralized one.