General Questions

What does custody mean?

In digital asset trading, custody relates to who controls access and movement to your assets' cryptographic private keys. Unlike a bank, which holds cash or share records on your behalf, digital assets live on public blockchains, and whoever holds the keys controls the assets.

What is a smart contract?

A smart contract is a self-executing digital agreement written directly into code on a blockchain.

Instead of relying on a traditional middleman—like a centralized exchange, broker, or bank—to hold funds and clear transactions, a smart contract automatically executes and enforces actions as soon as predefined conditions are met.

What is collateral?

Collateral is the financial backing required to open and maintain leveraged positions.

What are gas fees?

Gas fees are the mandatory transaction fees paid to process actions on a blockchain network.

• Why they exist: Gas fees compensate network validators for processing transactions and prevent spam on the blockchain.

• Paid in Native Assets: Gas fees are paid in the native currency of the network you are using (e.g., ETH on Ethereum and Arbitrum).

• Layer 2 Savings: Depositing from Layer 2 networks (for example Arbitrum) incurs significantly lower gas fees — often just a few cents — compared to using the Ethereum Mainnet.

What is bridging and why is it needed?

Bridging is the process of moving assets (like USDT) or data between blockchains. Since networks like Ethereum and Stellar operate independently and can’t communicate directly, a bridge enables them to transfer tokens or information across chains.

What is a Layer 1 vs Layer 2 network?

Layer 1 is the main blockchain network, like Ethereum or Bitcoin, where transactions and data are stored directly on the chain. Layer 1 is secure and decentralized but can be slower and more expensive as more people use it.

Layer 2 is built on top of Layer 1 to make things faster and cheaper. It processes transactions off the main chain and then sends a summary back to Layer 1. This helps reduce fees and speeds up transactions while still using the security of the main blockchain.