Self-Custody Philosophy

What Self-Custody Means

Self-custody is the foundational principle of Valeo. Unlike traditional financial institutions that hold and control customer funds, Valeo users maintain complete ownership of their assets through cryptographic private keys.

Key Principles:

Principle	Traditional Banking	Valeo Self-Custody
Asset Ownership	Bank owns custody, user has claim	User directly owns assets via private keys
Access Control	Bank can freeze or restrict account	Only user can authorize transactions
Third-Party Risk	Exposure to bank insolvency	No counterparty risk
Regulatory Seizure	Possible with court order	Only user controls access
Portability	Limited by bank policies	Fully portable via recovery phrase

User Responsibilities

With self-custody comes complete responsibility:

1. Private Key Security

   • Safeguarding the 12/24-word recovery phrase

   • Never sharing keys with anyone

   • Secure backup storage (offline, multiple locations)

2. Transaction Verification

   • Confirming recipient addresses before sending

   • Understanding transaction irreversibility

   • Validating amounts and fees

3. Account Recovery

   • Maintaining secure backups of recovery phrase

   • Understanding that lost keys = lost access

   • No customer service can recover lost keys

Non-Custodial Architecture Benefits

Security Advantages:

• Elimination of central honeypot targets

• No single point of failure

• Reduced attack surface

Financial Advantages:

• No risk of institutional insolvency

• No fractional reserve exposure

• Direct ownership of assets

Operational Advantages:

• 24/7 access without intermediary approval

• No account freezes or restrictions

• Censorship-resistant transactions