The key difference lies in who controls the private keys, and therefore, who has control over the assets.
Platform (Custodial) Wallet
In a custodial wallet, the platform or service provider controls the private keys on your behalf. This means the provider holds your assets in custody.
Your deposit address on Bake is an example of a custodial wallet. The same applies to most centralized exchanges like Binance, Kraken, or Coinbase. Your crypto is stored under their control.
Private (Non-Custodial) Wallet
With a non-custodial wallet, you control the private keys. This gives you full ownership and control over your assets.
Examples of non-custodial wallets include the DeFiChain Wallet, MetaMask, and Trust Wallet. With these wallets, you are responsible for managing your keys, and your security.
Please also check the following articles:
Transfer Requirements (‘Travel Rule’) FAQs
How can I withdraw Bitcoin, Ethereum, DeFiChain and Co?