Storing your ADA on an Exchange?
4 Reasons Why You Shouldn’t
Whether it seems more convenient, easier to trade or you have just forgotten, here are some important reasons to not keep your ADA on any exchange long term.
1 — Exchange Hacks
Countless exchanges have been the target of hackers over the years, such as; Altsbit in February 2020, Bitpoint in July 2019 and even Binance in May 2019 where hackers were able to make off with 7000BTC and the personal data of up to 60,000 users
Here is a comprehensive list of exchanges hacked over the years, in a lot of cases lost coins were never recovered and users were issued no refund.
Due to the nature of the cryptocurrency space there is no regulatory body holding exchanges responsible for the return of these lost coins. Once they are gone, they are gone for good.
2 — Exchange Downtime/Inaccessible Funds
Still not convinced?
All exchanges will have periods of downtime, be it for maintenance, system overload during busy periods or the aforementioned hack.
Whatever the reason, during this time your funds are locked in place and are inaccessible for an unknown time period over which you have no control
Reference: Coinbase Issues
3 — Earn Rewards & Help Secure the Cardano Network
Cardano is the worlds most decentralised cryptocurrency and with this comes unparalleled resilience and security, no 3rd party has control over your ADA. Keeping your funds in a secure software wallet such as Daedalus, Yoroi or hardware wallet such as the Ledger Nano will give you the freedom and security to be in full control of your ADA at all times.
ADA secured in your wallet can be delegated to a stake pool of your choice and you will earn rewards on your ADA at a rate of around 5%. Your ADA does not leave your wallet leaving you with full control over your investment.
When you stake with a pool your ADA is a vote of trust to that pool to produce blocks and secure the network. This will cost you nothing (save a small fee to delegate)
4. Contribute to the World Through Our Giving Back Initiatives
Unlike exchanges who focus on the bottom line, many of the stake pools are giving back to the wider community with charitable donations to various causes. These donations come out of the pool’s costs so do not affect your reward value but would not be possible without your delegation, it is a win win scenario!
