Self-custody gives you control over your bitcoin because you hold your own keys. With community custody, trusted Guardians distribute responsibility for the funds while users access private ecash and Lightning payments. This is also valid for CASHU mints.
This article break down self-custody wallets and community custody, how each works, and the trade-offs to consider.
I think the interesting part is that this isn’t really a binary choice between “self-custody good” and “custody bad.” Community custody can remove a lot of operational complexity for new users, while still distributing trust among multiple Guardians rather than relying on a single custodian. The trade-off is that you’re still accepting a different trust model. Where do you think the tipping point is where a user should move from a federation to full self-custody?
Single-key self-custody puts all the risk on one person and one seed phrase, which is fine for the careful and technical but rough for everyone else.