Why people prefer custodial wallet?

1. They can generate more coins by staking etc.
2. It's cost efficient, they don't need to pay transaction fee, trading very is very cheap.
3. There's an exchange who claim to have funds for refund, so this make people think it's safer. They thought even the exchange got hacked and their coins drained, the exchange will refund back all the coins.

It's very hard for non custodial wallet to shine because hack not often to happen and they're not the victim.