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A Custodian is an entity (such as a broker-dealer, bank, or transfer agent) that holds any securities you sell on behalf of investors (who are the "beneficial owners" of the securities).
This means investors do not actually possess legal ownership of any shares, convertible notes, or SAFEs in your company. Instead, the custodian is the legal owner on behalf of the investors. The custodian also votes these securities and signs any documents on their behalf, following the direction of the Lead Investor.
The Custodian is s the one entity on the cap table, because it is the legal owner of all the securities. The finance lingo is that the custodian holds these securities in "street name" on behalf of the "beneficial owners".
On Wefunder, XX Investments LLC - a SEC-registered transfer agent - acts as a Custodian for all securities sold on the platform.