DAPPCON 2024: What Makes A Self-Custodial Bank? Reflections From Ex-Revoluters - Hannes Graah

Transcript

hey son everyone my name is hes or gradient on the crypto Twitter verse and I'm one of the builders at Zeal um Zeal is a team of former revols who started building this NE this new wallet as we call it a couple of years back and I'm going to talk a bit about what we can learn from neobanks a problem we were thinking about when we were working at revolute and then we've been thinking about how we can apply some of those learnings in the wallet space this presentation is also known as the yay we're launching Zeal today presentation because that's what we're doing so first off what is a bank technically it's a licensed financial institution that accepts deposit from the public and creates a demand deposit while simultaneously making loans this is what a bank is but what people want

from bank is for the deposits to be safe this is the number one thing for a bank making sure that money is safe and people want to be able to use their money together with a bank more money is moving into Banks from cash because right now Regulators are waging a war against cash but when we ask the Central Bank the ECB they can they say that cash is something that ensures our freedom and autonomy that bank coins uh Bank notes and coins are the only form of money that people can keep without involving a third party this is not be making up this is a link here you can check the cash strategy of BCB and it also that cash ensures privacy um they respect our fundamental right to have our privacy data and identity protected in financial

matters so how can we ensure that our freedom and autonomy survives this war on cash we need to build wallets that deliver what people want from banks with what they need from cash and we'll be talking about some of these design principles that are leading of how we have been implementing Zeal but also how we think can help others build wallets these are kind of bigger objectives that we have by no means are all of these already there um but it's a good goal post to have to deliver solutions that matter and help people so first off we need to build wallets that aim to become safer even than Banks and that are easier than cash at the very least easier than physical

cash and that can do everything money so not just constraint to very narrow set of use cases and we believe if we can accomplish these things then we have built great solutions that allow people to engage in the financial lives with the Safety and Security that banks give them but in a self custodial way should be noted here when we talk about self custodial Bank banks are licensed entities so this is more of a design exercise than a marketing exercise first off one thing that's important and we made making great strides on this one as an industry is on boarding you know the the Epic example of seed phases and where you put them or hide them or we've lock them up in the bank we finally have solutions to

killing seed faces we now have Smart wallets with safe as the industry leading contract for that or contract Suite together with new Innovations like pass keys and without Biometrics that allows us to secure things in a simple yet safe way and finally these things are coming together in a way that we can deliver great experiences to people speed of transactions we can't wait 15 minutes at point of sale for a transaction to clear before we get our coffee right but now we have not just l2s but l3s we have layers on layers that help us solve the speed problem and connected to that also transaction fees you can't pay for coffee if a transaction cost more than the coffee itself but with layers and

blobs and Beyond we have now also solved the cost of the transaction cost problem where basically on several places the transaction fees becomes a rounding error and we can also handle smaller and smaller transactions and then gas not just in the concept of fees but gas as something that people have to think about when they make a transaction classic one is I load up my wallet with say USC and then I can't make a transaction CU I don't have XD or Matic or ether what it might be but now we can make transactions with almost any token thanks to coun abstraction uh and lastly and this is not so much a technical development although there is some aspect to it when

it comes to compliance and uh and makinging things work better which is ramping both on and off ramping um for a long time moving money into crypto or on ramp or on chain has cost 4% up to 5% which can work if the objective is to make 10x on a mem coin but if you're just a person getting your salary and paying your rent buying a beer or coffee then all of a sudden 4% is roughly the interest you get on a current account or a savings account even so if you want to make onboarding work really really smoothly we have to make the cost also converge with zero if we look at neobanks most of them have removed

onboarding costs and they subsidize them from different parts of the business unit if you look at both revolute and n26 and these Banks you can basically move money into your account with the various channels and not have to worry about a very large unit and we need to get that too I think the solution in this aspect for the industry and it's happening as we speak is larger demand I larger volumes moving on and off chain and that because there's more demand comes competition and with competition that drives down the costs and that's happening right now where we see a number of different players coming out with more and more aggressive um pricing to make it basically converge with zero so we think these are some of the the key aspects of onboarding that for quite some time hasn't been there but we're

now getting to PE to place where they are there and we can build solutions that do things but we have to do things that are going Beyond trading and this is another aspect that we think is important if we only build focused on trading use cases then we only get trading and Traders and if we want to make crypto Evergreen we want to make crypto something that is around the year or around the decade we have to make it less cyclical and step out of just the the bull and the bare Market swings that we have had the last 10 years and really the OG use case for crypto 15 years ago per top cash uh is something that we we still haven't

really delivered on we are starting to deliver on it now but it's still hard to just send a payment link with some digital dollars to someone who's not in crypto yet even people who are in crypto still do traditional Web Two peer-to-peer payments because it's not that easy to just make a a self-coded peer-to-peer payment even though this was the original promise right the Bitcoin white paper so peer-to-peer payments is one of them and the other one and we just had nois pay and and visa on stage which is one of the we think one of the key drivers in this is daily payments making crypto useful daytoday and almost all of us buy something every day not all of us set up an LP position in Unis swap every day but most of us buy something every day

and daily payments is something that allows us to build a closer relationship with customers and then can onboard them and bring them out to other use cases within crypto so we think these are two of the more important things to to enable in order to make crypto useful outside of the trading Cycles but by no means of course an uh an extensive list of use cases because there's a lot of innovation in the space which brings to the next point of having differentiated experiences so we got this onboarding stuff done right we have smooth onboarding people don't have to worry about seed phrases and they can uh they can sort out all all the basics but that's just the table Stakes then what then we have to do something that people want to do now they can do it but

why do they want to do it and this comes down to differentiated experiences at revolute we did FX at cost for xats which um which was a great nuance and differentiated go to market and we need to think similar when we're building experiences in this space and grow the pine not just by differentiating versus other wallets in ecosystem but versus real life use cases some people care about self- custody some people care about higher yield lower transaction fees in certain transactions we need to innovate on these different areas and this is something talk to many wallet builders that many or most of us are obsessing about and we need to make sure that obsess also Obsession also extends outside of crypto into the broader real world use

cases a ux1 less is more we love throwing all the details um at people in interfaces but sometimes less is more I won't say more than that making the old world and the new world work side by side I I think a great parallel here is how voice over IP has slowly integrated to work side by side with telephony right now if someone calls me on my landline I'm almost a bit afraid why they're calling me on this old number when everyone who knows me calls me on one of the many messenger apps right and I think we need to see something similar happening also in our space where it's not ens and ZX addresses over there and then Real World Finance over here these two worlds need

to live side by side and we have an amazing ubiquitous um money address layer money address protocol globally right with with card details with card numbers so we need to let our hex addresses and our I bands and our C details live side by side and experiences that Embrace both of the worlds and make them work together so these are some of the kind of broader Dimensions we're thinking about and I want to actually show how this comes live inside Zeal our mission with at Zeal is to empower people to transact freely without intermediaries we're a team of 11 seven came from revolute it's been about 2 years in the making we're UK company um nois just joined us as an investor and

and a partner couple weeks back so nois joins our other investors variant framework Galaxy and and and many others and we're super excited after almost two years of of building this and recently also testing since last dep on last year to now take our product live on multiple platforms with multiple products so today today we're launching both the zal browser extension the zal Android app and the zal IOS app which currently is available on test flight but anyone can access to it similar to our unisoft launch the wallet uh and Visa cards importable or orderable through Zeal together with nois pay we think these are key building blocks to help us a

bridge between your unchain Financial world and your real world finances so see if this works as well so what we have here well first off we have our homepage on the left hand side which we just launched this morning z.

app um I'm going to show a couple of different use cases now so you can see how how zil Comes live first off just good old portfolio you can add any wallet as a track wallet so I'm going to add in Deen Spartan here because he has a large portfolio of many things um here we go so we can see almost all the tokens across many different networks it's a long network list here we support all EVMS but some networks have Smart wallets not all EVMS have Smart wallets yet D5 positions where you can see

pending rewards Health ratios and lending protocols and if you have some nfts you can see them at the bottom well as as a gallery so a very broad portfolio mode where you can see how your how your assets are are developing over time um both when they're in your wallet as well as when they deposit in different protocols now I'm going to demo our smart wallet which is an exciting one all right so smart wallet you can pay for Network fees with stable coins and tokens it's powered by safe and we support of the getco nine different networks with the same add space so we're going to create a wallet

here on stage now I'm going to this is a biometric safe wallet based on pasis right so first I'm going to create a a pass key in my face now we're generating a safe counterfactually and now we're deploying a reference safe on nosis chain what's happening in the background here in this twostep click process is you created a safe on nosis chain with a validator contract connected to your pass key and a secondary locally stored private key that can be used for ongoing transactions to reduce the gas overhead when making transactions a little bit technical detail but it makes things smoother and also allows us to recover

this address in the future on with the same address base on multiple chains so now we have a wallet here um called on stage it's it's a freshly created wallet as you saw I'm going to send over some tokens to it let's send over some xti to on stage send over 2x on stage now we're doing safety checks so you can see first token balance simulation you see exactly how tokens will decrease or increase in your wallet in this Cas it decreases because I'm sending out the tokens right you also see safety checks down here safety checks for us are many different things one of them is we onun a tenderly

simulation and you can up open up the trace and see exactly what happens in the transaction if you're Technical and want to see that we also um check if the tokens that are being uh uh transmitted or received are verified tokens on coin going Lev the sources of Truth and we're also performing safety checks with blockade to see if there's any issue with a contracted interacting with the token that you're interacting with so Blockhead safety checks t simulations and a number of of propriety internal safety checks so let's send this over here add que and you can see here transaction States at the bottom um and yeah there we go transaction complete sent I also Al send some just to show

that it's a smart contract or multi-chain wallet I'll send some Ed Toc as well don't stage oh this is a TVM okay let's do uh there we go same thing again we get safety checks sending to network added to Q where is it on this journey to the first confirmation on chain okay include in the block so now we can open up the other wallet the onstage wallet which now has received

some tokens here you see you saw this is a new wallet right that I that I just created so there's no Matic anything in this one but I can now Swap this Matic or this usdc to some token to Matic for example we have built-in Swap and bridging screen saver how many minutes to sh all back um so we now show um a swap from USC into Matic on chain appr transaction now this is first transaction I'm making here so now I have to use my face ID for the first

transaction it's the pass key signature that's happening now now I see relaying queuing this is account abstraction with bony with a safe but with bony for the accounting gas substruction and so you can see the step along the whole relay Journey on the different stages all right now I've shown your transactions now let's do a uh off ramping transaction we also have building Bank transfers so we can move money from um from onchain USC onto your bank account within Europe and the UK using faster

payment cycle instanta um and we can do it with USC at the interbank rate without extra fees so let's do that and see how quick that goes so I'm now going to offramp withdraw say five us to see into GBP continue all right now we have started an off ramping that might take a minute or two so I'm going to let that cruise around

in the background U while I show some other cool stuff um what I wanted to show next is the guys who are on stage just now um some of you might already have nosis pay card now you can have your nosis pay card on the go in your phone as well so you see down here in the middle there's a little card tab going to switch over to that and boom here's my nosis pay card here's my nosis pay card with my transaction history um I'm not going to read my card details cuz then you're going to empty all my 4.7 lbs on the card but if I click card details then you can see your your information so that you can get your card details on the go without without having a card on you um and you can add cach which links

out to uh a cross chain transfer so that you can top up your your card with URI or GBP in this case so now you can have on the go your nose's pay card um and see the transaction history and your details you can use it just like your an ordinary new bank cards side by side with your defar portfolio and by the way you can load them up in read only mode to begin with right like I did with un sparton so you can load up your nosis pay card and your portfolios and you can check your tokens and defa positions while you can also manage your nosis pay card all in one app on the go now I should mention because we use pass keys we're also AC crossplatform right I mentioned we're launching Android iOS and desktop right so here on

the computer I can now recover the same pasy wallet that I just created on mobile because it's cross device on stage Biometrics and here we go recovering this on desktop boom that's roughly how it works if you're yeah getting in your device you just recover it takes very little time no fiddling around calling your grandparents for seed faces just click recover and off you go on the new device um okay that's

it avilable today at z.a the permission free to the wallet for your everyday life questions [Applause] yes are there any restrictions on who can use this uh are there any restrictions on who can use this so um are are we are a software developer but we interact with a number of different

financial institutions that have licenses in different jurisdictions so that means if you want to use Bank transfers you creating an account with one of our partners and they have licenses right now in Europe and the UK and so you can do Bank transfers in Europe and the UK nosis pay country availability is the same as nosis pay obviously it's it's a card with them right so Europe and the UK um so primarily right now it's Europe and the UK um and we are expanding to other territories very soon but pass keys and selfcast wallets and all that that's without jurisdictions right and it's available in in all app stores not North Korea and Venezuela any other questions uh yes one do you provide any other options for

wallet recovery as well um for specific smart wallets we have uh a GDI recovery but we are sun setting that for pasy recovery so right now we are focusing on paskis for Recovery uh we do not custody anything we do not do any recovery we haven't integrated with the the broader safe recovery um Suite either uh we're focus on the the P key recovery which is done I should also mention in a self custodial way in that um we don't work with another service provider that stores the mapping for the the pass keys to your your your keys uh this is done with an onchain valid a contract so your your dependence in this case is Google and apple or whoever stores your your

pass keys but they're stored also in a way that they don't have access to those pay pass Keys any other questions all right try Zeal we're very excited to see what uh what but you all make use of it and Bridging the world between onchain and Real World Finance and I can watch for them they built something really cool thanks deep and yeah the withdrawal sometimes takes a couple more minutes it's been now probably five minutes so try it out and see if you can get it to faster awesome thank you so much Anis you have a round of applause please