Smart Wallets for the Masses: How Zeal is Making Advanced Crypto Technology Accessible to Everyone
In Brief
Hannes Graah, founder of Zeal, discusses the evolution of cryptocurrency and OpenFi, highlighting the reshaping of traditional finance and decentralized systems in the financial landscape.
In this interview, Hannes Graah, the Founder and Builder of Zeal, shares his perspective on the evolution of cryptocurrency and the emerging world of OpenFi. With years of experience in the fintech space, Graah offers a unique view of how the integration of traditional finance and decentralized systems is reshaping the financial landscape and what this means for the future of money management and financial services.
How would you define the concept of “OpenFi,” and what makes it distinct from traditional DeFi models?
Crypto has transitioned from an underground movement with Bitcoin miners in basements to converging with mainstream finance. It’s been a gradual progression. The last iteration of DeFi was still quite focused on the crypto ecosystem and still needs to fully connect with traditional and real-world finance.
OpenFi is the final merging of these two worlds, allowing people to use a combination of traditional custodial finance services and self-custodial permissionless financial services. It’s similar to what open banking wanted to achieve – making banking more open and connected. That’s what OpenFi promises to do, and that’s its vision.
In what ways does OpenFi enhance the integration between on-chain and off-chain financial activities, and why is this integration crucial for the future of finance?
There’s been interest in making banking more open even before DeFi and crypto, with open banking aiming to make systems less isolated and more connected. DeFi is an acceleration of that trend, enabling more innovation. With permissionless finance, innovators from all over the globe can create building blocks on top of each other.
Instead of having heavily permissioned finance where you have to establish agreements and negotiate everything, with OpenFi or permissionless finance, you can build and combine. We see this Lego block composability happening in DeFi, but now it’s also happening with traditional financial components.
For example, you can now see Visa cards that integrate with DeFi protocols, which is a great example of combining something people are used to from daily finance with something from the crypto side of DeFi.
How do you see the current state of DeFi and OpenFi?
There have been various attempts to bring these worlds closer. A couple of years ago, we saw attempts like Compound creating permissioned pools, but not many things really took off. The largest moves into traditional finance were rather traditional players deciding to hold some crypto assets, which was more about asset exposure than really integrating the plumbing and pipes of DeFi.
But now we’re starting to see products being fully integrated. At Zeal, where I’m one of the builders, our mission is to let users decide whether they want custodial or self-custodial services, taking the best from all worlds and having one single place where they can do that.
It’s no longer two virtually isolated worlds. When people used to think about crypto, they thought of it as a separate thing, almost like a casino where you buy your chips, go in, do your things, and then cash out when you leave. But now, you can take your tokens – which can be stablecoins, not necessarily volatile – and use them in the real world. You can buy or sell with stable crypto.
What are the key challenges in developing a self-custodial finance system that can operate seamlessly across both off-chain and on-chain ecosystems?
There are several challenges on the technical side, but we’re now getting to the point where a lot of the key technologies are enabling these things. Five years ago, blockchains weren’t fast enough, they cost too much, there was no easy way to off-ramp and on-ramp, security was seed-phrase based – there were all these problems. But a lot of those key problems are now solved.
Now you can have highly performant transactions on-chain that are basically free, you can secure your wallet with passkeys and biometrics instead of seed phrases. A lot of those fundamental blockers are now solved. The challenge now is really about building product experiences that solve some of the finer journeys – not just can people interact with it, but do they want to interact with it? Is it a nice experience?
How does the concept of self-custody in OpenFi address the security and trust issues that are prevalent in centralized financial systems?
Self-custody exists in both traditional finance and DeFi. In TradFi, it means holding bills and coins, which has some risks. The trust issues with custodians are about whether you trust them with your assets. In crypto self-custody, you still have challenges, but they’re of a slightly different nature.
Some people see self-custody as a benefit, while others don’t want to be responsible for all their assets. That’s why OpenFi is important – it blends the worlds of TradFi and DeFi, letting people choose what they want to do with their assets. It doesn’t force users to self-custody everything, which can be problematic, nor does it force them to centrally custody everything, which is equally problematic.
People should be able to decide what they want to take control of themselves and where they want to trust someone else. Before, crypto was forcing everyone to self-custody, and TradFi was forcing everyone to central custody, but now, with OpenFi, people can choose how they want to manage their assets.
How do you foresee OpenFi addressing the user experience challenges that we currently see related to smart wallets?
As a wallet builder, this is one of the key things we’re solving. OpenFi, more broadly as a movement, is not just about wallets – it’s the general world where we’re combining traditional and decentralized finance, letting people decide what they want to do.
From a smart wallet builder’s point of view, we see lots of technical benefits of smart wallets, but we have to make those benefits work well for regular people, not just institutions or technocrats. Safe smart wallets and accounts have been around for several years, but they haven’t been retail-friendly.
What we’ve built over the last two years is to take those powerful underlying technologies and make them easily accessible without compromising security and integrity.
What role does interoperability between different blockchain networks play in the success of OpenFi solutions?
We don’t yet know long-term whether one blockchain will dominate or if we’ll have a multiverse of blockchains. We’re not opinionated about which way it will go. I think we’ll always have multiple blockchains, but whether one or a few will get 80% market share is too early to say.
As a wallet builder, we support multiple chains – we have ten networks on which we support smart wallets, and we support traditional wallets on every EVM under the sun. Long-term, what needs to happen, whether on one network or several, is that we need to abstract the chain complexity from a user experience point of view.
Similar to how someone using Revolut doesn’t know whether it uses AWS or GCP, blockchain networks should be abstracted so that users focus on what gives them value without having to care about the technical stack underneath.
How do you see OpenFi evolving in terms of its ability to support complex financial instruments and services?
We’re speed-playing hundreds of years of financial ecosystem development in the span of decades in DeFi and OpenFi. Traditional finance developed over thousands of years, and now we’re fast-forwarding through all that development in a very short period.
The products built on blockchains have been constrained by the underlying technology, but now we have more advanced blockchains that remove technology as a blocker. We’re seeing all the traditional finance products happening either in pure on-chain versions or in hybrid on-chain plus real-world solutions.
We’re seeing real-world asset protocols that work with under-collateralized lending, combining the best of both worlds. The holy grail is something like under-collateralized lending, where someone gets a mortgage on-chain. There are some proof-of-concepts of that, but when you get into real-world assets, you get into real-world enforcement and compliance issues.
That’s where traditional players are now entering and creating possibilities between on-chain and real-world finance.
What are the major barriers to mainstream adoption of OpenFi? What strategies can be deployed to mitigate these barriers?
The OpenFi movement is an umbrella term for enabling connections and seamless integration of the two worlds. The key question we should ask ourselves is how we can deliver more value to people, either as individuals or in combinations like companies or entities. We need to consider the best tools, whether on-chain or off-chain, to achieve this and how we can deliver this to users.
The barriers for us builders are to really embrace both sides and break down these barriers. We talk about concepts like “ramping” – off-ramp and on-ramp – which almost implies a difference in altitude. But it’s more about moving horizontally between different accounts. It’s just one world with different accounts.
How do you see OpenFi shaping the next generation of financial services, and what are the key milestones that will define its success?
Success will be seeing products that have runaway success where there’s a component of on-chain transactions and real-world finance under the surface, but without making a big deal out of it. As long as we have to shout out that we are crypto or this or that, we’re still in the early stages.
The biggest key milestone will be when we have a multi-million person user application which uses crypto under the hood, but people don’t realize it – they just use it because they get value out of it. They’re not using it to get an airdrop or anything like that, but because it’s the best wallet to pay their rent with, buy coffee, or receive their salary. It just happens that part of it is on-chain and part of it is off-chain.
How can we attract more new users to the OpenFi industry?
The key is to focus on what moves the needle for people – deliver value to them. We’ve solved all the hygiene stuff like security and performance of blockchains, but now we have to deliver great value propositions. We need to create things that people want to use because it somehow makes their life better, not because it solved technical problems.
Classic indicators of value include getting more value for payments, higher interest on deposits, lower returns, or higher cashback on payments. But there are also things like better UX, easier to use, and more convenient to use. As builders, we need to solve these issues using the best tools, whether on-chain or off-chain, to deliver that value back to people.
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About The Author
Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
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Victoria is a writer on a variety of technology topics including Web3.0, AI and cryptocurrencies. Her extensive experience allows her to write insightful articles for the wider audience.
