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In today’s rapidly digitizing world, financial services are transforming, and noncustodial finance, known as NoFi, is at the forefront of this change.
This emerging trend is more than just a buzzword; it’s a paradigm shift that could bring cryptocurrency into the mainstream.
A recent article by Ben Basche entitled “Noncustodial finance is crypto’s way across the chasm — Superstructure,” offers insightful perspectives on how noncustodial financial apps, or NoFi, could help catapult cryptocurrency from a niche market to mainstream adoption.
Imagine a world where your wallet, with its money or assets, doesn’t rely on a bank.
Instead, it’s part of a vast, secure network operating beyond traditional banking systems.
This is what noncustodial financial apps, or NoFi, aim to bring to the table.
They’re like your everyday payment apps, but with an extra layer of freedom, operating on blockchain or Splitchain technology.
Apps like Slingshot (a cross-blockchain DeFi wallet for buying, selling, swapping, and storing crypto), and Beam (a global, digital wallet that lets you send money to anyone, anywhere, instantly), are gaining traction because they’re user-friendly, just like PayPal’s Venmo mobile payment service, but they operate on blockchain technology.
There are also noncustodial online-first banks sprouting up, called noncustodial neobanks. These include Decaf and Paie, using the Solana blockchain.
These digital banks offer traditional services, such as lending, borrowing, and trading—but in a more flexible, decentralized manner.
The game-changer here is the noncustodial wallet, which puts you in control of your finances, eliminating the need for middlemen.
PayPal, for instance, recently included support for Ethereum smart contracts, enabling blockchain users to run decentralized applications (“dApps”), on their recently launched stablecoin and an integrated wallet.
Noncustodial finance apps are another way to potentially catapult cryptocurrency from a niche market to mainstream adoption.
They offer control over funds, global accessibility, high security, privacy, compatibility with various services, integrations, no chargebacks, and transparency.
So, as we stand on the brink of a financial revolution, NoFi might be just another way to unlock crypto’s full potential. Read more here.
Building Infrastructure For The NoFi Industry
Zucoins has focused on non-custodial solutions for a long time.
It’s baked into the nature of the product—the Zucoins wallet app itself.
The Zucoins wallet app stores all of the data on the device itself.
It’s also why doing your own backups is so important too, there’s no company managing your personal wallet data in a central place to recover important info, like your private keys used to sign transactions.
The NoFi industry, though goes well beyond non-custodial purposes though.
They are moving into decentralized crypto lending and many other financial services that users might find useful extensions to underlying systems.
While Zucoins have their own internal focuses and aren’t focused on areas like these, there appears to be a growing industry there.
Splitchain could be a solid fit for a NoFi ecosystem group to pick up.
There are big questions about regulators increasingly getting involved in these areas, as they move into financial services (as lenders, etc, will most likely fall under existing financial services rules), but for those willing to navigate that route and get authorized financial services licensing, it’s worth looking into.
Zucoins itself is focusing on its core edge—the self-managed crypto wallets with simple and reliable real-time peer-to-peer transactions, using Splitchain’s network, with no fees and its ongoing work on decentralization.
One area of Zucoins’ increasing decentralization efforts is to provide more tools, resources and education to industries such as these and many more, so they can uniquely position their own solutions on top of Splitchain’s network protocol, in their respective markets.
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All the best,
Peter & Rob
Disclaimer: Of course, this is not advice, financial or otherwise. It’s also important to consider the risks and challenges associated with any potential benefits.