The Optimist - Holyheld - Solving Crypto Payments

In The Optimist’s Twitter Spaces which took place on June 11, 2024, Charles hosted Anton from Holyheld to discuss integrating traditional finance with crypto, Holyheld’s innovative approach, and more! Read our notes below to learn more.

Background

Charles (Host) – Co-Leader at The Optimist

Anton (Guest) – Customer support at Holyheld

Holyheld – a Cash account with a debit card and personal IBAN that you control from any self-custody wallet you own

Bridging Traditional Finance and Crypto: Reinventing Self-Custody Wallets

Anton explains his background in traditional finance and tech, working on a bank’s core settlement engine team. He got into crypto in 2016, initially joining a startup called Humaniq. The startup aimed to tokenize people using Android and software biometrics, similar to what Worldcoin is doing now. Anton learned the importance of explicitly explaining the benefits of new technology to users.
Anton shares that he met his co-founder, another Anton, and they both became crypto-native around 2017-18. They realized that traditional finance had difficulty estimating risks in crypto, leading to a lack of acceptance. This realization led to the idea of Holyheld, which aims to turn self-custody wallets into pocket banks. After many iterations and experiments, they developed a simple yet impactful thesis.
Anton announces the recent development of a complex yet straightforward solution: enabling any self-custody wallet to function like a bank while adhering to both fiat and crypto regulations.
Anton explains the idea of creating a system that allows the two worlds (fiat and crypto) to operate independently but work together seamlessly. This innovation aims to turn any bank into a self-custody wallet with all the benefits and actions that crypto offers, effectively reinventing Holyheld’s approach.

Holyheld’s Innovative Approach: Seamlessly Integrating Crypto with Traditional Payment Systems

Anton explains that the main technical challenge is the difference in how traditional finance and crypto systems operate. In crypto, settlement and finality happen almost simultaneously, while in traditional finance, they are separate processes with settlement taking days or even months. He highlights that crypto offers more efficiency, speed, and programmability, but integrating these features with the existing financial system is complex.
Anton highlights that on-ramping and off-ramping are indicators of crypto being an enclosed system. Traditional systems operate on decades-old technology, and integrating crypto requires finding a way for both systems to coexist while maintaining their own rules.
Charles asks Anton to explain how Holyheld’s approach differs from traditional crypto debit issuers.
Anton explains that Holyheld’s system called Blockchain Reconciliation and Remittance Record (BRRR), allows service providers to connect their self-custody wallets to traditional payment systems without pre-funding or exchanging crypto beforehand. This seamless integration means users can use their crypto directly for real-world purchases, leveraging crypto’s unique features like collateralization, yield farming, and streaming payments.
Anton adds that Holyheld’s technology allows for the native use of crypto in traditional payment systems, enabling a more fluid exchange between crypto and fiat currencies. This integration simplifies the user experience, making it as easy as tapping a card to pay with crypto.
Holyheld provides the infrastructure for service providers to offer seamless crypto payment solutions, allowing users to utilize their crypto assets in everyday transactions without the need for complicated pre-funding or exchange processes.

Revolutionizing Crypto Payments: Holyheld’s Seamless Integration with Traditional Systems

Charles adds that users can now use their on-chain balances on various integrated networks, including the recently integrated Mode network. He highlights that as a Mode user, he can approve his Mode tokens for payments, tap his card, and the system will use the approved tokens to pay the balance.
Anton explains that BRRR allows for different responses to transaction attempts: failure, optimistic settlement, or finality. This flexibility lets service providers decide how to handle transactions based on their risk tolerance and business rules. The system prioritizes transactions with definitive outcomes and reverts those that don’t meet conditions.
For service providers, Holyheld abstracts the complexity of blockchain transactions into simple API calls. This enables actions like swapping assets or borrowing against crypto holdings to cover transactions, ensuring users can use their preferred tokens while service providers receive the desired fiat equivalent.

Holyheld’s BRRR: Bridging Crypto and Traditional Finance with Seamless Integration

Anton explains that Holyheld solves the problem of double regulations for service providers dealing with both fiat and crypto. He notes that many providers struggle with integrating crypto due to the complex regulatory environment and technical challenges. Holyheld’s approach allows existing companies with necessary licenses to connect to a unified clearing house, enabling seamless integration without needing each provider to become a crypto company.
Anton describes how Holyheld acts as a clearing house that unifies different networks and service providers. This system allows users to use their preferred networks and tokens while service providers can clear transactions according to their rules. Holyheld’s system supports optimistic settlement and finality, ensuring that transactions are secure and efficient. This approach enables interoperability and flexibility, allowing for seamless fiat-to-fiat transactions through crypto intermediaries.
Anton further explains that Holyheld’s Blockchain Reconciliation and Remittance Record (BRRR) is designed to ensure transparency and prevent tampering with transactions. By providing a robust and reliable accounting tool, Holyheld bridges the gap between the traditional financial system and the crypto ecosystem, enabling secure and efficient transactions across different networks and currencies. This system allows for the seamless integration of crypto into everyday financial activities, ensuring that transactions are transparent and verifiable on-chain.

Integrating Crypto and Traditional Finance with Authenticity and Innovation

Charles asks why the team decided to release their decentralized clearinghouse now and what impact it has on the industry.
Anton explains that Holyheld developed the tech to solve their internal problems and realized it could benefit others. They worked to make it unbiased, transparent, and verifiable, ensuring it could be useful to anyone. The timing was driven by the readiness of both their tech and the broader crypto infrastructure. Anton encourages collaboration within the crypto community, emphasizing that no single team can achieve mass adoption alone.
Anton highlights the difficulty of dealing with dual regulations for fiat and crypto, and how Holyheld’s system abstracts the complexity, allowing service providers to seamlessly integrate crypto without becoming crypto companies themselves.

Holyheld’s Vision for a Seamless Financial Future

Anton explains that Holyheld focuses on three main primitives: swapping, lending, and yielding. The smart contract registry allows protocols to register adapters to execute specific functions. For example, Velodrome could participate in transactions where users pay in one asset and receive another. This functionality extends to yielding, allowing users to use idle money to earn interest, which can then be used for payments.
Charles asks about the demand from service providers for crypto payments.
Anton responds that the biggest interest comes from native crypto companies and fintechs like neobanks and alternative finance platforms. Traditional financial institutions are interested but slower to adopt due to regulatory concerns and a strategy of letting others go first. Anton highlights that Holyheld aims to onboard crypto to every human, making it a part of everyday life.
Anton dreams of a future where everyone can experience the “aha moment” of using Holyheld’s services, regardless of their region. He hopes that in the future, there will be no more questions about availability, as Holyheld becomes globally accessible.

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Show Information

Medium: Twitter (Audio)
Show: The Optimist Twitter Space
Show Title: Holyheld – Solving Crypto Payments
Show Date: June 11, 2024