Noncustodial finance is crypto's way across the chasm

While DeFi, NFTs and the Metaverse form the basis of an exciting new crypto-native internet, crypto/web3 as a going concern (let alone a new technological paradigm) won't be sustained unless it connects with the needs of everyday people and breaks out of its own self-referential niche. Luckily for everyone who has pitched the crypto financial utopia at Thanksgiving, after years of only being the “future of finance,” it seems that crypto is finally starting to see a flourishing of applications focused on consumer-facing, everyday financial applications built with blockchain technology. This rising tide of “noncustodial finance” or NoFi applications are showing the way to an opportunity for crypto mass market adoption hiding in plain sight. Impossible without the innovations in settlement, scaling, smart contracts, wallet infrastructure and DeFi protocols, NoFi apps are building on top of the LEGO blocks laid down by the first few waves of speculative crypto adoption. While there are generously 5 or 10 million people transacting on blockchains every month right now, the addressable market for general financial services is (unironically) in the billions.

Convergent evolution

Early on in the adoption cycle of new technology paradigms, we often see convergent evolution around similar ideas and problem spaces, with sometimes slightly different solutions and assumptions. I've highlighted this before in a blog post about the different ways in which the wallet experience stack, which represents a convergence of the b2b middleware ecosystem in web3 around wallet-enabled identity and commerce, is approached by a diversity of players. We see something similar here in the consumer finance side of web3, with wallets, payment apps, neobanks and centralized exchanges all converging around some common obvious use cases enabled by blockchain rails that have actual teeth. Let’s take a look at some examples.

Noncustodial payments apps

One of the ironies of crypto has been that payments, perhaps the most obvious canonical example use case for crypto from the days of its inception, has found itself among the last use cases to actually develop and gain traction. Payment in volatile assets like Bitcoin and ETH were obviously niche activities and have sustained things like DeFi and NFTs, but it has only been with the advent of stablecoins and cheap blockspace that blockchain payments have finally begun to have their day in the sun. The crypto wallet’s most basic feature - the ability to send tokens - is finally ergonomic enough to be delivered in a web2-caliber experience. We see a number of apps and infrastructure focusing on enabling this now, with slick consumer “crypto Venmo” and global payments applications like Sling and Beam from Eco. There is even a community behind the quasi-meme $SEND token crowdsourcing and building an AA-enabled p2p payments app. Rather than crypto wallets, these apps look and function more like slimmed down versions of an early Cash app, and are typically focusing on either p2p payments for students and young people, or for expats and people sending remittances from abroad.

Noncustodial / semicustodial neobanks

While some of the emerging noncustodial fintechs are positioning for a narrow payments use case (a giant one in and of itself), others are taking a more holistic approach to their offering, complementing payments with features like additional yield on stablecoins, crypto multi currency accounts, investing features and combined crypto-fiat accounts with integrations into the traditional banking and card systems. The likes of Decaf and Paie come to mind (both Solana apps), as well as the forthcoming IBAN linked smart contract wallet coming from Obvious. Even the government in exile in Malaysia is turning to Polygon for a noncustodial neobank for its citizens called the Spring Development Bank. These are centralized entities, to be clear, and while they straddle the traditional, KYC’d financial system on behalf of their users in their centralized capacity, their fundamental functionality and value proposition consist in the user interacting onchain with their non-custodial wallet (or semicustodial/MPC). Many of the things you used to use a bank (or a challenger bank) for are starting to go on-chain, and these noncustodial neobanks provide a simplified interface to leverage all the power of onchain lending, borrowing, yield and trading protocols in a slick UX. In some cases, noncustodial neobanking functionality will be paired with traditional banking functionality, but as more and more of the financial “jobs to be done” of the user move onchain, the tradfi banking system (like centralized exchanges are starting to look right now to crypto users) starts looking more and more like a dumb on/off ramp.

Neobank 2.5

While most of the noncustodial payments apps and neobanks so far are new crypto-native startups, we are also seeing significant activity from the existing neobanking / challenger bank side of the space, taking the form of both existing neobanks spinning up non/semi-custodial wallets for their users and offering crypto services, as well as custodial crypto-focused neobanking and investing models that offer similar services but in a custodial form. Not quite full web3 noncustodial neobanks, but utilizing either blockchain technologies directly or indirectly to provide their services, we can safely call this category our “Neobank 2.5s” Cenoa, based in Turkey and focused on geos including Turkey and Argentina, offer a custodial solution for accessing dollar stablecoins and onchain yield protocols in a slick consumer app as an inflation hedge in countries hardest hit by local currency volatility. Most recently (and perhaps importantly) is of course PayPal, which has extended its crypto foray from custodial buying and selling of crypto to an EVM-based stablecoin and accompanying embedded wallet. , similar to Yellow Card in Africa. And besides the quintessential FinTech itself becoming a crypto neobank, we have Brazil’s NuBank, Germany’s N26 and the UK’s Monzo and Revolut and the American Cogni on similar paths. Neobanks operate in a competitive environment as the ostensible challengers to the stodgy consumer banks, and in crypto they find themselves on the backfoot from challenger to challenged. They are responding to that challenge and opportunity by doubling down on crypto services, and becoming hybrid tradfi-crypto neobanks. It would not be shocking to see their bigger cousins, the traditional consumer banks, start to think similarly.

Centralized exchanges

Centralized exchanges are some of the oldest “applications” for crypto, and while they are the epitome of “centralized” in a crypto context, they are doubling down on their own noncustodial wallets and quasi-superapps, and serving more and more of these “fintech” crypto cases with even their centralized rails. Binance Pay (very often Tether or TronUSD denominated) has significant remittance corridor and emerging market traction and everyday usage, particularly in Latin America. Coinbase’s USDC yield offering in their main app and staking aggregation in their Coinbase Wallet app combine with their semi-payments focused L2 launch in Base (Beam Eco for ex). Centralized exchanges are in a great position to offer financial services to their existing users, and have invested in growth areas like standalone wallets to capture more and more of this emerging set of use cases.

While the exact scope and approach may very, all of the above players are starting to converge around - what is that? Could it be ? Actual consumer crypto fintech use cases with early product-market fit?

Users and Use Cases

Much has been written about the early adopters in the crypto-native economy, but the most important cohort of users to reach next for crypto is obviously the “early majority” in Geoffrey Moore’s parlance, a group for whom everyday financial products can finally be meaningfully addressed. In order to move from the early adopters to the early majority, a technology paradigm needs to “cross the chasm” of early adopters trying to see the value in something new, to the early majority of people just trying to get things done in their lives.

Moore also describes the process by which this usually occurs, wherein first a set of vertical use cases emerge as a set of “bowling pins” which get traction and can later be “knocked over together” as adjacent use cases provide ample opportunity for horizontalization and generalization. It all comes to a head in the “tornado,” when these early use cases get swept together in a huge adoption pull from the early majority, creating huge consolidated winning platforms and a deluge of applications finding product-market fit. In our noncustodial finance world, we’re seeing the following bowling pins emerge, which give us some hints as to what the tornado might look like.


As mentioned earlier, despite the Alice-and-Bob obviousness of sending value from person A to person B that crypto’s very design intimated, for years, crypto payments amounted to not much more than a novelty or an implementation detail of some very crypto-native niche application (or crime). The canonical reference use case for crypto doesn’t even have any real traction, as goes an inside joke in crypto circles. But that is rapidly changing, first funnily enough with real traction by Tron and Binance in emerging markets with everyday payments, and now more and more of the crypto application layer is trying to reorient around “it just works” consumer payments using blockchain rails. A key catalyst here of course has been the advent of stablecoins like USDT, BUSD and USDT, which represent crypto’s first killer “ meta-app” as stablecoins feature prominently throughout the rest of the noncustodial fintech space. Broadly we can slice the kind of payments traction that crypto is seeing into two nearer term buckets and one more medium term one - p2p venmo-like payments, remittance corridor payments and b2c payments. A web3 Venmo is perhaps the most obvious crypto dApp to imagine, but really only with the advent of stablecoins, cheap networks and layer twos and seedless self-custody and account abstraction is the full capability and benefit of crypto being brought to bear in a consumable way. Those same benefits apply to international or remittance payments, with remittance corridors like Latin America<>US and Africa<>Europe beginning to see significant flows of crypto remittances.

Inflation resistance

In emerging markets in particular, inflation resistance goes hand in hand with payments and remittances. The major factor here again is the stablecoin - particularly the dollar stablecoin - as people in countries with weak or volatile currencies seek ways to preserve their wealth. Latin America is again the earliest on this trend, as can be expected given its bumpy monetary context, but we are seeing it everywhere people want to hold the gold standard in value preservation - the US dollar (no goldbug trolling intended). NoFi apps can offer basic access to dollars to anyone in the world (often in an easier/cheaper way than traditional forex rails) so long as they can onramp them in some way from fiat. These dollars can be held, put into interest bearing accounts, sent to anyone with a compatible wallet worldwide at an increasingly low cost.

Save / Earn

Everyone who has any extra cash is someone who needs to store and save that value somewhere, and we are seeing NoFi applications leveraging the onchain primitives for yield and interest accrual in easy to use, consumer-friendly interfaces. While onchain rates had been low for a while, more aggressive interest from centralized stablecoin issuers to match the offchain fixed income environment has pushed onchain rates closer to those of offchain money markets. Even without a huge base interest rate advantage over savings account rates (as DeFi had during its speculative mania phase), the variety of different permissionless yield products that are (relatively) safe still makes it a powerful way for people to grow their savings. DEX LP positions for stable or blue chip pairs, conservative money market positions, stablecoin risk-free rates, conservative yield aggregator strategies all provide potential onchain yield sources for NoFi apps to proxy for their users, both for their stable assets (thereby multiplying the inflation hedge use case in those situations) and for any volatile/investment assets. We see the outlines of this experience in apps for UX-conscious web3 natives, like Instadapp and Zerion, who make depositing into yield-bearing positions one or two clicks, and consumer apps like the aforementioned Cenoa turning it into a completely simplified “Save” feature.


Onchain borrowing is a bit harder to bring to consumers than lending due to the fact that most credit in the world is under/uncollateralized, but we are still seeing interesting progress and innovation. NoFi apps have yet to go all-in here (other than really Binance, who does crypto loans for its users), but we can expect that to change pretty quickly as progress is made on the underlying protocols and can be passed through to interfaces. MakerDAO’s Spark protocol offers you the ability to borrow DAI at a fixed 3.19% interest rate (and spend it with your optional linked debit card), which is pretty attractive in today’s environment, so long as you’re OK putting up double the collateral of your loan. It will be interesting to see if this attracts any retail borrowers who are otherwise priced out of personal loans from banks in the current interest rate and credit score regime, and want to lock in a low rate loan to make a purchase without actually spending money. Alchemix offers the “self-repaying loan” - something which might end up being a good fit for buying something like a car or making a house downpayment. DeFi protocols like Goldfinch are getting deeper into undercollateralized lending for offchain businesses, an idea which could conceivably scale to millions of small businesses, and the learnings from which will definitely inform the next round of people trying to build more and more accessible credit applications, whether they be oracle-based uncollateralized models, post-Sybil reputation models or innovative new collateralized lending protocols with more attractive properties to retail borrowers. The “final boss” is the opaque, centralized, orwellian credit agency and traditional bank credit ecosystem, and as soon as DeFi comes up with a better solutions, NoFi will be able to surface it to consumers.

Forex / MCA

For certain cohorts of users, like students studying abroad, expats, freelancers and digital nomads, dealing with multiple currencies regularly is a fact of life. Getting paid in one currency but needing to send home your home country’s currency, needing to pay for a SaaS application in another currency, having multiple clients or gigs paying you in multiple currencies are all situations where quickly exchanging money between fiat currencies is a must. Doing this through the traditional banking system may be cumbersome, slow, and expensive, and for certain people, the administrative overhead might actually be prohibitive. Stablecoins and DEX’s delivered through NoFi applications offer a way for people to have a “crypto multicurrency account” with multiple stablecoins that they can send, swap or save depending on what they need to do with it. MCAs have become a popular feature of non-crypto fintech/neobanking applications in these same cohorts, and one would expect the two sets of use cases to start to converge over time as more crypto neobanks focus on these use cases and existing fintechs start exploring blockchain rails as an alternative to their own cost and operational structure.


Trading is the first and core use case of crypto, so we won’t spend much more time on it here, other than to point out that access to investing and even trading risky assets is something that the tradfi fintech world has been pushing for some time (think Robinhood) on the equities side, and its a legitimate user need that NoFi fintech applications will obviously provide for their users. DEXs, bridges and aggregators make it relatively simple for consumer applications to offer ononcustodial trading of cryptos to their users, allowing their users to take some risk exposure. And with the advent of more tokenized RWAs coming onchain, the prospect of toffering rading everything onchain from a single app - cryptos, equities, forex, real estate and fixed income - becomes an obvious one for NoFi apps. If you already put enough of your inflation-hedged digital dollars in a yield bearing DeFi protocol to meet your monthly savings goal, why not simply ape a little into the latest memecoin crypto or stock with the leftover from the same application?

Implementation patterns

Convergent evolution around the problem space is, of course, accompanied by convergent evolution around the solution space. As we see are finally seeing NoFi applications that can reasonably compete for a mass market TAM, we see some common threads that underpin the different approaches. Let’s start with the stack at a high level, from the settlement layer all the way up to the app layer, and then zoom into some key tech themes that are coming up.

The NoFi stack
The NoFi stack

MPC, account abstraction and other seed phrase elimination

It’s clear that the next billion users will not be safely storing 24 word phrases, and the crypto industry has largely taken this meme to heart over the last 12 months and cranked out a number of different implementations, standards and SDKs to help dApp developers deliver a web2 style login experience with a crypto wallet. I wrote about this space extensively in The Wallet-Centric Experience Stack, but it is worth reiterating the importance of secure self-custody solutions which give web2 style login and recovery capabilities to the development of the NoFi application layer. Whether the exact implementation is MPC-based, smart account based or a hybrid of the two, NoFi apps are taking advantage of the latest and greatest in wallet experience stack middleware innovations and bringing them to the masses. Eco from Beam uses ERC-4337 compatible smart accounts and account abstraction infrastructure on Optimism (and soon Base) to deliver both a seedless onboarding flow and a sub 5-cent payment experience that can be accessed via a link even if the user has never setup a wallet before.


As a known Ethereum mosti, it pains me to praise Solana, but I have to give credit where credit is due. Sling, Decaf and all run on Solana, and they are probably the 3 slickest NoFi apps in existence right now. Solana has obviously always had the right cost properties for retail payments (despite decentralization tradeoffs), but what stands out about Solana’s outsized presence in the NoFi space is the quality of the application builders and the orientation towards everyday user value. So, even though Ethereum’s rollup ecosystem is rapidly catching up to Solana on cost and speed, Solana’s app ecosystem is arguably a step ahead in terms of innovating on NoFi UX. app store screenshots app store screenshots

Zaps, metatransactions and intents

Without getting into a gigantic detour on the topic of blockchain intents and the future of MEV, I will just mention that the general concept of packaging multiple onchain actions together for easy transacting on behalf of the user is not just going to be something that degens take advantage of to get the best limit order price. Be they onchain “zaps” or recipes of multiple transactions to be executed together, or signed offchain messages representing what the user wants, NoFi apps will be able to take advantage composing multiple kinds of transactions and transaction-like orders to simply give the user what they are looking for. It won’t be long before we see these little frictions polished away in NoFi apps with buttons like “Swap into USDC and save” or “Swap into ETH and stake.”

Straddling crypto and tradfi banking and payment system

Another implementation theme we’re seeing in this NoFi wave is the blending of crypto and tradfi in a few meaningful ways. One is that often the entities operating these apps are able to add additional value by entering into a banking relationship or a relationship with some banking infrastructure provider. The ability for noncustodial neobanks, which are themselves really just 95% noncustodial wallets, to layer on fiat-to-crypto services and bank accounts is being utilized in order to deepen the kind of value these apps can provide. Being able to receive a portion of your paycheck into your noncustodial wallet automatically makes all of the other services within that wallet more valuable and essential, and being able to spend your crypto at the grocery store with a swipe or a tap extends it even further. Users are giving up measures of anonymity when they KYC themselves to use these services, but for most users - real life is already “KYC’d” and this simply helps crypto fit into their life better. With players like Visa and Mastercard already experimenting with payments using smart accounts and account abstraction on the EVM, the hybrid world where onchain and offchain are interlinked in an easy interface for users is becoming more and more prevalent.

Tokenized real world assets

As was alluded to before, more and more high quality real world assets are moving onchain, enabling new kinds of consumer financial products that otherwise weren’t possible. The most obvious and immediate way this is happening is through stablecoins themselves. Issuers like Circle and Tether are printing money with the billions they are able to put into short term paper, and they are increasingly passing that yield from Treasuries and other short term offchain securities to onchain stablecoin holders. Another example of this is the recent wave of onchain US treasuries that crypto investors can tap into from the likes of Ondo Finance. While you need to be KYC’d (and there are geographical restrictions depending on which product of theirs you want to use), once you have been you are able to get a juicy yield in an ergonomic onchain wallet with none of the clicking around through a confusing brokerage application. The more valuable real world assets are tokenized and brought onchain, the more potential financial products they can spawn for regular users.

Why now?

To understand why we’re now seeing this explosion in traction in these use cases (love it or hate it, TRX chain has 2 million DAUs) and entrants as serious as PayPal, we need to look to a few factors coming together to push things forward.


The first and most obvious reason why NoFi is taking off now is the maturation of the stablecoin ecosystem. Digital dollars (and increasingly other fiats) are arguably the killer application of blockchains so far. As we have talked about throughout most of the examples, stablecoins are the lifeblood of actual everyday commerce in a way that volatile crypto definitionally cannot be. Digital frictionless fiat is making its way into all kinds of applications, locales and niches. The traction is accelerating, not slowing down, with Circle alone having over $700m in revenue in the first half of 2023 on their 26 billion circ supply USDC, already surpassing their 2022 revenue total. Tether is making so much money they might become a systemically important holder of US treasuries if things continue. And far more important than giant aggregate issuance or revenue statistics is the adoption by everyday users and businesses to do mundane and necessary things as mentioned above, particularly those who were previously un/underbanked in developing markets. We’ve yet to see the explosion of their use in the mainstream in developed markets, but there are reasons to believe that could change (more later).

Maturity of scaling solutions

I don’t want to declare victory on the trilemma for practical purposes too early in the scaling wars, and there is still a lot of architecture, engineering and decentralization to be built out in the blockchain scaling ecosystem, but we are nearing the end of decentralized blockchains being too expensive and cumbersome for everyday use. Solana has been at negligible transaction costs for a while, and the Ethereum ecosystem’s Manhattan project style bet on the rollup-centric roadmap is finally bearing real fruit. We’ll see not only a drastic reduction in rollup costs from EIP 4844 and all of the scaling gains in the zk world still to be eked out, but have also seen the creation of a flourishing L2 infrastructure ecosystem, to the point where applications will be able to easily spin up dedicated “rollapps” for their application for maximum control, performance and monetization. Crypto in general and Ethereum in particular went through a “dark night of the soul” on scaling, and those efforts are bearing fruit in consumer-grade “good enough” L2s for nearly any use case being basically being one hard fork away. NoFi applications are therefore launching into the most permissive blockspace environment in the history of crypto, with multiple good and improving options to choose from in terms of network.

Innovation in the wallet stack

As mentioned a bit above, technologies like MPC, account abstracted smart accounts with gasless transactions, and products like Privy and Web3Auth which tie the entire “wallet stack” together have given app developers looking to build crypto functionality with deep native wallet capabilities much easier. The next round of crypto neobanks and noncustodial fintech apps will not need to worry about users’ seed phrases or the need to already have a wallet installed. Not only are these blockchains finally cheap enough to use, you can add the ability for your app to interact with them frictionlessly with the most advanced smart account functionality in a few lines of JavaScript.

Macro tailwinds

Stepping back from crypto itself to the context in which it operates, we can see that the world around crypto is heading in directions which make this kind of NoFi innovation more attractive and necessary. Inflation volatility has returned with a vengeance, and particularly in developing countries with weak currencies, the desire to hedge exposure to international and local inflation volatility is growing. E-Commerce is trying to penetrate through all corners of the earth, but is finding difficulty in areas where local banking and payments infrastructure is weak, or where lack of internet access has disincentivized traditional fintech innovation. And the long, boring march of market efficiency runs right through the disintermediation of centralised (read: expensive) intermediaries in an unassailable way. Every cent that can be squeezed out of financial transactions and coordinated trust through smart contracts will be.

Blockchain as a vector of competition

All of the above factors and more have converged to imbue blockchain with being a “vector for competition” in multiple ways for fintech apps to compete. Instead of speculative future value or ideology, crypto is beginning to bring cold-hard practical reality into its value proposition in this emerging NoFi space.

Transaction costs

Centralized intermediaries have certain margin needs, and the more centralized intermediaries that are stacked up on one another to move value from one place to another, the more of that margin is taken from consumers and businesses. Blockchains are able to subsume intermediaries into smart contracts and do far more with far less in a fundamental way. In no other area is it more apparent where crypto is beginning to win than in the reduction of transaction costs for international payments. What costs me nearly $100 in fees to send via the international wire system across two countries costs less than a dollar when sending via USDC. As gas and scaling become less and less of a foreground concern, this strict transaction cost advantage of crypto rails is going to permeate through every potential service offering to consumers and businesses, and every margin that is able to be recuperated in this way by those who use blockchain to do it will be. There is likely a lot more “margin” that autonomous DeFi protocols can design out of finance, which NoFi apps can pass along to consumers with better financial products.


Bigger than simple interoperability, composability refers to the way in which different pieces of the ecosystem can be plugged in to one another to create higher order and more complex value. Starting with the most basic, NoFi products based around EVM wallets instantly gain the ability to pay any other EVM wallet on any chain, interact with DeFi protocols, read from identity NFTs from other applications, and create their own EVM based application logic which uses the wallet, all the above and more. While this is a bit of an abstract property, and it goes hand in hand with interoperability and network effects in general, crypto’s unique composability allows for the combination of services towards a greater end customer value. When combined with the next property, permissionlessness, NoFi builders have an enormous sandbox to plug into immediately when they enable their users to connect to the blockchain, and can easily enable trading, lending, borrowing, payments, or anything which combines them or builds on top. I talk more about composability as a web3 superpower here.


When building a fintech app, integrating with other complimentary providers or value added services can be a cumbersome, expensive and time consuming process. Integrating with crypto protocols is entirely different - because while there may still be rough edges around the DX of working with some of these protocols, the fact remains that anyone worldwide can add a basic “savings” feature to their app if their app is a wallet and they plug in to Compound or Aave. This kind of permissionless integration leads to faster innovation cycles and a broader variety of potential building blocks for compelling financial products and experiences.

Reduced business footprint and liability surface

One of the more interesting aspects of noncustodial finance that make it an attractive approach for fintech players is the way in which noncustodiality, by its very nature, creates a different separation of responsibilities between the user, the developer and other services. Hand in hand with the permissionlessness above, noncustodiality not only reduces the initial upfront friction of integrating something like DEX trading into your app, it (in many jurisdictions) makes it legally and regulatorily able for you to do so in the first place, relative to integrating something like traditional equity trading. The same applies to things like lending and borrowing, activities reserved for your tradtional bank typically, but which through DeFi protocols are accessible to anyone with a wallet (including your customers). NoFi apps can offer a suite of financial services, BD licenses, MTL licenses, even banking licenses themselves can be avoid if you are thoughtful about what you can offload to the chain (and your exact jurisdiction) and third party providers like regulated on/off ramps. There are even experiments with a more decentralized way of doing wealth management onchain with actual advisors (though again, this is not legal advice). This completely flips fintech app development on its head, as it implies a much broader potential range of entrants into the financial services space. By minimalizing the offchain footprint of the business and making money through things like interface taxes on transactions, NoFi apps can de facto enter markets that they de jure could not in a non crypto way.


Wait, UX is a potential selling point for cypto fintech services? I thought it was the one and only thing holding us back from mass adoption? Without minimizing the work that still needs to be done to improve crypto UX, we can actually start to expect significant UX benefits to crypto rails over non crypto rails as time goes on. Take login and payments for example. It will take a certain critical mass of applications who already support crypto and users who already have wallets for this to fully be realized, but the ability for people to just simply connect with a wallet and pay without entering any additional information because they control their private keys is going to result in a better and better experience than web2 over time. Instead of a ton of annoying wire transfer screens from your bank to send a payment internationally, an instant crypto payment could be fundamentally less taps than even its fastest web2 counterpart. For now, UX is working against crypto as much as it is working for it, but that is soon going to change (for some of the reasons mentioned above), leaving the opportunity for the fundamentally inverted sovereign UX that wallets imply to win consumers over on mere ease of use.

What’s next?

NoFi is starting to hit its stride, and I think we should expect the number of players vying for this opportunity to grow by an order of magnitude in the coming years. Not only will it become a very competitive space, but it will merge with the existing competitive dynamic in fintech and neobanking, and the two will become one dynamic. It’s hard to say exactly who the winners are going to be, but there are a few future directions worth paying attention to.

Social and social finance

Almost in parallel to all of this NoFi stuff is a burgeoning decentralized social networking ecosystem, much of it centered around crypto. Protocols like Lens, Farcaster and BlueSky are going to open up entirely new design spaces for social apps, and as that explosion in social networking design inevitably comes with business model innovation for people like content creators, the financial side is likely to meld with the emerging NoFi meta. We have in the last week seen a very interesting experiment coming from deep within crypto twitter around social tokens in, and while still very early and niche, as more and more innovation happens in so-called “De-So,” there will be an interplay with NoFi in both directions. Perhaps the most impactful example of this would be what happens if Twitter/X gets into crypto payments. There are also experiments going on around community finance, micro credit and social insurance and UBI schemes onchain that finally are technically simple to implement, and we should expect to see finance made multiplayer in ways that solve actual real world problems for people.

B2C messaging and conversational blockchain commerce

Messaging protocols like XMTP are finally starting to get adopted not only in consumer wallets like Coinbase Wallet, but also b2b focused experience stack providers like This is beginning to hint at a very powerful set of commercial use cases possible with all of these connected wallets, ones which involve conversations between consumers and either dapps or even merchants. Conversational support, sales and marketing will make its way into wallet-delimited commerce and bring additional layers of consideration for NoFi apps. Do they become b2c platforms themselves (as Decaf is doing, with its consumer wallet and merchant crypto PoS solution) or do they try to become universal clients for blockchain commerce, supporting transactional messaging on behalf of the user’s allowed applications? This opens up an entirely new space of trusted commercial communications, something which is becoming even more dire as AI clogs up all of our digital comms channels and spammers become ever more effective.

Experience stack providers focusing more on NoFi as a use case

I expect the wallet experience stack providers mentioned throughout this piece and my other writings to focus on NoFi more and more as a vertical. Beyond gaming, NFTs and traditional DeFi, these consumer facing financial applications are a perfect fit for the value proposition of middleware products who sell a web2 caliber experience on top of web3 rails. This focus from the 40+ well funded companies and projects in this space will lead to better and better solutions for NoFi devs, and more killer apps.

Traction in developed markets finally arriving

Much of the early NoFi progress has been in emerging markets, or involves people with a tie to those emerging markets. This makes intuitive sense, as usually they are the least well served in a particular kind of market, with rich countries having oftentimes overserved consumers. But as all of the above forces work through the system, we will see more and more innovation happening in markets where the consumer is overserved on some obvious dimension, but underserved on some non-obvious one. This could very well take the form of innovation happening in developing countries making its way back to more developed ones.

A noncustodial super app

Finally, while this post presupposes a plethora of different NoFi apps with different approaches, it is very well possible that this bundle of financial “jobs to be done” gets rolled up by a few dominant players who create “non custodial super apps” in the vein of WeChat or GoTo. These apps could not only do everything mentioned above, but tie together the entire decentralized internet with some kind of dApp browser (or, more likely, a “mini programs” style mini app framework). General web3 wallets certainly hope this to be the case and many are raising on it as a thesis, and while I think its possible that we see one of the current crop of web3 all-in-one wallets reach super-app scale and scope, I think it’s probably more likely it comes from either the existing gigantic tech players and smartphone manufacturers, or NoFi apps starting with a much more focused approach with a maniacal focus on the mass market and a more limited initial scope.

Closing thoughts

As excited as I am about the potential for completely avant garde use cases that come directly from on-chain culture, the completely decentralized internet and metaverse is going to take time, whereas NoFi is here right now, and is crypto’s bridge across the chasm to the early majority.

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