Will HW manufacturers become crypto-banks in the world of the future?

[m2017]

Trezor has launched a new feature in trezor suite: stablecoin lending. The idea is simple: deposit stablecoins in the app and simply earn profit.

Source: https://trezor.io/stablecoin-yield

I believe that hardware wallet manufacturers (I expect that ledger is either developing or already has a similar option) will gradually undergo a metamorphosis and, most likely, in the future, will become something akin to crypto-banks (replacing traditional banks), as there are several key prerequisites for this. For example, their devices store crypto assets (not exactly, but like storing money physically in a bank), and they have an app used by a user base that owns crypto assets, and, of course, by the clients themselves.

What do you think about this? How do you see the situation with trezor adding a lending feature?

[OmegaStarScream]

Not really a big deal since just like their staking and exchange features, this is done through another partner (morpho) and not directly by them:

https://x.com/i/status/2059999951665660030

Just another way for them to earn more money on top of their device sales and other integrations.

[Karl_3000]

If you first saw this on the news, it is probably for marketing purposes. I said this because I also saw it on the news I think 2 days ago.

Morpho staking has been on wallet since years ago but Trezor just added it.

This is another wallet that I have seen it before which is an online wallet

[ABCbits]

If there's any HW manufacturers that will open custodial service (bank or something else), IMO Ledger is more likely to do that since they already offer Ledger Recover service.

Not really a big deal since just like their staking and exchange features, this is done through another partner (morpho) and not directly by them:

https://x.com/i/status/2059999951665660030

Just another way for them to earn more money on top of their device sales and other integrations.

It's also worth that Morpho claim to be permissionless or decentralized, although i'm not sure how true is their claim.

[Synchronice]

To my mind, no Hardware Wallet manufacturer can achieve anything significant in banking sector. If anything, crypto exchanges are the ones who can achieve real bank-level growth, awareness and success. And big banks, like JPMorgan, HSBC, Deutsche Bank and so on, if the government gives them a green light for crypto (and that will happen if banks want because money buys everything), they can take over crypto exchanges like Binance and Coinbase. This might sound funny for some but this is how I think about this topic. This is the game where these HW providers and exchanges can't go further (maybe exchanges can).

If there's any HW manufacturers that will open custodial service (bank or something else), IMO Ledger is more likely to do that since they already offer Ledger Recover service.

Didn't Ledger Recover Service negatively affected their reputation or people immediately forgot and forgave?

[SFR10]

What do you think about this? How do you see the situation with trezor adding a lending feature?

Considering that most stablecoins can be frozen, I think holding them in HWs gives a false sense of security and to rub salt into the wound, these users will be risking those assets ^{[refer to the following screenshot]} in the hope of getting something more in return!
^{- Unfortunately, we have to accept that most HW users don't think like us, so I wouldn't be surprised to see that one day Trezor offers something that falls into that category (like ABCbits, I expect Ledger to be the pioneer on this front).}

[Lucius]

~snip~
What do you think about this? How do you see the situation with trezor adding a lending feature?

That's not appealing to me at all for several reasons.

First they want to convince you to exchange your fiat for something called stablecoins, and then to lend it to someone at a very low interest rate while at the same time running the risk of someone confiscating that same stablecoin for any reason. I guess we all know that most stablecoins can be frozen regardless of which wallet they are stored in.

For me, the conclusion is the following, it is safer to have fiat in a bank where savings deposits are insured by the state up to 100 000 EUR (EU), than to trust private companies that cannot/do not want to prove that their tokens are backed by something.

[Karl_3000]

First they want to convince you to exchange your fiat for something called stablecoins, and then to lend it to someone at a very low interest rate while at the same time running the risk of someone confiscating that same stablecoin for any reason. I guess we all know that most stablecoins can be frozen regardless of which wallet they are stored in.

For me, the conclusion is the following, it is safer to have fiat in a bank where savings deposits are insured by the state up to 100 000 EUR (EU), than to trust private companies that cannot/do not want to prove that their tokens are backed by something.

I can still save money in bank and earn 10% interest instead of staking and earning 4% interest on a stable coin which is not fixed but can be changed to lower APR as I am not expecting higher APR. I can not just agree more with what you and other people said, you are totally right.

[FinneysTrueVision]

I can still save money in bank and earn 10% interest instead of staking and earning 4% interest on a stable coin which is not fixed but can be changed to lower APR as I am not expecting higher APR. I can not just agree more with what you and other people said, you are totally right.

The APY on USDT is currently over 12%, but you are right that it is variable and fluctuates constantly. Honestly, no amount of APY would make me put my money in a fiat bank. That being said, I don’t hold a lot of stablecoins, so I won’t be using Morpho on Trezor.



The purpose of a hardware wallet is to custody your own crypto, so it is already a sort of crypto bank, one where you remain in control over your assets.

Trezor Suite has added features like WalletConnect and earning yield so that you can use DeFi without needing separate software. It isn’t as feature rich or as optimized as your traditional extension wallets, but for inexperienced users this provides convenience and simplicity.

[The Sceptical Chymist]

Didn't Ledger Recover Service negatively affected their reputation or people immediately forgot and forgave?

Um....I don't want to insult any of the long-time members of this section if they still happen to be supporters of Ledger, so I'll put it in vague terms: Only a certain type of cryptocurrency owner forgave and forgot Ledger's heinous disregard of their customers' privacy.  Another type quickly tossed their Ledger devices in the nearest lake, swearing off the use of anything put out by that company forever.

If you want to see ignorance *sorry* true forgiveness and subsequent forgetting, go check Ledger's subreddit.  Some may find it amusing; personally I find it flabbergasting in the extreme.

[ABCbits]

If there's any HW manufacturers that will open custodial service (bank or something else), IMO Ledger is more likely to do that since they already offer Ledger Recover service.

Didn't Ledger Recover Service negatively affected their reputation or people immediately forgot and forgave?

AFAIK their reputation is partly ruined among cryptocurrency enthusiast or people who have serious concern about security. But among general people, their reputation is still mostly good. I definitely in the former, because in past they claim it's impossible/there's no way to extract the private key/recovery words, but turns out it's possible.

I can still save money in bank and earn 10% interest instead of staking and earning 4% interest on a stable coin which is not fixed but can be changed to lower APR as I am not expecting higher APR. I can not just agree more with what you and other people said, you are totally right.

The APY on USDT is currently over 12%, but you are right that it is variable and fluctuates constantly. Honestly, no amount of APY would make me put my money in a fiat bank. That being said, I don’t hold a lot of stablecoins, so I won’t be using Morpho on Trezor.

Do you know whether that screenshot refer to https://app.morpho.org/ethereum/vault/0xbeef003C68896c7D2c3c60d363e8d71a49Ab2bf9/steakhouse-prime-usdt? I checked their APY history, but it was around 2.5% for most of time until yesterday.

[FinneysTrueVision]

Do you know whether that screenshot refer to https://app.morpho.org/ethereum/vault/0xbeef003C68896c7D2c3c60d363e8d71a49Ab2bf9/steakhouse-prime-usdt? I checked their APY history, but it was around 2.5% for most of time until yesterday.

The Trezor specific vault has a different contract address, which is 0xE4DB1c5A1B709CE4d2adA6985D9D506e58F73829. They are essentially the same because USDT deposits end up in the same place. One of the key differences is that depositing through Trezor comes with a 10% performance fee, while depositing through the morpho.org frontend has zero performance fee. Some of this fee is being offset with extra Merkl incentives for depositing through Trezor Suite. The amount is real tiny though and paid in MORPHO tokens.

[Lucius]

I can still save money in bank and earn 10% interest instead of staking and earning 4% interest on a stable coin...
~snip~

I don't know where you live (and it doesn't matter), but 10% on fixed savings in the bank sounds like a banking joke to me. I would have nothing against depositing EUR 100k in the bank and earning 10% for one year, with the deposit being insured by the state.

Um....I don't want to insult any of the long-time members of this section if they still happen to be supporters of Ledger, so I'll put it in vague terms: Only a certain type of cryptocurrency owner forgave and forgot Ledger's heinous disregard of their customers' privacy.  Another type quickly tossed their Ledger devices in the nearest lake, swearing off the use of anything put out by that company forever.
~snip~

But Sir, Ledger claims that it is not possible to extract the seed from the device remotely unless you pay a fee and click to agree to it - therefore, some users believe that they are still safe and that the whole Ledger story is overblown. I think that after hundreds of posts by very smart people on this forum and online in general warning about the risk of using their devices, all those who continue to use them either simply don't understand or have no other choice.

For me personally, the only thing I accept as safe storage of private keys is an air-gapped approach.

[Synchronice]

If there's any HW manufacturers that will open custodial service (bank or something else), IMO Ledger is more likely to do that since they already offer Ledger Recover service.

Didn't Ledger Recover Service negatively affected their reputation or people immediately forgot and forgave?

AFAIK their reputation is partly ruined among cryptocurrency enthusiast or people who have serious concern about security. But among general people, their reputation is still mostly good. I definitely in the former, because in past they claim it's impossible/there's no way to extract the private key/recovery words, but turns out it's possible.

To my mind, doesn't matter how serious you are about the security, the company lied to you and it was not a simple lie, it was the biggest and most brutal lie. They promised you that it was impossible to extract keys from secure chip and then they come up with recovery service. This fact alone questions me absolutely every part of the wallet and the company.

It's a little bit sad that companies can treat their customers so badly and people will swallow it. Well, it is what it is, some get what they deserve.

I don't know where you live (and it doesn't matter), but 10% on fixed savings in the bank sounds like a banking joke to me. I would have nothing against depositing EUR 100k in the bank and earning 10% for one year, with the deposit being insured by the state.

If we keep in mind the inflation, it's always better to start a business instead of saving money in the bank when its all of your money. If you have other 100k besides this, then no problem.