8 May 2024
Founder: Evan Kaloudis
Date Founded: 2019, block 563345; incorporated in 2023
Location of Headquarters: No HQ; fully remote
Amount of Bitcoin Held in Treasury: Not disclosed
Number of Employees: 2
Website: https://zeusln.com/
Public or Private? Private
On April 26, 2024, Evan Kaloudis drew a line in the sand.
In the wake of the news of the Samourai Wallet developers getting arrested and Phoenix Wallet halting service to US customers, he made it public that he was going to fight like hell for self-custody Bitcoin and Lightning Network wallets like the one he created, ZEUS, to continue to exist.
https://t.co/n0ye9TcNYd pic.twitter.com/Me5ixLeBT0
— EVAN KALOUDIS (@evankaloudis) April 26, 2024
The right to privately self custody your bitcoin in the United States, he argued, had to be defended at all costs.
Kaloudis’ words cut through the tension in the Bitcoin space, especially on X, where the feeling of despair was palpable.
A week and a half after Kaloudis made his deeply felt statement, I caught up with him virtually to learn more about his plans for ZEUS — one of the most dynamic Lightning wallets on the market today — as we move into an era where the powers that be seem to want all bitcoin in a walled garden and tied to users’ identities.
A transcript of our conversation, edited for length and clarity, follows below.
Frank Corva: What is the mission of ZEUS and how is it different from other Lightning Wallets?
Evan Kaloudis: Zeus really doesn’t like to compromise.
We’ve seen a lot of wallets that’ll make trade-offs for various reasons. We’ve seen wallets that want to just provide the sharpest UX at the cost of self-custody or privacy. We’ve seen wallets from Silicon Valley that close you into a walled garden.
Zeus wants to enable you to make Bitcoin payments your way, whether it be that you’re just starting off and want to spin up a full lightning node in your pocket [editor’s note: ZEUS enables you to run a Lightning node on your phone] or, if you’re a more seasoned veteran, and you have a full node running at home. Maybe it’s an Umbrel or Start9, or maybe you’re even running something in the cloud with Voltage — you can connect to ZEUS with that, too.
There are multiple ways to connect. There are multiple backends we support. We just want to empower people to make Lightning payments as freely as possible, with as few intermediaries as possible and with as much privacy as possible.
Corva: Given the recent crackdown on the Samourai developers followed by Phoenix stopping its services for US customers and then Wasabi Wallet shutting down its coinjoin service, do you feel like it’s inevitable that the authorities will target ZEUS at some point?
Kaloudis: I think there’s a really good chance that down the line Zeus does get targeted. It’s almost an inevitability unless the outlook on Bitcoin in this country drastically changes.
And regulators have no idea how the Lightning Network works. It can be interpreted in so many different ways. But they know when they want to come down with the clamps, they have to come down strong.
That really helps put stuff in perspective for us as developers and people offering products and services. We still have a long way to go despite the great strides that we’ve made in the last six or seven years.
Corva: It’s interesting how bitcoin’s price rising seems to have little to do with people adopting it as a medium of exchange.
Kaloudis: What is the general use case of Bitcoin right now? It’s just people just trading it like a stock or using it as an entry tool to gamble on shitcoins and meme coins this cycle. People don’t [grasp] the technology fully. Meanwhile, the people up top are seeing the writing on the wall and trying to nip it in the bud while they can — medium of exchange is really the largest threat to them.
The Michael Saylors of the world, the Larry Finks of the world, the people offering up the ETFs who stand to benefit from number go up only would love nothing more than if everyone who was getting into it were neatly arranged and accounted for, KYC and all, and if it really didn’t take hold as something people self custodied or used as a medium of exchange.
Corva: Is this why in the latest iteration of ZEUS you put the node in the phone instead of assuming that people would run a node at home and then use ZEUS as a remote control of sorts? In other words, are you trying to make it easier for people to use bitcoin as a medium of exchange?
Kaloudis: We really bridged a gap for them by putting it in the phone and offering up basically all the same functionality that a remote user would have.
I think ZEUS is going to really evolve pretty drastically, but our priority and our two hard lines are self custody and no KYC.
I would rather either stop offering these Bitcoin payment channels in certain jurisdictions — we already have to comply with like with OFAC — or shut the company down.
We’ve built such a great product that empowers so many people that even without Olympus (a well-connected Lightning node that ZEUS runs) and our LSP services, I’m confident there’d be thousands of people still using the software. And I’m sure people would continue to contribute to it at an open-source level to keep making it better.
Corva: It’s disheartening to think that someone like you would even think about having to walk away from your company. There aren’t many people in this space who can build what you’ve built and this makes me think the next person with your skills might just consider not even getting started as a founder in this space.
Kaloudis: With this crackdown, we’ve seen a real chilling effect. It’s a real home run for the opposing side, and there’s definitely potential for things to snowball and for more people to move out of the market.
I really do hope that my actions encourage others to stand up and not self-police or leave markets preemptively.
On the other hand, if you talk to people who are developing the space or doing their own startup, they already know that what they’re doing is crazy. They know that, “Hey, I can go work for one of these FAANG companies and make $200, $300 grand easily, and I make a fraction of that with a fraction of a chance of success if I go and work on Bitcoin and try to start my own company.”
But that’s the thing with Bitcoin developers — despite all the challenges that lay ahead and the pressures that are mounting, there’s nothing else they’d rather do. This is a moonshot, but if it succeeds, the entire world changes. So, I think there’s still going to be a lot of crazy devs.
Corva: Do you think these developers will be a bit less publicly antagonistic after seeing what happened to the Samourai developers and how prosecutors are using the tweet in which they welcomed Russian oligarchs to use their service in the case against them? Do you think it’s better to go on the offensive verbally or to just keep your head down and work quietly?
Kaloudis: Man, it’s just so fun when you come out with the bravado, you know? And the Samourai guys built an entire brand around it. They essentially assembled an army of diehard fans and users and that largely contributed to their success.
If you are a nym and you have the ability, then please continue the shit talking. But if you’re a public figure, it’s not going to be wise to poke the bear or kick the hornet’s nest, as Satoshi said.
We do need to start thinking a little more critically. There are still a lot of concessions we are going to have to make in the battles that are happening now. You need to be strategic to win a war.
Corva: Let’s shift over to something more optimistic — your plans for ZEUS — and let me ask you some questions that some plebs on Nostr and X asked me to ask you. Are you exploring ways for self-custodial users to receive payments without initially having to fund a channel with Bitcoin and what would this look like?
Kaloudis: Great question. On the self custodial front, there are a lot of challenges. We have people like Super Testnet who have figured out really innovative ways to do things self custodially with payments, like what we’ve done with our ZEUS Lightning address and stuff like this new hedgehog protocol.
The pre-funding issue still remains. It’s a tricky challenge that we’re trying to address.
I ultimately think that a lot of protocol level changes have to happen to Bitcoin. Those are the things that we’re more bullish on — the things that still enable self custody. We’re really bullish on covenants. We’re really bullish on coin pools and payment pools. Stuff like Ark is pretty novel.
We don’t really want people to break the bank to set up payment channels. As Bitcoin’s price keeps going up, it becomes more expensive, at least in dollar terms, to open your first channel and use ZEUS in a self-custodial way.
We want to try to avoid that moving forward, but it’s going to take more and more plebs pushing to say, “Hey, this ossification push is stupid. It cripples Bitcoin.” And the Larry Finks, the Michael Saylor types we were talking about earlier would love nothing more than if the core code base and protocol just stayed as is. Think about who really benefits if things stay that way.
Let’s be open minded as we push forward and let’s see what other proposals come down the line, because there’s a lot more we have to do to scale.
Corva: When can you bring splicing to ZEUS?
Kaloudis: Splicing is [some]thing we depend on LND for. I’d love to bring it in, but who knows? We probably could see in the core Lightning interfaces, too. It would probably be easier to see that sooner than in say the embedded node in Zeus. More so than what it enables users [to do], it would really benefit us as the Lightning Service Provider in reducing costs.
Corva: In what ways does ZEUS integrate with Nostr?
Kaloudis: Zeus today has two Nostr integrations.
We have a contact book in Zeus in which you can import all your contacts from Nostr. This gives you a great way to easily send your payments to people you follow. In that way, it’s sort of like a decentralized Cash App or decentralized Venmo for payments for people familiar with that in the US.
We also use Nostr to power our self-custodial Lightning address service, which is the first of its kind on a mobile wallet powered by the great Super Testnet ZapLocker spec and basically use Nostr keys to sign off on the invoices that our server serves up to users. So, if you have a compatible ZapLocker wallet, you can say, “Oh yeah, this invoice hash, this got signed by Frank and I’ll press this button to make sure I’m really looking at Frank’s profile and that it’s really him who signed off on it.”
Corva: With all of the innovations you bring to ZEUS, do you keep existing regulations in mind as you build or do you just build and hope you’re not breaking any laws?
Kaloudis: We have to act in good faith. We have already put measures up that will prevent bad actors from using our system.
We’re going to have to likely show regulators, if they come knocking on our door, that it’s not just a free for all here. And we have data that can help us identify and kick bad users off our platform.
I’m not going to say, “Hey, Russian oligarchs come use Olympus,” because you’re not going to get far if you try to do that. ZEUS is just not conducive to that at all.
What ZEUS is conducive to is to be able to freely make your day-to-day payments.
What is guiding us is our hard lines, and our hard lines are self custody and no KYC. We’re not making payments on behalf of users. We’re just empowering them to make those payments for themselves.
If we get labeled as a money service business, then everything else goes, from individual Lightning node operators to miners potentially to self custody itself. And like I said in my post, that’s the hill to die on — self custody.
The alternative is just too grim to even think about and it’s going to take some individuals, largely in the United States, to stand up.