Zeus Wallet Integrates Cashu, Opening the Lightning Network to Millions of New Users

The U.S.-based Bitcoin and Lightning mobile wallet Zeus recently announced an alpha-release integration of Cashu. The move marks the first integration of ecash

U.S.-based Bitcoin and Lightning mobile wallet Zeus recently announced an alpha-release integration of Cashu, marking the first integration of the promising ecash use case into a popular Bitcoin wallet.

The move paves the way for broader adoption of Bitcoin in a format that boasts privacy and scalability—key properties of Chaumian ecash, a form of digital cash invented by David Chaum in the 90s—with the trade-off of being fundamentally centralized, requiring a significant amount of trust in the issuer. A sunny view of this technology is that it’s like good old-fashioned cash, but in the digital realm.

In a surprising move for Zeus, known as the go-to tool for advanced Lightning users seeking to connect to their home nodes, the integration of Cashu acknowledges a “last mile” challenge Lightning wallets face when delivering Bitcoin to the masses.

“We basically started off as the cypherpunk wallet, right? You got to set up your own Lightning node and connect to it with Zeus. The last two years, we put the node in the phone with one click, you can run it all in a standalone app without a remote node,” Evan Kaloudis, founder and CEO of Zeus, told Bitcoin Magazine.

“Cashu addresses uneconomical self-custody for small bitcoin amounts. On-chain, the dust limit is 546 satoshis, and Layer two systems like Lightning have costs for channel setup or unilateral exits that aren’t widely discussed.”

According to Kaloudis, this is a major point of friction in noncustodial Lightning wallets: the need for liquidity and channel management. While these esoteric aspects of the Lightning Network have been mostly abstracted since its invention in 2016, these fundamental trade-offs continue to manifest even in the most sophisticated and user-friendly wallets.

In the case of both Phoenix and Zeus Wallet, two of the most popular noncustodial options in the market, users must pay up to 10,000 sats upfront to gain spending capacity. These fees are necessary to cover the on-chain fees spent to open a channel for the user against the wallet’s liquidity service provider, unlocking a noncustodial experience.

The required up-front fee is difficult to explain and presents a painful onboarding experience for new users who are used to fiat apps, like Venmo or Cash App, crediting them with small amounts to join the network.

As a result of this difficulty starting out in the Bitcoin world, we’ve seen the rapid adoption of custodial Lightning wallets like Wallet of Satoshi (WOS), which leveraged the global, near-instant settlement power of Bitcoin.

Major developments have been made over seven years after the Lightning Network’s inception, however, and Zeus Wallet is pushing the boundaries.

“With Ecash, we make it so easy that anyone can set up a wallet and start participating in our ecosystem, which I really think is going to become more and more prevalent,” said Kaloudis.

Today, at roughly $100,000 per bitcoin, 1,000 satoshis are equivalent to $1, transactions of these sizes are known as microtransactions — a popular example are Nostr social media tips known as zaps. But finding the right tool for this use case is not simple. Self custodied wallets like Phoenix charge transaction fees in the hundreds of satoshis, even with open channels, and on-chain fees often cost the same and are slower to settle.

As a result, there’s an entire category of spending that is only served by cheaper alternatives such as custodial lightning wallets like WOS or Blink, but result in significant privacy tradeoffs, often requiring phone numbers from users and in some cases more advanced KYC and IP tracking. Cashu hopes to serve this market with lower privacy costs, the same ease of use, speed and competitive fees.

Digging deeper into the Cashu integration, Kaloudis explained that “For users this means being able to pick and switch between custodians in a single app. For developers this means being able to defer custodial responsibilities to third parties and not have to wire up a new integration when your current custodian halts operations.”

Zaps are satoshi-denominated rewards delivered as “likes” or micro-tips for content in the Nostr social media ecosystem. A zap can be as small as one satoshi, the smallest amount of bitcoin that can be technically transferred, which today is less than a tenth of a penny.

“But I think if we look at Nostr and you’re seeing how many people are zapping and how big a part of that ecosystem it is. It’s like, people are willing to do it,” said Kaloudis.

“Cashu, while custodial, lets users accumulate small amounts — say, via Nostr zaps — without needing 6,000 satoshis to open a Lightning channel. ZEUS