Arvin from Galoy (creator of the Blink wallet) shared some insights as to how (and why) custodians could play a pivotal role in their users journey from using custodial services to self-custody. To put it in a nutshell, custodians are on the best position to do this work, since they are the solution currently being used by users who'd need to transition. By having their UX mimic closely the way a self-custodial wallet works and providing an easy way to switch to self-custody, as well as providing educational material, custodial wallets could help foster self-custody.

When it comes to Lightning, Arvin also highlights how game-changing solutions such as Blockstream's Greenlight and the Breez SDK are. With these, users are fully in control of their keys and the wallet operator is not a custodian any more, but merely an LSP. The only added complexity for the user with respect to a custodial wallet is that they need to backup their seed, but this process could be made easier with good design. The only tradeoff, as Arvin highlights, is that to have the same experience as a custodial wallet (notably being able to just open the app and send a payment instantly), the LSP would need to construct the payment's route themselves, and would hence know the amount and destination of the payment. However, this is already the case with custodial solutions ; and this issue could be mitigated by using Trampoline Routing (as Acinq does in their Phoenix wallet).

Extending on this topic, Tony Giorgio also published an interesting article last week discussing how every app could integrate Lightning in a self-custodial and privacy-preserving way someday. He highlights some of the current limitations, such as the impossibility to receive while offline and the difficulty of running a node in any environment, and which solutions (async payments, lightweight nodes such as Mutiny) are being designed and built right now to address said limitations. The road is still long and will certainly be hard to follow, but there's a desirable destination we can all focus on.