Are SDAs custodial?

Yes, Rhino.fi Smart Deposit Addresses (SDAs) are custodial. Rhino manages the private keys for Smart Deposit Addresses, meaning users do not have direct control over funds once they are deposited to an SDA.

When users deposit funds to an SDA, Rhino's system detects the deposit and immediately pays out the equivalent amount to the destination address using their own liquidity pools. The original deposited funds remain on the SDA and are periodically swept by Rhino's automated systems to consolidate balances across their infrastructure.

The team has acknowledged that there are "trust assumptions in the infrastructure (SDA + bridge)" and has discussed approaches to move towards non-custodial designs in the future, but the current implementation requires users to trust Rhino with custody of their funds during the bridging process.