From what I was able to find Incognito wallet might be on a good road to something similar I was talking about. There are trade-off as they pay-out interest in their own coin and they do offer trustless custody.
1. By any chance, are you referring to
https://incognito.org/?
2. Being trustless and custody at same time is impossible. Besides, that wallet require you to use their their pegged coin (such as pBTC rather than BTC) on their network. I'd suggest you to perform further research.
Note. If you are able to contribute to my question, which is how to make the most out of BITCOIN (financially) than post away.
Consider HODL your Bitcoin.