Hedera and Algorand Ecosystems Unite to Form DeRec Alliance for Decentralized Asset Recovery System
Entities from the Hedera and Algorand ecosystems, including the HBAR Foundation, Algorand Foundation, Hashgraph Association, Swirlds Labs, DLT Science Foundation, and industry partners The Building Blocks and BankSocial, have come together to establish the Decentralized Recovery (DeRec) Alliance. This alliance is dedicated to developing a new interoperability recovery standard that simplifies the recovery and adoption of cryptocurrencies and other digital assets.
The announcement was made at the CFC St. Moritz conference in Switzerland, where Dr. Leemon Baird, co-founder of Hedera and co-CEO of Swirlds Labs, and John Woods, CTO of Algorand Foundation, discussed Layer 1 superpowers on a panel.
The DeRec Alliance’s primary goal is to streamline the process of securing and recovering digital assets, aligning them with user-friendly experiences in conventional Web2 environments. As Web3 applications gain traction, there is a growing need for a seamless and accessible user experience for managing digital assets, accounts, keys, and passwords.
The alliance plans to bring together the Web3 ecosystem by offering an open-source, industry-standard methodology to ensure secure and straightforward digital asset recovery across wallets. Moreover, it aims to establish a compatible standard applicable to all wallet software on various blockchains, promoting collaboration among blockchain projects, banks, credit unions, and wallet software initiatives.
Ultimately, the DeRec Alliance aims to simplify the process of securing and recovering digital assets, passwords, and other secrets, making it as user-friendly as existing Web2 experiences. Through collaboration across diverse blockchains and industries, the alliance seeks to create standards and open-source code to enhance the safety and user experience of Web3.
DeRec Alliance Launches Decentralized Recovery Protocol to Enhance Web3 Asset Recovery
In conjunction with the establishment of the DeRec Alliance, the introduction of the Decentralized Recovery (DeRec) open-source protocol has been announced. This protocol offers a standardized approach to secret management, leveraging secret sharing among a designated set of helpers.
Helpers, which can be friends or businesses, enable users to recover their secrets when necessary, providing a mechanism for recovery in case a user loses their recovery device. The DeRec protocol represents a significant step forward in making digital asset recovery more accessible and secure in the Web3 landscape.
The DeRec protocol is designed to address the common issue of users losing access to their digital assets due to forgotten passwords. In the crypto space, incidents like the one involving former Ripple executive Stefan Thomas, who lost access to a digital wallet containing over $240 million worth of Bitcoin, underscore the importance of secure and user-friendly recovery mechanisms. Thomas had the password recorded on paper but misplaced it, risking permanent loss of access to his cryptocurrency fortune.
The DeRec protocol utilizes secret sharing among helpers, providing users with a way to recover their secrets through collaboration with trusted entities. The protocol incorporates automatic confirmations to ensure that helpers retain shares of secrets, facilitating automatic resharing when secrets change or when helpers join or leave.
Importantly, the protocol prioritizes privacy by not disclosing the identities or numbers of helpers, ensuring that even the helpers themselves remain unaware of each other.
This development is particularly relevant in the context of the decentralized finance (DeFi) space, where security and user-friendly solutions are essential. The DeRec protocol and the broader initiatives of the DeRec Alliance contribute to enhancing the safety and accessibility of digital assets in the evolving Web3 landscape.
