Social-recovery wallets

Social-recovery wallets

During these years of the crypto revolution, many people lost their wallets and all their funds, accounting for billions of dollars in BTC and other tokens. In the traditional sense, crypto wallets have an address where you can receive funds. However, usually, this address cryptographically derives from a secret key you must use to withdraw those funds. Therefore: "if you don't have your key, you are not in control of your funds".

In the traditional world of finance, we can say that banks keep control of your funds, and analogously centralised exchanges usually keep control of your private key. In Argentina in 2001, with the so-called "Corralito", banks restricted access to their user's USD funds in one of the biggest financial crises of modern history. Those funds were later (partially) returned to their owners but in Argentinian pesos, and since then, the peso has dropped almost 36,000%. Decentralisation aims to solve the middlemen issue, giving control back to the user.

The Self-Sovereign Identity Protocol's technological pillars are blockchain and W3C Decentralized Identifiers (DIDs). With Tyron, we develop innovative solutions such as Social Recovery by combining these two technologies.

On TYRON, you can receive funds in your self-sovereign identity (SSI) account, which has several wallets (including ZilPay). Your SSI requires you to prove control as the account owner, so your ZilPay acts as the controller wallet. Every time you make a transaction with your SSI, for example, to transfer funds, your account verifies that the transaction comes from your controller wallet. And this wallet must have ZIL to pay for the transaction cost. You can update the controller wallet (new address, i.e. new private key), but what happens if you lose access to your current controller wallet?

Social Recovery protects the assets in your xWALLETS, not in your ZilPay (controller wallet). Therefore, if your funds are in your controller wallet and you lose it, there is no way back.

But if your funds are in your xWALLETS and you have activated Social Recovery, you will be able to regain control (update controller wallet) with the help of your guardians.

Key aspects:

  • An NFT Domain Name is a non-fungible token that enables you to find your SSI account with a simple name (like an alias) instead of a difficult-to-remember cryptographic address. As an NFT, it is a unique entity that enables other users to read your DID in real-time when the transaction gets executed, ensuring that the DID data is up to date.
  • A Decentralized Identifier (DID) represents a unique ID whose meta-data is a DID Document. Your DID has Verification Methods that are keys to making Schnorr's digital signatures that are cryptographically verifiable on-chain. Thus, through the authentication of such a signature, we can be sure that the owner made such a claim.
  • When executing Social Recovery, the goal is to update your controller wallet (ZilPay address) to reclaim control of your SSI account. You must have a new controller wallet whose address must get signed by your guardians, and then anyone can request your Social Recovery. During this transaction, your SSI will use your guardians' NFT domain names to fetch their DIDs and verify that they have correctly signed your new controller wallet. If Social Recovery is successful, you will regain complete control of your SSI account.
  • To enable Social Recovery, you must provide at least three guardians with their NFT domain names. Your guardians shall be people or organisations you trust for such a purpose. You can have an unlimited amount of guardians: if you have six, you will require at least 4 of them to recover your account; if you have eight guardians, you will need 5 of them to recover your SSI (thus, you need half of them plus one at the moment of recovery).

You can get your SSI account and NFT Domain Name on the TYRON Network & learn more with the Social Tree of the SSI Protocol.

Also available in Spanish.

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