The DeRec Alliance, a new partnership aimed at creating a decentralized recovery system for crypto assets, was announced on January 11. Key players from the Hedera and Algorand ecosystems, including the HBAR Foundation and Algorand Foundation, revealed the initiative during the CFC St. Moritz conference. The announcement was made by Dr. Leemon Baird, co-founder of Hedera, and John Woods, CTO of the Algorand Foundation, during a joint panel.
The DeRec Alliance seeks to simplify the process of securing and recovering crypto assets, aligning it with traditional Web2 experiences. Dr. Baird emphasized the need for all blockchain networks to collaborate on creating standards and open-source code to bring security to the Web3 sector without complexity. He advocated for a uniform standard across all blockchain network wallet software.
Baird noted that Hedera and Algorand are just the beginning, with banks, credit unions, and multiple wallet software projects already involved. The DeRec Alliance introduced the Decentralized Recovery (DeRec) open-source protocol as a standardized approach to secret management.
The DeRec approach is built on the concept of secret sharing among a predefined set of helpers, allowing users to recover their information when needed. Each helper’s share does not reveal any personal data, and the system ensures recovery even if a user loses their recovery device. Woods highlighted the importance of maximizing ease of use and minimizing risk associated with self-sovereignty for a flawless user experience.
The DeRec protocol operates with automatic resharing when data changes or helpers join or leave, as well as automatic confirmations that helpers hold their data shares. Importantly, the identities or numbers of helpers do not need to be disclosed, maintaining their anonymity even from each other.