The open source protocol and new alliance were developed by the blockchain ecosystems Hedera and Algorand in order to address the issue of decentralised recovery for digital assets.
On January 11, the HBAR Foundation and the Algorand Foundation, two significant entities in the Hedera and Algorand ecosystems, announced the formation of a new partnership named the DeRec partnership with the goal of creating a decentralised recovery mechanism for digital assets.
The alliance was unveiled at the Crypto Finance Conference in St. Moritz by Leemon Baird, co-founder of Hedera, and John Woods, chief technology officer of the Algorand Foundation, during a joint panel.
According to the two decentralized finance (DeFi) executives, the DeRec Alliance aims to streamline the process of securing and recovering digital assets, aligning with conventional Web2 experiences.
Baird encouraged every blockchain and industry to create standards and open-source code to "bring safety to the promise of Web3, without the complexity."
He told Cointelegraph that the industry needs to make it easy for users to recover keys.
"All blockchains need to work together to create a compatible standard across all wallet software on all blockchains."
According to Baird, Hedera and Algorand are only getting started, and “banks, credit unions, and multiple wallet software projects involved” are already involved.
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The Decentralised Recovery (DeRec) open-source protocol was introduced as a standardised method for secret management together with the DeRec Alliance.
It’s based on the concept of secret sharing between a select group of helpers, like companies or friends, and it lets users get their secrets back when needed.
The system guarantees recovery even in the event that a user misplaces their recovery device, and each helper’s share keeps the original secret a secret.
"Seamless user experience is core to any great product. We need to maximize ease of use and minimize risk associated with self-sovereignty."
The DeRec protocol functions by automatically verifying that helps hold onto their shares of secrets and by automatically resharing them when helpers join or go or when secrets change.
Furthermore, it is not necessary to reveal the identities or numbers of the assistants; even they should stay anonymous to one another.
This development occurs as security concerns within the DeFi space persist.
The U.S. Commodity Futures Trading Commission, which oversees the country’s derivatives markets, published a report on January 10th that offers suggestions to legislators and business stakeholders on how to reduce the risks connected with DeFi.
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Hedera and Algorand, two stalwarts of the blockchain ecosystem, joined forces to tackle the challenge of decentralized recovery for digital assets.
The groundbreaking collaboration birthed the DeRec partnership, aiming to pioneer a decentralized recovery mechanism for digital assets.
The alliance was unveiled on January 11 at the Crypto Finance Conference in St. Moritz, with Leemon Baird, co-founder of Hedera, and John Woods, chief technology officer of the Algorand Foundation, leading the charge during a joint panel. Their vision?
To streamline the process of securing and recovering digital assets, mirroring conventional Web2 experiences.
Baird stressed the importance of industry-wide standards and open-source code to enhance safety within the Web3 realm.
He emphasized the need for user-friendly solutions in key recovery, urging blockchain entities to collaborate and create compatible standards across all wallet software.
The DeRec Alliance introduced the Decentralized Recovery (DeRec) open-source protocol – a standardized approach to secret management.
This innovative protocol, based on secret sharing among selected helpers, ensures seamless recovery of digital assets, even in the event of a lost recovery device.
Each helper’s share safeguards the original secret, ensuring confidentiality and security.
With a keen focus on user experience, the DeRec protocol simplifies secret management by automatically verifying and resharing secrets among helpers.
Importantly, the protocol maintains anonymity among helpers, enhancing security and privacy for users.
This landmark development addresses pressing security concerns within the DeFi space, aligning with recent recommendations from regulatory bodies like the U.S. Commodity Futures Trading Commission.
As the industry embraces innovation, the Hedera-Algorand alliance sets a new standard for security and resilience in the digital asset landscape.
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