Vitalik Buterin, the co-founder of Ethereum, has underlined the value of having a diverse group of “guardians” to maximize the security of crypto assets held in self-custody using multisig and social recovery wallets.
Self-custody and upholding adequate wallet safety protocols have never been more crucial given the recent rise in cryptocurrency scams and hacks as well as the impending collapse of numerous major crypto enterprises in 2022.
How I think about selecting guardians for multsig and social recovery wallets,” by Buterin, was the subject of a post on the r/ethereum community’s Reddit page on March 16.
“Self-control is crucial. And a wonderful way to achieve it is using multisig and social recovery. A little Reddit post on my thoughts on selecting guardians for multisig and social recovery wallets: https://t.co/FY1iyJ6BFC ”
— Vitalik Buterin (@VitalikButerin), March 17, 2023
Multisig wallets and social recovery wallets both rely on guardians, which effectively act as external sources to recover cash or approve transactions, despite the fact that their structures differ. In general, Guardians can be addresses under the supervision of other individuals or entities or groups of external wallets belonging to the same person.
My general rule of thumb is that there should be enough guardians under other people’s supervision so that if you vanish, there will be enough guardians left to collect your funds.
However, they should still be able to locate one another in the event that the owner of the wallet becomes incapacitated. Buterin continued by advising that a person’s guardians should not be aware of one another as this “greatly reduces the risk that they collude” to attack their wallets and assets.
Reddit, comments on the article by Buterin
Because there are evident conventional processes that automatically come to people’s minds in such a case (e.g., contact your family), he stated, “If something happens to you, they will still be able to find each other.
The Ethereum co-founder further advised users to “instruct guardians to pose a security question” before verifying an operation that only they and the guardian would know the answer to, and to only confirm when the correct response is supplied.
The Ethereum co-founder also emphasized that degen traders, or those not making long-term HODL trades, should choose guardians that can react rapidly to suit their fast-moving demands.
“If you’re using on-chain contracts for degen activities, you might need to take immediate action. For example, you might need to move money if a contract becomes vulnerable or withdraw money if you are about to be liquidated. You should look for guardians who can step in right away if this is one of your necessities”.
At least once a year, Buterin advised checking each guardian to ensure that they “haven’t forgotten or lost their accounts.”
Maintaining adequate wallet safety protocols has never been more crucial given the rise in crypto scammers and breaches over the previous few years, as well as the closure of several crypto enterprises in 2018.