Ripple Teams up to Build a Secret Management Protocol
Ripple, the issuer of XRP tokens, has formed a strategic alliance with Algorand and Hedera, aiming to revolutionize secret management.
This partnership inaugurates the DeRec Alliance, which also includes Swirlds Labs and XRPL Labs among its founding members.
What is DeRec Alliance?
The DeRec Alliance is dedicated to enhancing digital asset recovery through an open-source protocol. This system allows for the secure and confidential recovery of digital secrets, such as passwords and keys, using a method based on secret sharing.
Founding members, including Ripple, are pivotal in the Technical Oversight Committee (TOC). They influence governance and policies that shape the future of digital asset security. The TOC provides expert oversight and direction, which is critical in guiding the alliance’s strategic initiatives.
Read more: What is a Private Key in Crypto?
The demand for such a system has surged as digital asset adoption increases. Traditional recovery methods often leave assets at risk or completely irrecoverable if the owners lose their keys.
For example, Rain Lõhmus of LHV Bank cannot access 250,000 Ethereum worth over $700 million. Also, former Ripple CTO Stefan Thomas is locked out of a Bitcoin (BTC) wallet due to a forgotten password. Thomas’ 7,000 BTC are worth over $441 million.
The DeRec protocol involves a network of ‘helpers’ – either friends or businesses – who each hold a part of a user’s digital secret. If the user loses access to their device or data, these helpers can collaboratively reconstruct the secret. This system ensures that no single helper accesses the complete secret, maintaining high security and redundancy without compromising privacy.
Additionally, the system is designed to automatically adapt to changes, such as when helpers join or leave. This feature maintains the integrity of the secret, ensuring continuous security despite changes in the user’s network of helpers.
“The DeRec Alliance addresses one of the biggest challenges facing mainstream crypto adoption—secure and user-friendly management of private keys. By establishing clear standards for key recovery, this collaboration across the crypto industry empowers individuals to take control of their digital assets with confidence,” Markus Infanger, Senior Vice President of RippleX, said.
Despite progress, Ripple faces ongoing legal challenges from the US Securities and Exchange Commission (SEC). For instance, on May 7, the SEC objected to Ripple’s plan of issuing a “new unregistered crypto asset.”
Read more: Everything You Need To Know About Ripple vs SEC
However, the SEC has not mentioned more details about the new crypto asset.
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