Algorand and Hedera Ecosystem Partners Team Up to Simplify Process of Recovering Digital Wallets

 Key takeaways:

• The Algorand and Hedera ecosystems have partnered to form the DeRec Alliance for simplified decentralized asset recovery
• The alliance aims to make recovering lost digital wallet access as easy as on Web2 platforms like Google and Facebook
• ALGO price has declined by -1.49% over the last 24 hours to $0.200

Algorand and Hedera join forces to streamline crypto asset recovery

Blockchain ecosystems Hedera and Algorand have joined forces to form the DeRec Alliance, which aims to dramatically simplify the recovery process for lost or inaccessible digital assets and accounts. 

1/ Introducing the Decentralized Recovery (DeRec) Alliance: a collaboration between @SwirldsLabs, @AlgoFoundation, @HBAR_Foundation, @The_Hashgraph, & @DLT_Science to develop a standard which will greatly simplify the recovery & adoption of #DigitalAssets.https://t.co/6rP9gExc05 pic.twitter.com/5ifdAqqDr9

— Swirlds Labs (@swirldslabs) January 11, 2024

The new alliance was announced today at the Crypto Finance Conference in St. Moritz, Switzerland, by Dr. Leemon Baird, co-founder of Hedera Hashgraph, and John Woods, CTO of the Algorand Foundation.

According to Dr. Baird, the DeRec Alliance brings together the Web3 ecosystem to offer an open-source, industry-standard methodology that makes digital asset recovery seamless and secure across wallets.”

The alliance seeks to align the recovery process for digital assets with the familiar user experiences of Web2 applications like Google and Facebook that allow simple account recovery. This will help onboard millions of mainstream users to Web3 applications.

Along with the alliance, the groups introduced the open-source Decentralized Recovery (DeRec) protocol for decentralized, secure secret sharing and recovery.

How does the new recovery protocol work?

The protocol is based on secret sharing among designated “helpers” like friends or businesses. If a user loses access to their wallet, enough helpers can reconstruct the user’s secret keys without anyone helper knowing the entire key. 

Additionally, the system also has automatic checks to ensure helpers still have key shares and will automatically re-share keys if they change. Critically, the protocol preserves user privacy and security throughout the process.

John Woods of the Algorand Foundation emphasized the importance of this simplified user experience for mainstream adoption of Web3 and decentralized finance (DeFi). 

“Seamless user experience is core to any great product. We need to maximize ease of use and minimize risk associated with self-sovereignty.,” Woods stated.

The launch comes as the DeFi industry grapples with usability and security challenges. DeFi hacks resulted in billions of losses last year, highlighting the need for simplified and secure key recovery.

The open-source DeRec protocol has significant implications for DeFi and Web3. Features like decentralized social recovery of wallet keys and accounts could dramatically expand mainstream adoption and reduce reliance on centralized providers.

Dr. Baird invited participation across the industry, saying, “We encourage every blockchain and every industry to work together to bring safety to the promise of Web3, without the complexity.”

Founding members of the DeRec Alliance include the Algorand Foundation, Hedera Hashgraph, HBAR Foundation, Swirlds, and The Building Blocks. The alliance has also released an open invitation for additional members to join.

With simple and secure decentralized account recovery on the horizon, the door is open for millions of everyday users to explore the possibilities of Web3 without fear of losing access forever.

Algorand (ALGO) price movements 

The price of ALGO, the native token of the Algorand blockchain, has declined by 1.49% in the last 24 hours, reaching $0.200 as of Jan. 12. The token currently has a market cap of $1.62 billion and a 24-hour trading volume of $141.67 million. 

ALGO is currently ranked 54th among the top cryptocurrencies by market cap. The token is predicted to surge by 15.47$ and reach 0.229 by Jan.16, 2025.