Ethereum co-founder Vitalik Buterin emphasized the importance of having various "guardians" to maximize the security of self-custody of crypto assets through multisig and social recovery wallets.
Given the rising frequency of cryptocurrency scams and hacks over the past few years, and the expected bankruptcy of several major cryptocurrency companies in 2022, self-custody and maintaining adequate wallet security procedures has never been more important.
In a post on the r/ethereum community on Reddit on March 16 titled "How I think about choosing guardians for multisig and social recovery wallets," Buterin detailed how he approaches wallet security. Although they are structured differently, multisig and social recovery wallets rely on guardians, which act as external sources to recover funds or approve transactions. Typically, guardians can be a group of external wallets belonging to the same person or addresses controlled by other people or entities.
According to Buterin, decentralized wallet guardians are important because having multiple guardians offers a "tricky trade-off: you can trust others less, but you also concentrate more power on yourself, if You will be hacked, coerced, incapacitated or killed." Buterin went on to suggest that someone’s guardians should not know each other, as this “significantly reduces the risk of them colluding” to attack their wallets and assets. However, if an accident happens to the wallet owner, they should still be able to find each other.
"If something happened to you, they'd still be able to find each other because people would automatically think of the obvious standard protocol (such as contacting your family) in this situation," he wrote. Additionally, the ethereum co-founder suggested that people should "instruct guardians to ask a security question" that only they and guardians would know when confirming the action and only when the correct answer is given.
For degen traders or those who are not in the long-term hodl game, the ethereum co-founder also emphasized that they should use guardians that can respond quickly to meet their rapidly changing needs. “If you’re doing something regressive with an on-chain contract, you probably need to act quickly: withdraw funds if the contract has a bug, move funds if you’re close to being liquidated, etc. If your requirements include this, then you Looking for guardians who can act quickly at short notice."
Finally, Buterin recommends testing each guardian at least once a year, as this will confirm that they "have not forgotten or lost their account." Given the rising rate of cryptocurrency scams and hacks over the past few years, and the bankruptcy of several cryptocurrency companies in the last year, maintaining adequate wallet security procedures has never been more important.
