Diversified Set of Guardians Required for Safe Self-custody: Vitalik Buterin

The need of having a diverse collection of "guardians" to maximize the safety of crypto asset self-custody via multisig and social recovery wallets has been underlined by Ethereum co-founder Vitalik Buterin.

Given the ever-growing number of crypto scams and hacks over the past few years, and several significant crypto enterprises going bust in 2022, the significance of self-custody and keeping proper wallet safety practices has never been more critical.

In a March 16 Reddit post on the r/ethereum community titled "How I think about appointing guardians for multsig and social recovery wallets," Buterin provided a detailed breakdown of his wallet security strategy.

While their designs differ, both Multisig wallets and social recovery wallets rely on guardians, who function as external sources to recover funds or approve transactions. Guardians can be groups of external wallets owned by the same person or addresses controlled by other people/entities.

Buterin believes that it is critical to decentralize wallet guardians because owning more than one guardian provides a "tricky tradeoff: you get to trust other people less, but you're also concentrating more power into yourself, which can create a risk if you get hacked, coerced, incapacitated, or die."

"My rule of thumb is that there should be enough guardians controlled by other individuals so if you disappear, there will be enough guardians left to collect your funds."

Buterin went on to say that a person's guardians should not be aware of each other, as this "significantly minimizes the possibility that they conspire" to target their wallets and assets, but they should still be able to locate each other in the event that something happens to the wallet owner.

"If something happens to you, they will still be able to find each other, because there are evident standard protocols that naturally occur to people's minds in such a case (for example, call your family)," he wrote.

Furthermore, the Ethereum co-founder advised that while confirming an operation, people "instruct guardians to ask a security question" that only they and the guardian will know, and only confirm when the proper answer is supplied.

The Ethereum co-founder also underlined that degen traders, or individuals who are not making long-term HODL plays, should use guardians who can respond swiftly to meet their fast-paced needs.

"If you're doing degen activities with on-chain contracts, you may need to act quickly: pull money out if a contract has a vulnerability, transfer money around if you are near to being liquidated, etc. If this is one of your requirements, you should look for guardians who can respond promptly and on short notice."

Finally, Buterin advised testing each guardian at least once a year to ensure they "haven't forgotten or lost their accounts."

Given the ever-increasing number of crypto scammers and hackers in recent years, as well as several crypto organizations going bankrupt last year, keeping adequate wallet safety protocols has never been more crucial.