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Your crypto wallets are safeguarded with a seed phrase or public key that keeps unauthorized persons from accessing your funds. However, if you misplace your seed phrase, you automatically lose access to your crypto wallet and might never recover your crypto funds.

How do you solve the issue of losing access to your wallet if you can't find its public key? This is where the crypto social recovery wallet comes in.

Vitalik Buterin, the Ethereum blockchain's founder, first introduced the idea of social recovery wallets. He aimed to help crypto investors overcome the risk of potential loss and safeguard their investments from theft. Social account recovery is now made possible via an Ethereum standard called ERC-4337.

A crypto social recovery wallet is a wallet recovery process that eliminates the need for a seed phrase while guaranteeing the process is fully noncustodial. The wallet allows you to add trusted addresses to your cryptocurrency wallet. It could be wallet addresses belonging to family members or close friendspeople you can trust to retrieve your funds. If you lose your public key, the trusted addresses (guardians) will vote to change the public key or help you regain access to your wallet.

So, you give each guardian a part of your wallet private key, creating a shared secret. When needed, each guardian submits the portion of the public key you gave them until the key is complete, after which you can recover the wallet. You can also remove or add guardians using your public key if you suspect foul play.

Setting up a crypto social recovery wallet is easy, as two well-known wallet providers currently have integrated social recoveryLoopring wallet and Argent wallet.

The Loopring wallet is a smart contract wallet that leverages the power of zkRollup technology to enable fast, cheap, and scalable transactions on Ethereum. This wallet stands out from other options with its social recovery feature, which allows you to regain access to your funds even if you lose your phone or forget your recovery phrase.

Download: Loopring Wallet for iOS | Android (free)

So, here's how to set up and use the Loopring smart wallet:

Argent is a noncustodial wallet that uses smart contracts to enable features such as daily limits, allowed contacts, and social recovery. Like the Loopring wallet, it will enable you to restore access to your wallet if you lose your device or forget your password by using a trusted network of people.

Download: Argent Wallet for iOS | Android | Chrome | Mozilla Firefox (free)

Here's how to set up and use the Argent wallet:

In general, crypto social recovery wallets provide several benefits over regular wallets but also have downsides. So, here are some pros and cons.

With a crypto social recovery wallet, your wallet isn't protected by a single weak link.

Despite its many pros, some things might make you hesitate to get a crypto social recovery wallet.

With public keys being an essential and risky part of preserving investments, moving to a social recovery wallet offers better security.

Although social recovery wallets have shortcomings, with broader adoption in the crypto industry around the corner, the concept is expected to be further developed and improved.

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What Is a Crypto Social Recovery Wallet, and How Does It Work? - MUO - MakeUseOf