Identity Recovery without Central Authorities

Losing access to your private keys can be catastrophic in Web3. Without a secret seed phrase or private key, users risk permanent asset loss, inability to participate in DAOs, and total exclusion from decentralized applications. Traditional custodial solutions reintroduce central points of failure and counterparty risk, undermining self-sovereignty. To truly embrace a decentralized future, we need robust, trustless, and user-friendly identity recovery mechanisms that require no central intermediary.

In this deep dive, we’ll explore:

• Why self-custody demands decentralized recovery
• Social-recovery schemes with appointed guardians
• Multi-signature guardianship and threshold wallets
• Biometric-anchored key backups
• Shamir’s Secret Sharing and proactive secret refresh
• Reputation-based recovery oracles and incentivization
• UX patterns for smooth account restoration
• Security trade-offs and attack mitigations
• Reference implementation patterns on Pavilion Network
• Future research directions

1. The Self-Custody Recovery Challenge

Self-custody is empowering but unforgiving. Onboarding flows commonly prompt users to back up seed phrases, but in practice:

• Users lose or misplace seed backups
• Writing down 12–24 words is error-prone
• Hardware wallets can be damaged or stolen
• Inexperienced users lack clear recovery guidance

Custodial bridges (e.g., centralized key-escrow services) solve usability at the cost of introducing a trusted third party, negating censorship resistance and creating regulatory chokepoints.

A decentralized recovery protocol should satisfy:

1. Non-custodial: No single actor can reconstruct keys unilaterally.
2. User-centric: Restoration flows are intuitive and accessible.
3. Resilient: Tolerant of offline or malicious participants.
4. Privacy-preserving: Minimize on-chain personal data exposure.

2. Social Recovery with Guardians

2.1 Concept Overview

Social recovery enlists trusted contacts—“guardians”—to collectively authorize a recovery transaction. Guardians might be friends, family, or reputable services. The user designates n guardians and selects a threshold k such that any k of n can recover access.

2.2 Workflow

1. Account Initialization

   • Deploy a smart contract wallet (e.g., Gnosis Safe variant) controlled by the user’s key.
   • Store guardian addresses and threshold k in the contract.

2. Loss Detection

   • User loses private key and signals intent to recover via UI (e.g., “Start account recovery”).

3. Guardian Approval

   • Guardians receive off-chain notifications (email, messenger, or gasless on-chain transaction request).
   • Each guardian signs a recovery approval message.

4. Threshold Reconstruction

   • Once k signatures are collected, user submits them on-chain to the recovery method:

     function recover(address newOwner, bytes[] memory signatures) external {
         require(verifyGuardians(signatures, newOwner), "Invalid guardian approvals");
         owner = newOwner;
     }
     

   • Contract updates ownership to newOwner (a fresh key).

2.3 Advantages & Considerations

• Human Trust: Leverages existing relationships.
• Flexibility: Guardians can be individuals or multisig services.
• Off-chain Coordination: Reduces gas costs (only final recovery on-chain).
• Threat Model: Guardians must be chosen carefully; collusion can misappropriate access.
• Privacy: Guardian list is public on-chain—can leak social graph.

3. Multi-Signature Guardianship and Threshold Wallets

Social recovery scales with threshold cryptography. Rather than simple guardian signatures, wallets can natively support n-of-m multisig logic:

User key shard (1-of-n) + Guardian shard (m-of-n) → threshold wallet

3.1 Sharded Key Generation

• Off-chain key share distribution: Use an MPC setup to split the wallet’s private key into n shares.
• Distribution: One share to the user’s device, others to guardians or backup services.
• Reconstruction: Any k out of n shares can recombine to sign transactions.

3.2 Wallet Interaction

• Everyday signing: User’s client uses its share to co-sign transactions with a lightweight coordinator (gasless aggregator).
• Recovery mode: If the user’s share is lost, guardians combine k shares to generate a new key or rotate shares.

3.3 Example: Threshold Wallet Contract

contract ThresholdWallet {
    uint256 public threshold;
    mapping(address => bool) public isGuardian;

    function init(address[] memory guardians, uint256 k) external {
        require(k <= guardians.length, "Invalid threshold");
        threshold = k;
        for (uint i; i < guardians.length; i++) {
            isGuardian[guardians[i]] = true;
        }
    }

    function recoverOwner(address newOwner, bytes[] calldata sigs) external {
        require(_countValid(sigs) >= threshold, "Not enough guardian approvals");
        owner = newOwner;
    }
    // verify _countValid omitted for brevity
}

This approach hides the user’s share distribution off-chain, preserving privacy of guardian roles.

4. Biometric-Anchored Key Backups

4.1 Concept

Leverage on-device biometric modules (Secure Enclave, Trusted Execution Environment) to encrypt key shares:

1. Key Derivation: User sets a PIN/biometric.
2. Encryption: Private key share encrypted under a biometric-protected keystore.
3. Cloud Escrow: Encrypted share backed up to user’s cloud account (iCloud, Google Drive).

4.2 Recovery Flow

• User authenticates with biometrics on new device.
• Client downloads ciphertext from cloud.
• On-device TEE decrypts and reconstructs key share.
• Biometric data never leaves device; cloud only stores ciphertext.

4.3 Strengths & Limitations

• Usability: Familiar smartphone flows.
• Attacks: Device compromise or stolen credentials risk share exposure.
• Decentralization: Relies on major cloud providers—partial centralization trade-off.

5. Shamir’s Secret Sharing and Proactive Refresh

5.1 Shamir’s Scheme

Split a private key s into n shares such that any k can reconstruct:

f(x) = s + a₁x + a₂x² + … + aₖ₋₁xᵏ⁻¹ mod p
Shareᵢ = (i, f(i))

5.2 Proactive Secret Sharing

To mitigate share capture over time:

• Periodic resharing: Guardians engage in a distributed protocol to refresh shares without changing the master secret s.
• Forward security: Old leaked shares become useless after a refresh round.

5.3 Implementation Outline

• Off-chain run an MPC refresh protocol among guardians.
• No on-chain footprint except metadata update of share versions and thresholds.

6. Reputation-Based Recovery Oracles

6.1 Oracle-Style Guardians

Decentralized services stake tokens to vouch for user identity claims. They act as “recovery oracles”:

• Registration: Oracles stake and register a public key.
• User Claim: Lost user submits identity claim (e.g., signed government ID hash, selfie).
• Oracle Voting: Oracles verify claim off-chain and sign attestations.
• Threshold: Upon k oracle attestations, on-chain recovery executes.

6.2 Economic Incentives

• Slash for Fraud: Oracles lose stake if majority attestations are proven false.
• Fees: Users pay recovery fees to oracles, funding the service.
• Reputation Score: Oracles accumulate reputation; high-rep oracles require fewer attestations.

7. UX Patterns for Smooth Recovery

1. Guided Guardian Setup

   • Step-by-step wizard to invite guardians, explain responsibilities, and simulate recoveries.

2. Threshold Visualization

   • Visual progress bar showing how many guardian approvals have been collected.

3. Recovery Dashboard

   • Unified view of recovery requests, guardian responses, and next steps.

4. Fallback Options

   • If guardians are unresponsive, user can switch to biometric or oracle-based flows.

5. Security Reminders

   • Periodic prompts to verify guardian list and refresh biometric backups.

8. Security Trade-Offs and Mitigations

9. Pavilion Network Reference Implementation

1. Smart Contract Wallet

   • Extend ERC-4337 Account Abstraction with recover() method accepting guardian signatures.

2. Off-chain MPC Coordinator

   • Serverless functions (AWS Lambda, Cloudflare Workers) to orchestrate share refresh and guardian notifications.

3. Biometric SDK Integration

   • Mobile library leveraging Secure Enclave / Keychain for iOS and Android Keystore for Android.

4. Oracle Marketplace

   • On-chain registry of recovery oracles with stake, reputation, and fee parameters.

5. Frontend Components

   • React/Tailwind recovery wizard, progress trackers, and fallback toggles.

10. Future Directions

• Decentralized Identity Standards (DID): Compose recovery protocols with W3C DID methods for cross-chain portability.
• Zero-Knowledge Recovery: Use zkSNARKs to prove guardian or oracle attestations without revealing identities.
• Threshold ECDSA / BLS: Expand support for threshold signatures in popular curves to eliminate contract gas costs.
• Automated Guardian Rotation: Periodically refresh guardian sets through community governance.
• Social Graph Analytics: Detect weak or colluding guardian networks using graph algorithms.

Decentralized identity recovery is essential for a resilient, user-friendly Web3. By combining social trust, threshold cryptography, biometric safeguards, and economic incentives, Pavilion Network can offer seamless self-custody without central intermediaries. As implementations mature, community feedback and rigorous security audits will be critical to refining these designs—and ensuring no user is ever permanently locked out of their digital life.