Pay Your Friends to Protect Your Keys: One Startup's New Take on Crypto Custody

If you're worried about losing your private keys, try tapping your friends as a recovery network, one startup says.

Customers select a group of individuals, referred to as "Guardians," who each possess parts of users' seed phrases.

If app-users lose access to their crypto assets, they can combine portions of their guardians' keys to recover their funds.

Users can pay guardians ether to protect their key portions.

Vault12's app lets guardians set prices, Skibinsky said.

One user could act as a guardian for $10 per month, while another might charge higher prices but offer more exclusive services.

"We provided this mechanism in the app that owners add ethereum to [their] Vault and this ethereum will go in a smart contract that will monthly pay out guardians the price that the guardian set for their services, and this price will be visible to both [parties] when you set up the Vault."

Ahmad said users can replace their guardians at any point.

"The app will handle all of those kinds of scenarios it'll notify you about the health of your guardians [and] about the health of your assets."

Users can configure their systems to ensure geographical separation for their guardians and set up multiple backup devices to act as a contingency in case any guardians are unavailable, or to protect against natural disasters, Skibinsky said.