The Cost of Centralized Recovery for a Decentralized Soul

Recovery services holding encrypted shards or acting as multi-sig signers become high-value honeypots. A single breach compromises the entire user base's sovereignty, mirroring exchange hacks.

• Attack Surface: Centralized API endpoint or key management system.
• Consequence: Mass account draining, as seen in traditional custodian failures like FTX or Mt. Gox.
• Irony: Recreates the custodial risk Web3 wallets were built to escape.

A centralized recovery entity is a legal entity, subject to jurisdiction and court orders. User data and recovery capabilities can be seized or frozen by state actors.

• Precedent: Tornado Cash sanctions demonstrate regulatory targeting of infrastructure.
• Risk: Recovery provider compelled to silently hand over keys or deny service.
• Outcome: Decentralized identity becomes subject to centralized political risk.

Concentrated control enables malicious insiders or founders to exit-scam. Unlike a decentralized protocol where code is law, a company's private keys are ultimate authority.

• Vector: Rogue employee or founder with database/root access.
• Incentive: Direct financial gain from extracting user assets or selling access.
• Trust Assumption: Requires faith in a legal corporate structure, not cryptographic guarantees.

Dependence on a service's uptime makes recovery impossible during outages. A DDoS attack, cloud provider failure, or simple bankruptcy renders the 'soul' inaccessible.

• Dependency: Relies on AWS/GCP, DNS, and the company's operational health.
• Contradiction: Creates availability risk for an identity meant to be persistent and user-controlled.
• Example: Similar to MetaMask dependency on Infura, but for the most critical function.

Centralized help desks and support channels are prime targets for phishing and SIM-swapping attacks. Convincing one support agent can bypass all cryptographic security.

• Weakest Link: Human customer service, not cryptographic proof.
• Tactic: Forgery, bribes, or deepfake attacks against verification processes.
• Result: Bypasses the entire security model of the underlying wallet.

A centralized service may deprecate support for a blockchain or standard, orphaning identities. Decentralized protocols like Ethereum or Bitcoin evolve via consensus, not corporate roadmap.

• Vendor Lock-in: Your soul is tied to a company's continued interest and compatibility.
• Decision Maker: A product manager, not a decentralized community.
• Outcome: Forced migration or permanent loss if the service sunsets.

Most social recovery wallets rely on a centralized guardian service or a multi-sig controlled by the same entity. This recreates the very custodial risk decentralized identity aims to solve.

• Single Point of Censorship: A guardian can be compelled to freeze or deny recovery.
• Regulatory Attack Surface: Centralized services become targets for KYC/AML enforcement, compromising privacy.
• Contradicts Core Ethos: Shifts trust from code and cryptography back to legal entities and reputation.

Recovery schemes dependent on a user's personal social graph fail under stress. Friends lose keys, fall out, or become unresponsive.

• High Attrition Rate: Over 5+ years, a significant portion of a user's designated guardians will be inactive.
• Recovery Deadlock: Requires synchronous cooperation from a majority, creating coordination failure.
• Incentive Misalignment: Guardians bear liability and work for no reward, leading to opt-out.

Recovery must be a programmable, credibly neutral protocol layer, not a managed service. Think EigenLayer for security, not a friends list.

• Economic Security Pool: Stake delegated to a decentralized network of operators (like Obol, SSV Network) backs recovery actions.
• Automated & Permissionless: Recovery triggers via on-chain conditions (time-locks, activity proofs), not human consensus.
• Sovereignty-Preserving: User defines rules; the network executes them without interpreting intent.

Social recovery exposes your identity graph on-chain. Every recovery attempt publicly links your wallet to your guardians, deanonymizing your entire network.

• Metadata Explosion: Creates a mappable web of associations for chain analysis firms like Chainalysis.
• Permanent Ledger: Even failed recovery attempts are immutable, public records of your social connections.
• Weakens Pseudonymity: The foundational privacy model of Ethereum and similar chains is compromised.

While EIP-4337 (Account Abstraction) decentralizes signature logic, it centralizes execution power. User operations are routed through a few dominant bundlers (like Stackup, Alchemy).

• Censorship Vector: Bundlers can filter or reorder recovery transactions.
• MEV Extraction: Recovery transactions are high-value targets for bundler-level MEV.
• Reliance on RPCs: Bundlers depend on centralized RPC providers, creating a dependency stack.

The only viable end-state is recovery logic verified by decentralized compute. This moves trust from entities to cryptographic proofs.

• ZK-Proof Guardians: Recovery authorization is proven via zkSNARKs (using Risc Zero, SP1) without revealing guardians.
• Light Client Finality: Recovery conditions verified against a Succinct Labs-style light client proof of chain state.
• Credible Neutrality: The proof is either valid or invalid; no room for human interpretation or coercion.