💡Abstract

The Locksmith Wallet White Paper

This document describes a virtual wallet that utilizes ERC-1155 NFT standards to model and secure permissions for an extensible on-chain smart wallet platform.

An open access alpha is available on Goërli today at https://locksmithwallet.com/.

Problem Statement

The binary nature of custody is a constant risk in the world of Web 3. Billions of dollars in crypto are lost every year by individuals, exchanges, and crypto companies due to hacks and private key mismanagement. Protecting and sharing keys safely is a significant problem many firms are trying to solve, but balancing security and usability is a persistent challenge.

Power users that put up with the difficult UX of DeFi are well aware that private key management of multiple wallets is a logistical nightmare where any misstep can have major repercussions. Today, navigating crypto “safely” means managing multiple burner wallets and incompatible browser extensions that create an incoherent user experience.

For the crypto-curious that just want to buy and hold, or maybe earn some passive yield, UX often takes precedence over self-custody. Fear of a lost piece of paper, damaged Ledger, house fire, flood, or hard-drive crash makes centralized exchanges and lending desks appear the safer option. Users are forced to trade piece of mind for centralization, KYC, withdrawal limits, and service level agreements.

TradFi institutions are experimenting with blockchain but feel forced to use EVM forks and permissioned protocols to meet their regulatory and fiduciary responsibilities. These players are prepared to bring trillions into DeFi, but they are also the most risk adverse and conservative members of the ecosystem.

Web 3 will never reach a billion users or fully onboard TradFi institutions until safety and control are crypto features–not aspirations.