Multisig with cosigner
The third model is called "multisig with co-signer." In this model, the asset is secured with a multisig consisting of 3 private keys with any two of them enough to legitimately sign a transaction. The customer holds the first key, the custodian holds the second key, and the key recovery service keeps the third one. For example, in D3ledger
, we've built our safekeeping service with multisig protection.
In normal circumstances, both the customer and the custodian sign the transaction on the order of the customer. The model eliminates the custody risk, and at the same time protects the asset if the customer key is stolen or lost. In that case, the key recovery service signs a transaction on the order of the customer after a thorough check of its identity.
This model makes use of unique features of digital assets to eliminate custody risk while allowing the customer to shift responsibility for the safekeeping of assets to custodians.