Ripple teams to develop a secret management protocol.

Ripple, the issuer of XRP tokens, has formed a strategic alliance with Algorand and Hedera, aiming to change the management of cryptography.

This partnership will inaugurate the Derek Alliance, which includes Swirlds Labs and XRPL Labs among its founding members.

What is the DeRec Alliance?

Direc Alliance is committed to improving digital asset recovery through an open source protocol. This system enables secure and confidential recovery of digital secrets such as passwords and keys using a method based on secret sharing.

Founding members including Ripple are crucial in the Technical Oversight Committee (TOC). They influence the governance and policies that shape the future of digital asset security. The TOC provides expert oversight and direction, which is critical to guiding the alliance's strategic initiatives.

Read more: What is a Private Key in Crypto?

As the adoption of digital assets has increased, the demand for this system has increased. Traditional recovery methods often put assets at risk or cannot be recovered at all if owners lose their keys.

For example, Rain Lohmus of LHV Bank cannot acquire 250,000 Ethereum worth more than $700 million. Also, former Ripple CTO Stefan Thomas was locked out of a Bitcoin (BTC) wallet due to a forgotten password. Thomas' 7,000 BTC is worth more than $441 million.

The DeRec protocol involves a network of ‘friends' or businesses – helpers – who hold part of the user's digital secret. If the user loses access to their device or data, these assistants can collaboratively reconstruct the password. This system ensures that no assistant is intruded into complete privacy, maintaining high security and privacy without compromising work.

In addition, the system is designed to automatically adapt to changes such as when assistants join or leave. This feature preserves the integrity of the secret despite changes in the user's network of assistants.

“The Derrick Alliance solves one of the major challenges of crypto adoption—secure and user-friendly private key management. By setting clear standards for key recovery, this collaboration in the crypto industry allows individuals to control their digital assets with confidence,” said RippleX Senior Vice President Marcus Infanger.

Despite its progress, Ripple faces ongoing legal challenges from the US Securities and Exchange Commission (SEC). For example, on May 7, the SEC objected to Ripple's plan to issue a “new unregistered crypto asset.”

Read more: Everything you need to know about Ripple vs SEC

However, the SEC did not mention more details about the new crypto asset.