On-Chain Key Management

On-chain Key Management refers to the practice of managing public keys, permissions, and identity-related metadata directly on a blockchain. This allows for transparent, auditable, and immutable control over access rights to decentralized financial services.

By storing key-related data on-chain, protocols can enable features like decentralized recovery, where a group of trusted contacts can help a user regain access to their account. It also allows for complex permission structures where different keys have different levels of authority within a smart contract system.

In the context of derivatives, this provides a clear, verifiable record of who is authorized to perform specific actions, which is essential for compliance and risk management. This approach shifts the burden of key management from centralized entities to the user, supported by the security guarantees of the blockchain.