// GLOSSARY -- SECURITY & COMPLIANCE

What is Disaster Recovery?

1 min read Updated

Disaster recovery in crypto encompasses the plans and procedures for recovering access to funds and systems after catastrophic events — including key loss, smart contract failures, exchange collapses, and hardware destruction.

WHY IT MATTERS

In traditional finance, banks handle disaster recovery for you. In crypto, you are your own bank — and your own disaster recovery team. Losing access to private keys, seed phrases, or multisig signers can mean permanent loss of funds.

Key disaster recovery practices: geographically distributed seed phrase backups, multisig wallets with distributed key holders, dead man's switch mechanisms, and documented recovery procedures.

For organizations, disaster recovery includes: key management procedures, succession planning (what happens if key holders are unavailable), incident response plans, and regular recovery drills.

FREQUENTLY ASKED QUESTIONS

What if I lose my seed phrase?
If you've lost your seed phrase AND the device with the wallet, funds are likely permanently lost. Prevention: multiple secure backups in different physical locations. Metal backups survive fire/water.
What is social recovery?
A wallet recovery mechanism where designated guardians can collectively restore access. Smart contract wallets (Safe, Argent) support this. Guardians can't access funds individually.
How do DAOs handle disaster recovery?
Through multisig wallets (multiple signers needed), timelocks (delays on major actions), and governance processes. If signers are lost, governance can vote to migrate to new signers.

FURTHER READING

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