NFTs

Saving NFTs with delegate.cash 🛅

Metaversal is a Bankless newsletter for weekly level-ups on NFTs, virtual worlds, & collectibles

Dear Bankless Nation,

A pillar of crypto and NFTs is their self-custody potential, which people can rely on to take full control of their digital things. 

One of the best ways to safely store your own blockchain assets are “cold wallets” like hardware wallet devices. Think Ledgers, Trezors, the GridPlus Lattice, etc. 

The problem? In the NFT space folks often store their blue-chips and grails on cold wallets, but then are compelled to use these wallets to claim airdrops their NFTs qualify for. 

Accordingly, under this security paradigm all it takes to swipe a cold wallet’s precious NFTs is one convincing lookalike scam website tricking a user into signing one transaction they don’t understand. 

Looks like the Cool Cats website, right? Beware, this is actually a screenshot from a real ongoing scam site that’s trying to trick people out of their NFTs!

The good news? With solutions like delegate.cash, you can now keep your NFTs safe while still actively using your cold wallet however you like via delegation. 

For today’s post, then, let’s walk through the basics of delegate.cash and how you can use it to step up your NFT security!

-WMP

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Millions and millions of dollars worth of NFTs were stolen by scammers last year. In September 2022, auditor, developer, and writer foobar introduced delegate.cash, an “immutable primitive to safely claim airdrops for vaulted NFTs,” as a way to help mitigate these scams.  

This NFT safety solution has been gaining traction ever since as a growing number of projects have directly embraced it, including large NFT studios like Yuga Labs. Other notable projects that already support delegate.cash include Art Blocks, CyberBrokers, and Forgotten Runes Wizard’s Cult.

Simply put, delegate.cash lets you secure your valuable NFTs while still actively using them to participate in activities like airdrop claims or DAO governance. 

The system is a smart contract-based registry that, among other things, lets you delegate your cold wallet’s NFT powers to a burner “hot wallet” of your choice like a MetaMask account. Your NFTs will stay in your cold wallet no matter what, but your linked burner can then act on their behalf. 

The delegate.cash UX 101 – image via foobar

With this delegation system, you get the perks of a hardware wallet without having to reach for it every time you need to sign a transaction. 

Additionally, if you do ending up degening into a scam project, any fallout will be limited to your delegated burner that you’ve specifically isolated in case of attack. The NFTs in your cold wallet will remain utterly untouched!

Lastly, keep in mind that delegate.cash is totally immutable (no admin powers or attack vectors), totally onchain (no offchain signature vulnerabilities), and totally independent (self-sufficient with no external dependencies). This trifecta means anyone can reliably use this solution in permissionless fashion. The system is also able to be deployed on any Ethereum Virtual Machine (EVM) chain.

The delegate.cash UI

On delegate.cash and in the context of NFTs, it’s possible to 1) delegate all your cold wallet’s NFT powers to a hot wallet of your choice, or 2) delegate a single NFT’s powers to your desired wallet. 

If you’re interested in the first option, delegating to a throwaway burner, you would follow these steps:

  1. Go to delegate.cash

  2. Connect the cold wallet you vault your NFTs in, e.g. a Ledger device

  3. Copy the address of your designated burner wallet and paste it into the delegate.cash “Wallet” UI like so:

  1. Press the “Submit Delegation” button and complete the transaction with your cold wallet to finalize your entry in the registry

  2. That’s it! You can then track that and future delegations using the “View recent delegations” button below the Wallet delegation UI

  3. Remember: your linked burner will only represent your cold wallet for certain utilities, it can’t be abused to drain any NFTs from within your cold wallet!

If you’re interested in just delegating a single NFT’s power instead, the process is similar to the one described above. You’d flick over to the “NFT” UI, paste in your desired hot wallet to link, then input the address of the NFT contract and your token ID # and fire off the final transaction to finish up. 

NFT scammers have gotten increasingly sophisticated in recent years, so it’s no surprise that look-alike trap websites have ensared plenty of earnest minters so far. 

With solutions like delegate.cash, though, we now have a great defense against this attack vector. We can start turning the tide against these scammers accordingly by teaching more and more people to firewall their valuable NFTs via wallet delegation!

  • Delegate to a hot wallet — If you have any big airdrop claims coming up, consider trying out delegate.cash to defend your grails 🛡️

  • Check out my previous write-up if you missed it: The Open Edition Boom 📈

William M. Peaster is a professional writer and creator of Metaversal—a Bankless newsletter focused on the emergence of NFTs in the cryptoeconomy. He’s also recently been contributing content to Bankless, JPG, and beyond!

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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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