Cardano founder Charles Hoskinson has revealed an experimental smart contract designed to help users recover lost self-custody wallets without exposing their secret recovery phrases.
The proposed system would allow users to reclaim ADA and Cardano Native Tokens (CNTs) from a recovery pool by proving ownership of their wallet through a zero-knowledge proof. Instead of revealing the wallet’s 24-word recovery phrase, the cryptographic method would verify ownership while keeping the phrase private.
I’ve begun experimenting how to develop a recovery smart contract that can vend out from a pool of Ada and CNTs using a zero knowledge proof of possessing the 24 keywords that generate a wallet. I’ll sync with @Quantumplation @SebastienGllmt and the Midnight team on what is…
— Charles Hoskinson (@IOHK_Charles) June 26, 2026
Hoskinson shared the early concept on X, noting that development is still in its testing stage. He added that he plans to collaborate with Quantumplation, Sebastien Guillemot, and the Midnight team as the project evolves.
How would the recovery system work?
The experimental design replaces the need for a trusted third party during wallet recovery with a smart contract.
Under the proposal, users who lose access to their wallets could submit a zero-knowledge proof showing they own the original 24-word recovery phrase. Once verified, the smart contract would release ADA and Cardano Native Tokens held in a designated recovery pool without exposing the recovery phrase.
When asked whether the system could become a standard for self-custody wallets across the crypto industry, Hoskinson said the project is focused on solving the “white-hat issue” rather than creating a universal wallet standard.
He also said the blockchain itself would effectively act as the custodian during the recovery process instead of relying on trusted intermediaries.
Cardano development moves ahead despite market pressure
Cardano continues to push new ecosystem developments despite weaker market conditions.
Hoskinson has recently outlined plans for a globally distributed Cardano Summit featuring dedicated spaces for decentralized applications and ecosystem projects.
He has also defended Input Output’s use of artificial intelligence, saying AI agents will eventually help manage community updates, coordinate ecosystem activities, and support the development of Midnight.
According to Hoskinson, AI tools will become increasingly important as Cardano’s ecosystem grows. He also outlined an ambitious vision for the blockchain network, describing it as a potential global operating system designed to reduce the cost of trust across financial systems, businesses, and governments.
Can rising network activity support ADA?
While development continues, on-chain activity has also picked up.
Data from Santiment shows Cardano recently recorded around 29,025 daily active addresses, marking a multi-year high. The network also accounted for roughly 0.33% of all crypto-related social discussions, reflecting stronger community engagement.
Santiment noted that previous periods combining rising network activity with increased social attention during fearful market conditions have sometimes been followed by modest price recoveries. However, the analytics platform cautioned that the trend does not guarantee another rally.
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