Some of the features we love most about blockchain and Web3 also create risk for users. The transactions are final and there are no do-overs.
Record keeping is very real. With a little knowledge, preparation and proactive measures, readers can more safely navigate and participate in this exciting space with the comfort of knowing their assets and identities are protected. There’s no reason you can’t safely exist, collect, flex and invest all at the same time.
In a perfect world, Web3 onboarding would start with a tutorial in security and privacy. Only then would the fun and excitement of NFT collecting, investing and ownership begin – in a safe and knowledgeable manner. Regrettably, many novices unknowingly start too hastily and miss these important steps
If you are new to NFTs and ENS, this is your chance to begin your journey the right way. If you have already begun and you’re grappling with how to best manage your assets and identify, we will help you evaluate simple options to course correct that will aid in achieving your security and privacy goals.
For ENS investors and collectors, one of the most effective steps to managing assets and privacy in Web3 is with the strategic organization of our wallets.
You may be dealing with high-value assets, potential IP, and trademark uncertainties, or you simply own a domain that you wouldn’t want to show your neighbor. Either way, privacy may be a critical consideration. If you’re a dev or builder, you may need to protect the secrecy of a project. If you’re looking to market and sell your holdings, a different strategy altogether may be called for. Either way, structure, organization, and naming can be highly effective.
The possibilities are endless but the steps and strategy are the same.
Managing Breadcrumb Data
All blockchain transactions leave a trail of breadcrumbs. No matter how carefully you try to distance your identity from a digital asset, with enough time, interest and know-how, your activity may be traceable. This is where wallets come in. Unique wallets are most definitely your friend.
If you’re starting fresh, you’re in luck. A simple strategy might look like this:
- Wallet 1: Personal, public use
- Wallet 2: Assets for sale
- Wallet 3: Hobby-Identity, for Sports fan or other activity.
- Wallet 4: The Vault-wallet address for the same “Hobby-Identity”
- Wallet 5: Sensitive and private
This structure would enable a user to comfortably own all of these ENS asset categories without a clear link between them. Each wallet can then operate as its own unique entity.
If you adopt this approach you’ll be off to a good start, but you should continue to be cautious and deliberate with your transactions. When starting, remember, that all the wallets in the world only go so far if they’re each funded by a centralized, traceable wallet named after your firstborn child. When moving assets, be deliberate. Don’t send them all at once and send the right ones. Accidentally sending your surname to your private wallet will torpedo your carefully structured organization in an instant.
Many readers are likely already deeply invested in ENS and may not have the luxury of a fresh start. For these individuals, putting distance between their assets and any identifying information might be prudent.
Distancing assets can be best accomplished by moving them through one or more wallets on their way to the final wallet where you intend to store them long-term. Taking this one step further, some may even choose to have the final wallet actually purchase the asset from their go-between – or as I call it “bridge wallet” – thus adding an official sale and transfer to the blockchain.
If you’re willing to do the work and pay the gas, the steps above are a simple and thorough way to create uncertainty around an ENS domain’s true ownership. Realize, however, that in taking the final action, you are creating an immutable record that an asset was sold for a certain amount. Savvy interested parties may look at the history of the domain and understand what likely occurred with its last sale, but others may see that it recently sold for .1 Ethereum and unknowingly use that as a benchmark for its value. Understand the implications of your blockchain moves and plan strategically.
Web3 Wallet Naming
With your wallets structured strategically and your ENS assets in the right place, the final consideration should be its name. While most wallets should be named for ease and clarity, it is not always smart to do so. Think about each wallet name as the storefront for its contents.
For wallets that hold names you’re looking to market and sell, a professional, inviting ENS wallet name that lets others know you’re open for business may attract buyers, brokers, or even browsers. There may be times, however, when leaving a wallet unnamed may actually aid in maintaining privacy. If you are using bridge wallets for distance, leave them unnamed. It’s much more difficult to track movement and ownership of ENS names if you’re hunting for a long hexadecimal address versus a clean, smooth, memorable name.
Using the previous wallet structure, appropriate naming may look like this:
- Wallet 1: vgarciacpa.eth
- Wallet 2: affordablenames.eth
- Wallet 3: bestlakersfan.eth
- Wallet 4: vault.bestlakersfan.eth [this is using “subdomains”]
- Wallet 5: 0x43a89q…. [wallet that does not have an ENS name]
Ultimately, there is no one-size-fits-all strategy for managing your ENS names or any digital asset. Nevertheless, it is worth taking a moment to consider your privacy goals and level of comfort with everything you own. Whether doxed or not, blockchain breadcrumbs are real and an ounce of prevention may end up putting you in a better position for negotiation and privacy in the months and years to come.