Self-Custody 2.0: Beyond Seed Phrases and Hardware

Self-custody became popular with one promise:

“Not your keys, not your coins.”

The problem is that most self-custody setups still look like a hack:

• One hot wallet for everything

• A piece of paper with 24 words

• A hardware wallet you rarely use

• No real plan if something goes wrong

That worked when your stack was a few hundred dollars.
It does not work when it’s years of work and serious wealth.

Self-Custody 2.0 is about moving from “don’t get hacked today” to “can this setup survive years, incidents, and life events?”

This is what we mean by continuity-grade self-custody.

1. What Self-Custody 1.0 Got Right (and Wrong)

Self-Custody 1.0 nailed one important thing:

• Keep keys with users, not exchanges.

But it also created new problems:

• Seed phrase stress

  • Paper backups. Metal plates. Screenshots.

  • People sharing seeds “temporarily” with partners, accountants, or friends.

• Hot wallet overexposure

  • One browser extension or mobile wallet holding most of your value.

  • Signing everything from random dApps to large transfers from the same device.

• Hardware friction

  • Hardware wallets that are annoying to use.

  • So people buy them, set them up once, then ignore them for months.

• No continuity plan

  • If you lose your device, what exactly happens?

  • If something happens to you, who knows what to do?

Most “self-custody” setups are really:

“I hope nothing goes wrong, and I hope I remember where that paper is.”

That’s not enough for serious wealth.

2. The Real Problem: Continuity, Not Just Security

Security is usually framed as:

• Don’t get hacked

• Don’t sign malicious transactions

• Don’t leak your seed

That’s necessary, but not sufficient.

What really matters once your stack is big:

• Can you reliably operate this setup under stress?

• Can you recover from incidents without improvising?

• Can your future self or your family understand what to do?

Continuity-grade self-custody is about answering:

• “What if my phone dies?”

• “What if my hardware wallet is lost or destroyed?”

• “What if my email gets compromised?”

• “What if I’m not around, but my assets still matter?”

If your only answer is “I hope I find my seed”, that’s not a system.
That’s a bet.

3. Principles of Self-Custody 2.0

Self-Custody 2.0 keeps the core principle:

• You control your keys.

But upgrades the architecture and operating model.

Here are the key principles.

3.1 Seedless, passkey-first access

You shouldn’t be forced to:

• Store one mega-secret string

• Type 24 words into devices

• Hand that phrase to anyone else

Self-Custody 2.0 uses:

• Passkeys and secure enclaves for everyday access

• Hardware-backed auth on your phone

• No raw seed phrases

3.2 Two distinct modes, not one big blob

Trying to run everything from one wallet is a mistake.

You need two risk postures:

• Everyday Mode

  • For daily use, gas, DeFi experiments, smaller balances

  • Faster, more flexible, still non-custodial

  • Optimized for UX

• Sovereign Mode

  • For long-term, high-value holdings

  • Stricter rules, hardware anchor, offline backup

  • Optimized for continuity and resilience

Both are self-custody.
They just operate at different risk levels.

3.3 Policy > vibes (“hot vs cold” isn’t a strategy)

“Hot” vs “cold” is vague and subjective.

Self-Custody 2.0 uses explicit Transaction Policies:

• Limits (per tx / per day / per address)

• Whitelists and restrictions

• Rules for when hardware must co-sign

• Optional delays for large transfers or policy changes

Instead of:

“This is my hot wallet, I’ll be careful.”

You get:

“Any transfer above X requires Hardware Approval and a delay.”
“Only these addresses are treated as safe.”

Policy replaces hand-wavy discipline.

3.4 Hardware anchor for serious wealth

Software-only is not enough once the stakes are high.

You need a hardware anchor that:

• Holds a key share in a secure element

• Lives outside your daily app/device

• Requires physical interaction for sensitive actions

• Has a clear real-world location and process (safe, vault, etc.)

This doesn’t mean hardware for every single transaction.
It means hardware for high-impact operations and continuity flows.

3.5 A clear continuity story

Continuity-grade self-custody answers:

• How you recover from device loss

• How you recover from hardware loss

• How you survive infrastructure incidents

• How future continuity (and eventually inheritance) can work

You don’t need a complete legal setup on day one.
But your architecture should make it possible without redesigning everything later.

4. How Sovrency Thinks About Self-Custody 2.0

Sovrency is built around this Self-Custody 2.0 model.

At a high level:

• Everyday Mode

  • Portable Key in your phone’s secure enclave

  • Guardian Key on enterprise-grade HSMs

  • Passkey-native access

  • Transaction Policies and Security Engine sitting behind every action

• Sovereign Mode

  • Everything in Everyday Mode, plus:

  • Silicon Key as the hardware anchor for serious wealth

  • Backup Card as the offline safety net for Silicon Key

  • Fully Sovereign, all you need is the Silicon Key (Hardware Device) and Your Portable Key (Your Phone) to have full control over your wallet/asset without relying on any 3rd parties, including us.

Around this, Sovrency runs:

• A Security Engine that applies your Transaction Policies

• SignSight, a “what you see is what you sign” layer so you actually understand what you’re approving

• An MPC engine designed to give you a hot-wallet feel with continuity-grade behavior

The goal is simple:

Everyday use should feel like a modern wallet.
Serious wealth should behave like a well-designed, long-term system.

Without turning you into a full-time ops engineer.

5. How to Start Moving Toward Self-Custody 2.0 (Even Before Sovrency)

Even if you’re not using Sovrency yet, you can start thinking in this framework today.

Ask yourself:

• What is actually “everyday” money vs “sovereign” money?

  • Split your stack mentally (or literally) into those two buckets.

• What rules exist today?

  • Do you have any thresholds beyond “I’ll be careful”?

  • Where is hardware involved, if at all?

• What happens if you lose your main device tonight?

  • Do you know the steps?

  • Does anyone else know them if you can’t act?

• Where does hardware sit in your setup?

  • Is it genuinely part of your process, or just a symbolic object?

Or simple, Start using Sovrency and get the full-stack self-custodial system built for resilience, security and sovereignty.

The point is to stop relying on one seed phrase and vibes.

Self-Custody 1.0 was about taking your assets off exchanges.

Self-Custody 2.0 is about taking your setup seriously enough that it can survive time, accidents, and real life.

That’s the standard Sovrency is building for.