Over the past decade, crypto took the world by storm, offering a new way for people to invest, save, and transact. However, while many focus on the exciting potential of digital assets, a crucial topic often gets overlooked: what happens to your crypto wealth when you pass away? In this article, we’ll explore how crypto wealth can be lost when someone dies and how an inheritance protocol like GenWealth on the Cardano blockchain can help solve this problem.
The Problem: Lost Crypto Wealth
Imagine a scenario where an investor or crypto enthusiast has accumulated a substantial amount of digital assets over the years. They’ve invested wisely, and their portfolio has grown significantly. However, if that person were to pass away unexpectedly, their family might face a challenge tracking or recovering their assets.
The primary issue is that cryptocurrencies are typically secured by private keys, which are like passwords that grant access to the digital assets. If the owner of these keys doesn’t share them with anyone, or if there isn’t a plan in place for accessing them, the assets can become permanently inaccessible. It’s estimated that billions of dollars worth of cryptocurrency are locked away, simply because the owners died without leaving access instructions.
In addition to the private key challenge, many people don’t have a clear plan for their digital assets. Traditional inheritance laws often don’t apply to cryptocurrency, leading to confusion and potential disputes among heirs. This can result in lengthy legal battles, further complicating the transfer of wealth.
The Solution: A Trustless, Non-Custodial Inheritance Protocol
An inheritance protocol is a system designed to help individuals pass on their digital assets, even after they are gone. By using a well-structured protocol, you can ensure that your loved ones can access your crypto wealth and this id where GenWealth comes into play. Built on the Cardano blockchain, GenWealth offers a solution for managing and transferring cryptocurrency assets. GenWealth helps you plan your crypto assets in a secure and trustless manner, ensuring they’re managed according to your wishes in the event of unforeseen circumstances.
Let’s break down how GenWealth can help ensure that your digital assets are passed on according to your wishes.
Overview of GenWealth and How it Works
GenWealth is designed to solve the huge problems and ineeficiences in the inheritance industry through blockchain. In a typical setting, the probate of an inheritance case could take between 3% and 7% of the estate. Sometimes, potentially higher costs in terms of resources and time. To solve this problem, GenWealth built a dApp that enables beneficiaried to reclaim crpto assets in a trustless manner, without the need of a third-party.
The GenWealth dApp allows you to create vaults, which are sets of smart contracts that function like self-custody wallets, giving you full control over their contents. With a vault, you can define rules for asset distribution after you pass away. When you create a vault, you receive a unique vault address, a vault key, and you also set a deadline. This deadline can be extended periodically as a Proof of Life to confirm you’re alive.
Within your vault, you can create subdivisions called pockets to allocate your assets. You can then mint corresponding pocket keys to distribute to beneficiaries. These pocket key tokens allow beneficiaries to claim their share of the assets from the respective pockets once you are unable to prove you’re alive, which occurs after the deadline has fully elapsed.
GenWealth is necessary and useful for Cardano users, but also extremely necessary in the real world by will executors and estate managers, as it:
- Provides clarity on who owns the assets.
- Facilitates the process of locating assets.
- Reduces the cost and the time required to transfer assets.
- Makes it easier to ensure the correct distribution of assets.
- Removes the need for trust in the process of respecting the will of the deceased.
Additionally, executors and estate managers can save a lot of time and money, create a better experience for their clients, and become far more productive.
GenWealth’s Inheritance Compliance Calculator
Since GenWealth is a crypto recovery and inheritance dapp with huge potential to be used in the real world for Inheritance Firms, it should comply with inheritance law across multiple countries. It requires time and calculations to work out the correct distribution of assets using the app, reducing the efficiency of using this tool and creating a poor customer experience for these professionals, and even for regular individual users looking to comply with inheritance law.
The GenWealth team submitted a recently funded proposal in Fund 13 proposal, with an aim of building an Inheritance Compliance Calculator, that makes it easy for professionals and current users to comply with Inheritance regulations all over the world. In the process, the team will leverage the feedback and conversations with inheritance professionals.
The Inheritance Compliance Calculator tool will get data from the blockchain, allow users to estimate how much each of the beneficiaries is getting, check if the division of assets complies with legislation in their country, and even allow them to account for things such as taxes by creating subdivisions for taxation purposes.
With this tool, you can simulate how to move your assets across beneficiaries (saving on transaction fees or accounting for other relevant assets outside of crypto) to ensure that your wishes are respected in a legally compliant manner and even account for real-world assets that you own. This tool is flexible, as the user can and should adapt it to their own jurisdiction and the specific quotas and rates required for compliance in their country.
This tool has huge potential not only for current Cardano users but also opens the door to conversations to start onboarding these inheritance professionals into Cardano and with it the trillions of dollars in assets they manage.
GenWealth’s Roadmap and Long-Term Vision
GenWealth long-term vision is to develop a complete solution for managing inheritance on Cardano. This will comprise of the GenWealth dApp to manage assets and make distribution, a calculator to valuate assets and ensure compliance and a tokenization solution for real-world assets that inheritance firms can use.
In terms of the Roadmap, the tweet below summarizes some key milestones that GenWealth was able to achieve over 2024, creating a solid foundation for the upcoming developments.
Here’s a closer look at the complete roadmap:
| Year/Quarter | Milestone | Status |
|---|---|---|
| 2023 Q3 | On Chain Proof of Concept | Completed |
| 2023 Q4 | Off Chain for Internal Testing | Completed |
| 2024 Q1 | UI/UX Design for Public Testnet | Completed |
| 2024 Q2 | Frontend and Backend Development | In progress |
| 2024 Q3 | Public Testnet and Bug Bounty | Planned |
| 2024 Q4 | Audit and Product Improvements | Planned |
| 2025 | Cardano Mainnet Release | Planned |
| 2026 | Explore Another Blockchain (TBD) | Planned |
| 2030s | Serve 4-5 Blockchains (TBD) | Planned |
Putting it all together
Many individuals accumulate significant wealth in cryptocurrencies, but the private keys that secure these assets can become inaccessible if there’s no plan is in place. This loss can result in billions of dollars being permanently locked away, leaving families confused and fighting over an inheritance that may not be easily transferred due to the lack of applicable traditional laws.
GenWealth is addressing a commonly-overlooked issue on loss of crypto wealth and inheritance. It enables users to create customized inheritance plans, securely store private keys, and automate the distribution of assets to designated heirs. This solves two key problems- legal challeges associated with inheritance and loss of crypto assets.
To learn more about GenWealth, check out their offical website or follow their updates on X (formerly Twitter)
