Lit Protocol empowers users to create and manage distributed cryptographic key pairs for condition-based encryption and programmatic signing.
It’s a decentralized key management network that can replace centralized key custodians and other key management solutions.
Speaking at EthGlobal, Debbie Ly, Head of Developer Relations of Lit Protocol, explained the advantages of using the protocol for key management in the Web3 space.
For more context, Lit Protocol is a decentralized key management network that provides encryption, signing, and compute services.
It aims to give individuals agency within Web3 ecosystems by providing users with a private key that is interoperable across decentralized finance (DeFi), decentralized autonomous organizations (DAO), and non-fungible tokens (NFT) on Ethereum Virtual Machine (EVM), Cosmos, and Solana chains.
How does Lit Protocol work
Describing how the protocol works, she said that Lit decentralizes public key cryptography using threshold cryptography.
This involves generating shares of a public-private key pair through a process called Distributed Key Generation (DKG). Notably, the private keys for this pair never exist in their entirety.
In traditional public key cryptography, a user has a pair of keys: a public key (known to everyone) and a private key (kept secret).
The public key is used to encrypt data and verify digital signatures, while the private key is used to decrypt data and create digital signatures.
Threshold Cryptography means that instead of one entity (or user) holding the complete private key, it is divided into multiple shares distributed across various nodes.
The key idea here is that no single node has access to the entire private key, enhancing security and reducing the risk of a single point of failure.
During DKG, the nodes collaborate to generate shares of the public-private key pair. Each node contributes a share, and the protocol ensures that the private key is never assembled in its entirety.
This process is essential for the security and decentralization of the protocol.
She added that Lit nodes hold private key shares, which can be used for signing and decrypting data, just like a conventional private key.
These shares are used for cryptographic operations just like a regular private key.
Nodes can utilize their private key shares for signing data (creating digital signatures) and decrypting data. However, it’s important to note that no single node has access to the full private key, which enhances security.
Two core products: Encryption and Signing
Debbie also told the audience that Lit protocol offers two basic products – encryption and signing. Encryption allows you to encrypt and decrypt information, making it accessible only to authorized parties based on on-chain conditions and credentials.
For example, a user can set conditions like membership in a DAO, holding a specific NFT, or owning a certain amount of ETH to unlock access.
On the signing side, programmatic signing enables a user to interact with blockchains, databases, storage networks, and other state machines through digital signatures.
This opens up a world of possibilities, from decentralized finance (DeFi) use cases to cross-chain bridges and much more.
Other aspect of the Lit protocol she itemized are Session signatures which are used to sign requests to Lit nodes; and Account abstraction which introduces conditional gas payments.
