The LAW protocol describes off-chain wallet assignment transactions where a distributed ledger network (COVAL Sidechains) is used to log the assignment of wallets to users and the status of those wallets as Owned or Unowned. This simple concept is the basis for a secure and trusted wallet transport system and is at the core of the COVAL platform.
LAW uses a concept of Owned and Unowned Wallets as well as users that are either the Owner or Holder of wallets. The LAW Sidechain ledger handles the assignment of wallets to users. An Unowned Wallet can be “held” by a user. Wallet Holders are able to:
- Request Ownership of Wallet
- Send Wallet to other users
- Receive tokens to addresses in the wallet
A Wallet Holder does not have direct access to the wallet/private key while the wallet status is Unowned but they control the ability to own the wallet by making a request to the LAW Sidechain ledger API which confirms if that user is the current Wallet Holder or not. Only the current validated Wallet Holder is able to make this wallet ownership request. Once the request is validated and approved via the ledger’s consensus algorithm, the user becomes the Wallet Owner and now solely controls the private key and ability to unlock the wallet and move any tokens inside it. Once an owner of a wallet, that wallet can no longer be sent to anyone else as it is effectively a private personal wallet at this point. Wallet Owners are able to:
- Send tokens that are in the wallet to other wallet addresses
- Receive tokens to addresses in the wallet (same as wallet holders)