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The original was posted on /r/ethereum by /u/crypto5000 on 2023-11-08 17:05:46+00:00.
Hot allowances are the crypto version of the traditional allowance. They are a brand new way to get your family and friends on-chain using ETH.
How simple are hot allowances? For the receiver, they are dead simple. There’s no social logins, phone numbers, emails, bank information, names, home addresses, browser extensions, mobile apps, or key management. The receiver just needs a browser and enters the funder supplied password at an installation link. It’s 10x easier than setting up a google account and 100x easier than setting up a centralized exchange account.
How does it work? A hot allowance splits the crypto complexity between the funder and receiver. The funder deploys the smart contract, handles key management, and funds the allowance. The funder can manage the hot allowance by stopping, restarting or sweeping the allowance funds in the contract. Since the hot allowance is a periodic payment to the receiver, if the receiver gets hacked or phished, only the claimed portion of the allowance is primarily at risk.
Technical Note: Reverse social recovery Hot allowances invert the social recovery process. Rather than someone setting up a wallet and assigning guardians to recover the account, with reverse social recovery, the guardian creates the allowance and delivers it to the user. This is the major insight that makes hot allowances suitable for crypto beginners.
Are hot allowances non-custodial? Hot allowances are non-custodial and have no hard dependencies on hotallowance.com. The funder creates the hot allowance on their local device and then encrypts the data. The encrypted data is then sent to the receiver for installation via a url link. The receiver decrypts the hot allowance locally on their device. The hotallowance.com website is not required. It just streamlines the initial handshake and helps both funders and receivers manage their allowances.
I’ve created a few demo ETH hot allowances on the Ethereum Sepolia Testnet and Layer 2 Testnets. These are one-time install urls, so please only use one. Give other people a chance to try it out. If you want to create your own hot allowance (the exact same code is used for both mainnet and testnet), go to
Installation Url: https://hotallowance.com/testnet/install.html?a={1{fJ37zP(3OhY)M@oQI Security Phrase: ethRedditDemo1
Installation Url: Security Phrase: ethRedditDemo2
Installation Url: https://hotallowance.com/testnet/install.html?a=jR07z-Yb1_lE4-^09kix Security Phrase: ethRedditDemo3
Installation Url: [https://hotallowance.com/testnet/install.html?a=(o4y@AsGYsuz{QtKjjuj](https://hotallowance.com/testnet/install.html?a=(o4y@AsGYsuz{QtKjjuj) Security Phrase: ethRedditDemo4
Installation Url: https://hotallowance.com/testnet/install.html?a=zqAIgdO}X8njVJy34Veo Security Phrase: ethRedditDemo5