Bagging and unbagging blockchain assets

A server system comprising:

• a hardware-based processor;
• and
• a memory storing non-transitory, computer-readable instructions that, when executed by the processor, causes the server system to:
• generate a random time-based, one-time password (TOTP) key fraction;
• generate a TOTP secret based on the wallet signature key fraction and the TOTP key fraction;
• transmit the TOTP secret to a user device of the user;
• generate a random key fraction;
• generate a public-private key pair based on the wallet signature and the random key fraction;
• invoke a smart contract on a blockchain, wherein invoking causes the smart contract to:
• mint a bag non-fungible token (NFT) to the wallet, wherein the bag NFT represents ownership of the blockchain asset;
• and
• generate a bag NFT ID, wherein the bag NFT ID is mapped to a public key of the public-private key pair and a random nonce variable.

A method for trustless management of a blockchain asset, comprising:

• receiving, by a server, a request from a user device to transmit the blockchain asset to a recipient address, the request including an identification of a bag non-fungible token (NFT) associated with the blockchain asset;
• validating the request based on receiving a two-factor authentication (2FA) code associated with a TOTP secret;
• receiving, by the server, a wallet signature from a wallet associated with the blockchain asset;
• generating a private key associated with the bag NFT based on a stored key fraction, a wallet address, and the wallet signature;
• deriving a public key associated with the private key and bag NFT;
• generating a message that includes the public key, a nonce variable associated with the bag NFT, and a token ID associated with the bag NFT;
• signing the generated message with the private key;
• and
• invoking a smart contract on a blockchain, wherein invoking causes the smart contract to:
• verify that an invoker owns the bag NFT;
• verify the signed, generated message;
• and
• cause the blockchain to transfer the blockchain asset to the recipient address.