docs: add initial account recovery docs
+# Account Recovery
+
+In this section, we'll cover the possible ways of recovering the funds within a
+Pool account upon data corruption/loss. Account funds are locked to a 2-of-2
+multi-sig output of the account owner and the Pool auctioneer until the
+account's expiration has been met, giving the account owner full control of the
+funds. This expiration is included in the account output script, so it must be
+known in order to spend the account funds. There are two possible ways to
+recover an account's funds after data corruption/loss: one that requires the
+Pool auctioneer's cooperation, which is the only method currently supported,
+and one without, which will require storage of an additional data blob similar
+to the Static Channel Backups present within `lnd`. An auctioneer-assisted
+account recovery intent can be issued through the `pool accounts recover`
+command or the `RecoverAccounts` RPC.
+
+```text
+$ pool accounts recover -h
+NAME:
+ pool accounts recover - recover accounts after data loss with the help of the auctioneer
+
+USAGE:
+ pool accounts recover [arguments...]
+
+DESCRIPTION:
+
+ In case the data directory of the trader was corrupted or lost, this
+ command can be used to ask the auction server to send back its view of
+ the trader's accounts. This is possible as long as the connected lnd
+ node is running with the same seed as when the accounts to recover were
+ first created.
+
+ NOTE: This command should only be used after data loss as it will fail
+ if there already are open accounts in the trader's database.
+ All open or pending orders of any recovered account will be canceled on
+ the auctioneer's side and won't be restored in the trader's database.
+```
+
+## Auctioneer-Assisted Account Recovery
+
+As part of the initial Lightning Pool launch, an account recovery method has
+been added that requires the cooperation of the auctioneer. This method is
+based on the account owner sending a recovery intent to the auctioneer, along
+with a challenge response to prove ownership. The recovery intent includes a
+set of keys derived by the same account BIP-0043 derivation path
+`m/1017'/coin_type'/220'/0/index`, so the same `lnd` seed that was to used to
+initially create the accounts must be used.
+
+Upon the auctioneer receiving the intent, it will verify the challenge
+response, determine the validity of account key to recovery, and provide the
+account owner the latest details of the account known to the auctioneer. This
+allows the account owner to continue using their account within the auction
+without having to perform any on-chain transactions. As usual, the account
+owner can decide to close the account and withdraw their funds to their desired
+outputs if they no longer wish to participate in the auction.
+
+Note that as a part of this process, all orders belonging to an account being
+recovered are canceled within the auction and are not restored to the account
+owner.
