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In order to decrypt the DM, the client must have control of the private key. But yes, they don’t have to sign anything—just prove that they have the private key to decrypt the DM.
I guess the question is whether your service wants to run its own relay. If you’re running your own relay, the client *should* automatically respond to a NIP42 auth request transparently without the user having to do anything.
If you’re not running your own relay, then NIP42 connection-level auth won’t help you.
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This is not the point. Adding OTP enables apps that do not have access to your private key to still implement npub.cash's API.
Imagine you want to use cashu.me with npub.cash, but you don't have a signing extension. Instead of pasting your private key in there you could simply:
1. Add you public key to cashu.me
2. Go to your daily driver nostr app
3. Retrieve the OTP and paste it into cashu.me
4. Cashu.me is now authenticated with npub.cash without ever signing anything, nor accessing the keys
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