In recent years, there has been renewed interest in MPC as a way of facilitating the storage of secret crypto information. In this article we will explain all the complex terms in detail, and review the landscape of current (and evolving) solutions
What is MPC?
Multi-Party Computation (MPC) is a cryptographic technique that allows multiple parties to jointly compute a function over their inputs while keeping those inputs private. It has various use cases in different industries:
- Healthcare: Securely gathering and analyzing patient data from a large pool of users while maintaining privacy and data integrity.
- Finance: Protecting sensitive financial information, such as in digital auctions or managing wallets of digital assets.
- Government and Public Policy: Conducting studies, such as analyzing the gender wage gap, by privately collecting and processing sensitive data.
- Business: Enabling secure collaboration on large datasets, such as determining the average of salaries without revealing individual salary information.
- Education: Supporting applications that require jointly computing functions over private inputs, such as in academic research or data analysis.
MPC is also being used in emerging technologies like autonomous vehicles for real-time collaboration and anonymous communication, further demonstrating its versatility and potential impact across industries.
What is a Web3 Wallet?
A Web3 wallet is a digital wallet designed for interacting with Web3 applications, which are decentralized applications built on blockchain technology. It allows users to store and manage their digital assets, such as cryptocurrencies, NFTs, and other digital tokens. There are three main types of Web3 wallets: non-custodial, custodial, and smart contract wallets. Non-custodial wallets, also known as self-custody wallets, provide users with full control over their assets using a public and private key pair. Web3 wallets are essential for anyone dealing with cryptocurrencies or blockchain-based applications, as they provide a secure way to store, manage, and transfer digital assets while giving users control over their private keys.
What is an MPC Wallet?
An MPC wallet, or Multi-Party Computation wallet, is a type of digital asset wallet that uses Multi-Party Computation technology to split and distribute the private key among multiple parties. This technology enhances security by ensuring that the private key is never complete or exposed in its entirety, making it more resistant to compromise. MPC wallets are designed to provide improved security, flexibility, and control over digital assets, making them suitable for institutional custodians, investors, and traders. By leveraging MPC technology, these wallets enable secure collaboration and decision-making across various use cases, and they offer benefits such as enhanced data privacy, increased accuracy, and the removal of single points of failure.
Common Use Cases for a Web3 Wallet
Common use cases of an MPC (Multi-Party Computation) web3 wallet include:
- Secure Key Management for Exchanges and Custodial Services: Exchanges and custodial services can use MPC wallets to enhance their security, ensuring that the private keys for user assets are distributed and not susceptible to single points of failure.
- Securing Digital Assets in Corporate Storage and DAO Services: The nature of MPC wallets with secure collaboration makes them suitable for securing digital assets in corporate storage and decentralized autonomous organization (DAO) services.
- Enhanced Security and Privacy for Individual Users: MPC wallets offer increased security, enhanced data privacy, and the elimination of single points of failure, making them a popular choice for individual users looking to secure their digital assets.
- Convenience and Anonymity: MPC wallets provide users with the convenience of holding their assets online without the need for cold storage, as well as the ability to execute transactions anonymously, addressing privacy concerns in the crypto ecosystem.
MPC wallets are expected to play a pivotal role in securing assets and information in the digital asset landscape as they offer a balance between security, convenience, and privacy.
What is a Programmable Web3 Wallet?
Programmable wallets are for developers. Instead of having to install the wallet as a Chrome Extension or standalone app, programmable wallets serve as a remote abstraction of a wallet, where the developer can control the wallet through an API. This is a type of Web3 wallet, and offers features such as user-controlled wallets, gas abstraction, and support for external smart contract accounts. They are designed to bridge the gap between the traditional internet and blockchain networks, allowing developers to rapidly build, deploy, and scale blockchain-powered apps for various use cases.
What is a Programmable MPC Web3 Wallet?
Finally, we’ve reached the goal of this article. Programmable MPC wallets are a new kind of specie in the game, serving as an enabler to new web3 technologies and products.
A programmable MPC wallet communicates with the various blockchain networks in the usual way, by connecting to the entry point into the blockchain network – through the RPC nodes.
The differences are as follows:
- The MPC network of the wallet vendor (see vendors below) is the actual custodian of crypto credentials. Which means, the MPC networks holds the private key for each of the wallets it controls in various blockchain networks. This comes with its advantages as well as disadvantages, as will be explained below.
- Sometimes, the user logging into other crypto chains holds a part of the private key, thus making him a part of the transaction by providing this missing information. Sometimes, all of the private key is held within the MPC network.
- Security: The MPC network serves as a proxy to the various blockchains, and through programmable rules is able to allow/disallow certain actions to be executed on each available blockchain.
Advantages of using a Programmable MPC Wallet
There are many reasons and possible applications for using a programmable MPC wallet, some of them not yet known or thought about. We will list the general advantages of using such a service:
- Liability and responsibility – because the custodian MPC wallet holds the credentials for the various blockchains, we can argue that the responsibility for holding these credentials does not lie upon us, the developers of a web3 service that uses this MPC wallet.
- Security: the MPC wallet may allow filtering requests for different blockchains, allowing only specific actions (e.g. don’t steal coins)
- Less regulation: because the MPC wallet holds the login credentials to the blockchains, we may argue that it is the financial service providing the access, thus in some countries less regulation may be required.
- Faster time-to-value: because we use an MPC wallet, it may helps us to develop our web3 app faster.
- Account transferability: because we don’t hold the credentials to a certain blockchain, an account transfer may be possible through the MPC wallet to a different person. This is impossible if we’re holding the private key to the target blockchain in our computer. (As we cannot prove that we destroyed it).
- Account sharing and unsharing: it is possible to share an account with another person (e.g. a bitcoin wallet), and unshare it later if needed.
The Challenge in Maintaining a Separate Web3 Entity
The MPC Wallet service may be further defined as a DAO, an external entity not held by anyone. This improves the regulatory situation for startups using this DAO, as the DAO can be considered to be the financial service facilitating money transfer on the crypto chains.
Regulation of a Separate Web3 Custodian Entity
As said, having the MPC wallet as a DAO may help in regulating our web3 app in some countries.
Comparison of Web3 MPC Wallets
| Company | Smart Contract Language | Description | Website Link(s) |
| Lit Protocol | Javascript | Main goal is authentication through the MPC, through programmable javascript logic. | https://www.litprotocol.com/ |
| Partisia Blockchain | Rust | Main goal is to save secret data on the blockchain, can be programmed to do other things but we need to write it on the blockchain. | https://partisiablockchain.com/ |
| Qredo | Any (so they say) but only on the EVM (Ethereum Virtual Machine) | Main goal is institutional workflows for conserving and protecting access to web3 wallets. | https://www.qredo.com/ |
| Odsy | Rust | Main use is authentication through the MPC, programmable auth login in Rust. More secure than some others as part of the private key is held by the user. Programmable logic is also useful for security purposes: you don’t have to allow all actions on the blockchain after you sign in. Read the message signature and filter programmatically. | https://odsy.xyz/ |
| Entropy | Unspecified | Main goal is auth through the Entropy MPC, for trustless key sharing (account transfer, sharing, etc.) | https://entropy.xyz/ |
| Capsule | No smart contracts | Main goal is to serve as a simple API for accessing blockchains and preserving the secret data on the network, through MPC. | https://usecapsule.com/ |
| Ruby Protocol | No smart contracts (can be combined with other smart contract blockchains) | Access control layer for web3. | https://ruby.xyz/ |
| Layer Zero Network | “omnichain contract standards like OApp, OFT, and ONFT” | Create applications spanning multiple chains, protocols, tokens | https://layerzero.network/ |
| Nillion | No smart contracts | Allow data processing workflows such as machine learning and more on secret datasets, stored on the blockchain. | https://www.nillion.com/ |
| Aztec Network | Noir – a Rust-based language | Allow privacy features on the Ethereum network. It is a layer-2 on Ethereum. | https://aztec.network/ |
| Zetachain | Solidity | ZetaChain is a layer 1 blockchain and developer platform that connects any L1 and L2, from Ethereum to Bitcoin and beyond. Access all of crypto in one place. | https://www.zetachain.com/ |
| Fireblocks | No smart contracts | Institutional solution for web3 asset control, security, tracking, reporting and more. | https://www.fireblocks.com/ |
Conclusions
The landscape of MPC programmable wallets is ever-expanding, with new use cases discovered regularly.
We are sure to hear about all the new technology these wallets enable in the near future.
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