"Not your keys, not your crypto."
That's a cliché among crypto circles when it comes to securing digital assets online, but: clichés are clichés because they are true.
And while the aforementioned mantra itself is as true and as accurate as it was in 2015, countless newbies and experienced users alike have constantly lost their seed phrase or private keys – and losing access to their crypto wallets and NFTs or funds stored within them.
It's estimated that billions upon billions of dollars' worth of Bitcoin have been lost and gone forever by people who have forgotten or have mismanaged the private keys to their crypto wallets.
But the thing is, that cliché's due for a long-overdue update.
See, for the longest time, the gold standard for wallet security has been the use of traditional private keys. But as the technology matures, a strictly better solution for digital asset storage has emerged to keep up with the rapidly-evolving industry: Multi-Party Computation (MPC) technology. MPC technology is redefining custody in the crypto context, creating next-generation crypto custody solutions for investors and organizations all sizes.
Institutional-grade firms are already leveraging MPC technology, managing billions of dollars' worth of digital assets using MPC wallet technology. And you know what? It's time for SMEs to take advantage of the increased security that institutions have at their disposal, and for more developers to onboard new crypto users into MPC.
What is MPC and How Does It Work?
Multi-party computation (MPC) is a knowledge area of cryptography that first emerged out of the early 80s, but the changes it makes to how web3 crypto wallets can work are just starting to emerge, offering improved UX, enhanced security, and simpler, more private transactions.
In essence, MPC technology enables two or more parties to simultaneously compute a function output without revealing their inputs, much in the same way a group of individuals can jointly compute their average wages (function output) without revealing their individual salaries that serve as their inputs.
Applied to crypto wallets, MPC enables the creation of a secure private key management system without a single point of failure wherein multiple parties – for instance, a mobile device and a remote server – can jointly perform cryptographic operations like transaction signatures and key generation without revealing the secrets of each party involved in the said transaction.
In multi-party computation, a single private key isn't generated, split, or reconstructed in its operation, making it a strictly better model than traditional single private key models that broader crypto world currently uses.
MPC technology enables retail wallets and institutional-grade custody solutions to design blockchain-based digital asset management systems that remove a singular point of failure: the private key. This offers a more secure and privacy-focused means of self-custody that protects from private key theft and loss of private keys, because 1) there is no single private key to steal, and 2) each party can store their secret inputs that would not breach the entire system's security. MPC wallets are therefore easier to recover, more resistant to key misplacement and phishing attacks, while remaining completely self-custodial and in control of the users.
MPC Wallet-as-a-Service (WaaS)
MPC wallets will eventually become the gold standard of crypto custody, offering the highest degree of security and privacy while remaining flexible and intuitive for retail and institutional clients to use.
But existing market solution are either tailored for institutional level clients, or are lacking in features. That is one of the main reason we decided to build Krayon and offer our own MPC wallet-as-a-service (WaaS) for large and small to medium clients alike.
We enable developers to build dapps incorporating MPC wallet support through a secure, scalable wallet infrastructure by building APIs enabling developers to release MPC crypto wallet products for web and mobile devices, significantly reducing the time-to-market rates of their custodial solutions.
Developers can instantly build on top of the service API to create products that offer substantially enhanced digital asset security while retaining 100% control custody of their private keys and secret inputs without relying on an intermediary to store them.
The Best MPC Wallet Solutions of 2023
Until the advent of mult-party computation wallet solutions, organizations, institutions, and hedge funds have relied on multisig wallet solutions like Gnosis Safe.
Gnosis Safe is an Ethereum-based multisig wallet requiring a minimum number of authorized individuals to approve and sign transactions out of a wallet, enabling corporates and organizations to conduct digital asset transfers and transactions from their funds held in cryptoassets.
At least two approvals are required, for instance, to withdraw funds from a corporate wallet, guaranteeing that no single individual can unilaterally transact using corporate funds.
The trouble with using multisig wallets in 2023 is that they don't support as many blockchain protocols as MPC wallets can, preventing them from actively and safely supporting new chains.
This leads to an inability to adjust to the demands of organizations as they grow, leading to operational inefficiencies. Each protocol requires the wallet provider to give a unique code which can lead to various security incidents that have enabled threat actors to steal millions of dollars worth in crypto assets in poorly-secured multisig wallet implementations.
MPC wallet solutions are among the most widely-used technologies by large institutions to manage digital assets, enabling the secure storing, managing, and transferring digital assets, and retail to small-to-medium sized firms are beginning to leverage them.
Here are some of the leading MPC wallet solutions thus far.
Krayon: Best MPC Wallet For Enterprises, Teams and DAOs
We create MPC-based wallet solutions for small to medium-size enterprises, decentralized autonomous organizations (DAOs), and small investor groups and developer teams.
Our MPC wallet was built to deliver enterprise-grade MPC-enabled crypto custody and user experience, giving teams a full-suite, robust, and secure wallet from whence they can fully store, manage, and transact their crypto assets across many blockchains.
Krayon enables teams a vast spectrum of customization options, such as user roles, access to individual wallets, or custom rules depending on transaction amounts and categories to simplify crypto payments in bulk.
Teams can create as many secure MPC wallets as it needs to manage its entire crypto portfolio with institutional-level security, scalability, and function.
(We'll explain further why Krayon is the best solution for startups, small-to-medium sized enterprises, small teams, and DAOs in the following section.)
Fireblocks: MPC Wallet for Institutions
Fireblocks is an institutional-level digital asset custody solution offering MPC wallet support for blockchain protocols and cryptocurrencies under a single wallet infrastructure used by some of the largest centralized exchanges, TradFi companies, and Fortune 500 companies.
It markets itself as the MPC wallet with the fastest transaction signatures signing even for the most sophisticated and complex applications.
(This robustness is also reflected in their price. Plus, compared to them, we can offer wallet management, transaction reporting, or mass payments. To name a few.)
ZenGo: MPC Wallet for Individual Retail Consumers
ZenGo launched back in 2019 as the first individual consumer-facing MPC wallets. As it was designed for individuals, it's thus far the best option for individual retail customers.
Security-savvy crypto enthusiasts would do well to choose ZenGo, with its availability on iOS and Android paired with its slick UX. ZenGo enables users to trade crypto using the app and serve as a fiat onramp to crypto.
Sepior: Honorable Mention MPC Wallet for Financial Institutions
Sepior, one of the industry leaders in MPC-based private key management and wallet technology, is also an option for corporate firms that wish to harness MPC wallets to manage their crypto portfolios.
They feature institutional-grade MPC wallet technology that centralized exchanges, TradFi companies, and crypto custody firms employ.
Besides the Blockchaindaemon brand's Sepior Advanced MPC wallet, Sepior also features an MPC Wallet-as-a-Service, enabling developers to create a variety of integrations using its SDKs, libraries, and APIs for maximum customization, security, and accessibility options.
4 Reasons Why Krayon MPC Wallet is the Best for Your Business
Krayon has demonstrated its worthiness as the MPC wallet solution of choice for startups, small teams, exchanges, and enterprises, given the variety of its aplications in the field.
Here are four use-cases on why Krayon is the perfect solution for comapnies wishing to securely manage their organization's digital assets using industry-leading cryptographic technology that goes beyond what multisig wallets have to offer.
Use Case 1: Highly-Secure and Scalable Custody for Crypto Startups
Krayon has helped budding crypto startups with shoestring budgets requiring the utmost security – a known weakness for many startups in web3.
A New York-based digital asset management firm employed Krayon Digital's MPC wallet to secure its asset portfolio with various cryptocurrencies without the high costs and several points of failures that hardware wallets and multisig wallets tend to possess.
Krayon Digital's MPC wallet enabled the startup to save money that otherwise would have gone to paying for hardware wallets.
The scalability of its MPC wallet solution was also ideal for the growth trajectory of the startup.
Use Case 2: Secure Fundraising for Tech Startups
Another crypto startup in the process of launching its Initial Coin Offering (ICO) that drew interest from investors from different parts of the world needed a secure MPC-based wallet solution for their token.
Krayon's MPC wallet was a factor in improving investor sentiment and levels of trust in the project, lending it an air of gravitas with Krayon's institutional-grade security and attracting more funding during the ICO.
Use Case 3: Secure Digital Asset Management for Small Trading Desks
A Germany-based trading desk was experiencing issues with scaling its trading operations with its multisig wallets due to the massive growth they experienced over the past year.
Krayon's MPC wallet enabled the company to safely manage their digital assets while enabling them to perform quick and seamless transactions across different blockchains, giving them a clear-cut edge against its competition struggling with the same prevalent problems with conventional smart contract wallets.
Use Case 4: Improved Security for Small to Medium-Sized Crypto Exchanges
Not all centralized crypto exchanges need to pay an arm and a leg for MPC custodial solutions. An Asia-focused medium-sized crypto exchange, for instance, has leveraged Krayon Digital's MPC wallet to store exchange funds in an intuitive, secure, yet easy-to-use MPC solution and support a greater number of cryptocurrencies in the process – without sacrificing transaction speed and efficiency. That has supported the startup's growth and popularity throughout 2023.
The Final Word on Multi-Party Computation (MPC) Wallets
Multi-Party Computation (MPC) technology is fast becoming the new gold standard for securing digital assets from 2023 onwards. The technology is fast becoming the wallet of choice of major financial institutions ranging from BNY Mellon, the largest global custodial bank, and Revolut, one of the largest global neobanks in the world, both of which are adopting MPC technology.
That said, what is the best MPC wallet provider out there? While it depends on your needs - we are confident that Krayon will be able to help companies of all size with the most ambitious goals!
Get in touch with us for a quick chat.