Multisig NFT Wallets
If you're looking for a way to safely custody your NFTs then there are really only two options:
- Use a Multisig; or
- Use an MPC Wallet.
Multisig is probably the best known option but that doesn't make it the right one. And MPC has been gaining a lot more popularity in the crypto space of late. In fact, MPC has quickly become the default custody solution for many institutions.
But what's the difference between the two?
MPC and multisig both require multiple trusted third parties to approve a transaction before it can be executed. So with both solutions you're removing the single point of failure.
However, the critical difference is how they each do this.
With a multisig you're requiring two or more private keys to sign a transaction independently. Whereas with an MPC wallet you're only using a single private key.
That private key is split into separate pieces (or shards). And its this sharding process which offers MPC wallets some critical advantages over multisignature wallets. I've already gone into explicit detail on this in a previous post (MPC vs. Multisig) so I won't bore you here.
But I will highlight a few of the obvious advantages.
Why Use MPC Instead Of Multisig For NFTs
NFTs, or ERC-721 crypto collectibles, can technically be stored in a Gnosis Safe. But if you've used a Gnosis Safe you know there are some major limitations.
Let's face it, the experience is pretty sucky... But, it gets worse:
Multisig wallets aren't blockchain agnostic
Multisigs need to be compatible with the blockchain because each signature is done on chain.
Multisig wallets aren't private
Another drawback with multisig wallets is that all signatures are on chain. This means each trusted party can be tracked and traced if they're using an existing wallet to sign transactions as part of the multisig.
If we compare this to MPC wallets on the other hand, you'll quickly see why multisig is becoming redundant.
Multisig wallets are more expensive
Multisig wallets like Gnosis Safe are smart contract wallets. This increases the complexity of signing a transaction and therefore the gas cost. Transactions can cost as much as 300% to 400% more when using a multisig like Gnosis Safe, as opposed to using an MPC-based wallet.
MPC wallets are protocol agnostic
Because they're using a single private key and the process involves one signature to authenticate transactions, MPC wallets can work on any blockchain.
MPC wallets are private
The quorum of trusted parties in an MPC solution is completely private because their signature shares always remain off chain. This makes it impossible for outsiders to know who's responsible for signing transactions on an MPC wallet and how many are needed to meet the threshold.
And it gets better:
MPC wallets are operationally flexible
This means you can add or remove users from a wallet without changing the wallet address. Compare this to a multisig where you'll have to transfer your NFTs out of the multisig to a new address any time you want to make changes to your policy configuration.
These are just a few of the reasons MPC wallets make the best alternative to Gnosis Safe or any other multisig wallet.
MPC NFT Wallet
If you came here looking for a multisig nft wallet, I hope this short post has convinced you to at the very least look more into MPC. MPC wallets offer you a way better solution when it comes to NFT custody.
And if you are convinced, then make sure to sign up to our private beta and check out our NFT wallet.