Fundamentally, all MPC-based wallets follow the same strategy: reduce the danger of key theft by doing away with the possibility of any single person possessing the entire key. However, there can be notable differences in the MPC protocols and implementation strategies employed by various MPC technology and wallet solution vendors. We can break it down into 3 major categories: Open-Source, Standard, and Advanced
Open-Source
In accordance with the well-liked open-source licensing paradigm, which allows any developer to change and distribute their designs for the public to access and use, open-source MPC wallets are readily available from a variety of sources.
Startups and other early-stage innovators frequently use open-source MPC wallets to learn about and get acquainted with MPC wallets and technology. These wallets, however, are typically not up to the rigorous standards of institutional and custody-grade service providers. Some of the main worries are as follows:
Lack of Accountability: If one of the contributing designers introduces a flaw or vulnerability, who is responsible? Who will support you in handling problems when they arise? Can you trust the wisdom and insight offered through transparent contributions in public forums?
Lack of Third-Party Attestations: Open-source MPC wallets lack official, in-depth third-party assessments and attestations to guarantee that the designs have been thoroughly examined and adhere to security best practices, particularly after any third-party developers have contributed to the open-source code.
Limited Scalability & Performance: Open-source MPC wallet designs are often relatively generic and offer minimal levels of scalability & performance. The absence of performance-enhancing features like pre-processing to increase computing throughput is common of open-source systems. Additionally, open-source wallets frequently have a limit of one wallet per operating instance, which makes it extremely challenging to scale up as your client base and market share increase.
Standard
Companies who view their wallets as an operational convenience but not a key part of their overall service offering are more likely to employ basic or baseline MPC wallets, which are more prevalent. Standard MPC wallets often implement MPC using well-documented methods that allow for the implementation of simple yet secure MPC wallet activities. Baseline wallets are occasionally made available as a subscription under the name "Wallet-as-a-Service" (WaaS), which makes a standard set of functions that are available to users.
Standard MPC For a variety of general, intermediate scale use-cases, wallets are more than enough. However, these wallets fall short of a number of crucial standards for genuine institutional investors and custody-grade digital asset service providers:
Lack of Control: Smaller and mid-tier service providers can launch rapidly thanks to WaaS's convenience, but what happens if the WaaS provider is bought out or goes out of business? What transpires, therefore, if the WaaS provider decides to add features you don't want or remove features you do? Overall, many businesses who see their wallets as more than just a technical convenience find the lack of control and "blackbox" approach that is characteristic with default MPC wallets to be troublesome.
Limited Performance: One of the most frequent issues reported by users of the default MPC wallet is performance. Performance can deteriorate and, in some situations, result in lengthy execution times for a single transaction as a result of a WaaS model that is always growing and changing. After that, think about the dangers of employing a WaaS approach, including Denial of Service assaults. Even for organizations who see wallets as a secondary concern, having systems that are under your control and with sustainable high-performance may be crucial at this early stage of the developing digital asset market.
Limited Scalability: This is another prevalent issue with turn-key, entry-level MPC wallets and WaaS services. While standard MPC wallets frequently accommodate dozens to hundreds of wallets, they frequently lack the scaling capabilities needed for large-scale service providers to support thousands or millions of users.
Advanced
Advanced MPC wallets handle the aforementioned wallet models' limitations in addition to others. designed for major institutional investors, exchanges, custody providers, and mid-sized businesses who see a safe, effective wallet as a vital part of their overall user experience and operations.
Advanced MPC wallets introduce more advanced MPC schemes that have autonomous control, greater performance, exponentially higher degrees of scalability, and more durable and scalable structures. These are some of the qualities and characteristics that make up those differentiators:
Sophisticated MPC Algorithms: While open-source and baseline MPC wallet designs frequently use a more elementary 2-party MPC architecture, sophisticated MPC wallets frequently permit more MPC parties. The capacity to satisfy regional requirements for custody, sub-custody, shared-custody, and non-custody obligations, all supported by core MPC cryptography, increases with the number of MPC parties being increased to three or more. Advanced MPC algorithms become a key differentiator when security is a high concern.
Massively Scalable, Microservices Architecture: Monolithic architecture is commonly used in open-source and base MPC systems. While these more straightforward systems are simpler to construct and can be tweaked for excellent performance at moderate scale, they usually experience significant limits and performance degradation above particular scale levels. The best practices for designing cloud systems are followed by a cloud-native micro-services architecture, which naturally results in orders of magnitudes more scalability while retaining a constant level of performance. Because of this, high-performance advanced MPC wallets may support any scale of users and wallets, from a few thousand to millions.
In addition to introducing more robust system designs, cloud-native micro-services architectures deliver higher-availability services without using the pricey monolithic technique of duplicating hardware.
High-Performance Pre-Processing: As part of its multiparty computational design, some basic and all advanced MPC wallets include pre-processing techniques to varying degrees. This method enables a specified amount of core MPC algorithmic processing to take place before a request for a transaction approval. As a result, the processing lag time between transaction requests and approvals is minimized. While keeping the same level of security, these solutions can offer orders of magnitude performance gains in transaction times.
Pre-processing variations can also get rid of the requirement for simultaneous availability of all parties. In addition to supporting off-line, air-gapped multiparty approvals that enable cold, hot, and hybrid wallet use cases, this can maximize service resilience.
Greater Flexibility: The micro-services architectural feature of enhanced MPC also brings more flexibility in the conception and execution of products and services. For instance, sophisticated MPC can be used when one or more MPC participants are mobile devices, or even IoT devices with very limited processing and memory capabilities. MPC nodes, on the other hand, can be hosted on a variety of containers operating on various clouds, or any combination in between.
Complete Control: Advanced MPC wallets provide service providers and wallet developers total autonomy over their products. Service providers are free to use any model they like to host their own wallet products with their own provider-managed and -controlled software. Along every step of your product's evolution journey, third-party reviews and attestations are available, along with ongoing roadmap enhancements that are pre-approved before being incorporated into your code.