MPC: The Future of Institutional Custody
Multi-Party Computation (MPC) is a subfield of cryptography that allows multiple parties to compute a function over their inputs while keeping those inputs private.
Threshold Signature Schemes (TSS)
TSS is a specific application of MPC for creating digital signatures.
- Distributed Key Generation (DKG): Parties collectively generate a public key. The corresponding private key never exists in its entirety in any single location. Instead, each party holds a "Secret Share."
- Interactive Signing: To sign a transaction, a threshold of parties (
t-of-n) must perform a multi-round communication protocol.
MPC vs. Multi-Sig
- Multi-Sig: On-chain, multiple signatures. High gas, visible signers, chain-specific.
- MPC: Off-chain, single signature. Low gas, private signers, chain-agnostic (works on Bitcoin, Ethereum, Solana).
🛠 Tactical Activity: Designing a 3-Tier MPC Policy
Objective: Balance speed and security for a corporate treasury.
- Tier 1 (Hot): $0 - $10k. 2-of-3 MPC shards (2 automated, 1 human).
- Tier 2 (Warm): $10k - $1M. 3-of-5 MPC shards (3 humans in different regions).
- Tier 3 (Cold): > $1M. 5-of-9 MPC shards + On-chain Multi-Sig wrap.
- Task: Map out the "Approval Roles" for each tier (Finance, Legal, Ops).