The Cost of Sovereignty: Who Controls the Agent's Keys?

Multi-Party Computation (MPC) is the current standard for institutional key management, but it introduces critical latency and complexity for on-chain agents. Every transaction requires a fresh, multi-step signature ceremony.

• Latency Penalty: Adds ~2-5 seconds of overhead per on-chain action, crippling high-frequency strategies.
• Operational Fragility: Relies on a quorum of live, coordinated nodes, creating a single point of failure for autonomous systems.
• Cost: Managed MPC services charge ~$0.50-$5 per signature, scaling prohibitively for micro-transactions.

Delegated signing authority via smart contract wallets (e.g., Safe{Wallet}, Biconomy) allows agents to operate with pre-approved, limited powers. This shifts trust from key management to smart contract logic.

• Gasless UX: Sponsors can pay gas, enabling seamless agent onboarding and interaction.
• Granular Permissions: Keys can be scoped to specific functions, amounts, and time windows, minimizing blast radius.
• Native Composability: Agents become on-chain entities that can hold assets, interact with DeFi protocols like Aave and Uniswap, and be governed by DAOs.

Emerging primitives like ERC-4337 Account Abstraction and specialized agent SDKs (e.g., Airstack, Bundler) enable wallets owned and operated solely by code. The private key is generated and secured within a Trusted Execution Environment (TEE) or secure enclave.

• True Autonomy: No human-in-the-loop for routine operations, enabling 24/7 execution.
• Enhanced Security: Keys are never exposed to the network or a multi-party committee.
• Integration Layer: These wallets become the base layer for intent-centric architectures, plugging into systems like UniswapX and CowSwap.

This is the core trilemma. MPC offers verifiable, auditable signatures but sacrifices liveness. Programmable keys maximize liveness but introduce smart contract risk. Autonomous wallets in TEEs are a black box, trading verifiability for performance and sovereignty.

• MPC: Verifiable, but not live.
• Smart Accounts: Live and composable, but attack surface in Solidity.
• TEE Wallets: Live and performant, but trusted hardware assumptions.
• The winner will likely be a hybrid, context-specific model.

The Problem: Users demand simple, powerful AI but have zero ownership. The Solution: The provider holds all keys, offering a seamless, high-performance service at the cost of user sovereignty.

• Key Benefit: Zero user overhead, instant global scale.
• Key Benefit: Centralized security audits and threat response.
• Key Risk: Single point of failure; provider can censor, modify, or sunset the agent.

The Problem: EOAs are insecure and rigid. The Solution: Agent keys are managed by a smart contract wallet, enabling social recovery and programmable security policies.

• Key Benefit: User sovereignty with mitigations; lose a key, recover via guardians.
• Key Benefit: Sponsored transactions and batched operations reduce UX friction.
• Key Risk: Relies on the security of the underlying Ethereum L1/L2 and the social recovery module.

The Problem: Centralized orchestration limits composability and creates rent-seeking. The Solution: Agent logic and keys are deployed on-chain, with execution verified by a decentralized network.

• Key Benefit: Censorship-resistant operation; agent runs as long as the chain exists.
• Key Benefit: Native composability with DeFi protocols like Uniswap and Aave.
• Key Risk: High on-chain execution costs, slower inference, and complex key management for autonomous actions.

Requiring users to manage keys for every agent creates unacceptable friction and risk. This model fails for non-custodial, high-frequency agents.

• Key loss means permanent agent death and asset loss.
• Gas sponsorship for on-chain actions is impossible without a funded wallet.
• Recovery mechanisms (e.g., social, MPC) add complexity users won't tolerate.

Agents operate under limited, time-bound authority delegated from the user's master key, inspired by ERC-4337 session keys and Cosmos authz modules.

• Scoped Permissions: Agent can only interact with pre-approved contracts (e.g., Uniswap, Aave) up to a set limit.
• Temporal Validity: Keys expire after a session, minimizing blast radius.
• Automated Revocation: User can instantly invalidate all agent sessions from a single interface.

Delegate control to a dedicated agent wallet secured by Multi-Party Computation (MPC) or a Safe{Wallet}, separating agent operational funds from user treasury.

• Non-Custodial Core: User retains ultimate ownership via threshold signatures.
• Operational Isolation: Agent compromise drains only its operational wallet, not the user's main assets.
• Institutional Grade: Aligns with Fireblocks and Coinbase MPC infrastructure, enabling enterprise adoption.

Treat the agent itself as an NFT (ERC-6551) or a CosmWasm contract that owns its own wallet, making keys an implementation detail.

• Portable Identity: Agent state and assets are bound to the NFT, transferable between key managers.
• Upgradable Security: Key management logic (MPC, social recovery) can be upgraded without migrating the agent.
• Composable Ownership: Enables novel models like DAO-owned agent fleets or fractionalized agent ownership.

Projects like Across and UniswapX use centralized sequencers to fulfill intents, effectively holding temporary custody. This is a pragmatic, high-liquidity trap.

• Vendor Lock-in: You're trusting the sequencer's security and liveness.
• Regulatory Target: Centralized entity becomes a clear point of enforcement.
• Contradicts Sovereignty: Re-creates the custodial risk the agent aims to escape, despite LayerZero's decentralized verification.

Absolute key control is impractical. The winning architecture will maximize user sovereignty within practical constraints, using a stack of delegation, MPC, and agent-native accounts.

• User Experience dictates the acceptable sovereignty floor.
• Economic Security must be proportional to the agent's treasury.
• The Stack will be modular, letting users choose their own risk profile, similar to EigenLayer restaking.