Why Multi-Party Computation is Overengineered for Consumer Wallets

MPC is a solution mismatch for consumer wallets. The primary threat model for most users is key loss, not quantum attacks. MPC's distributed key generation and signing ceremonies are overkill for securing a few thousand dollars, adding UX friction where simplicity is paramount.

Threshold signatures create operational overhead that users cannot manage. Unlike a simple 12-word seed phrase, MPC requires managing signing shares across devices or custodians, introducing new single points of failure like device loss. This complexity mirrors the issues of social recovery wallets without their intuitive design.

The security model is misaligned. MPC protects against a single server compromise, but consumer wallets like MetaMask and Phantom already achieve this by keeping keys client-side. The real vulnerability is user error, which MPC does not solve and often exacerbates with its complex backup procedures.

Evidence: Adoption metrics show the disconnect. Enterprise custody solutions like Fireblocks and Qredo dominate MPC usage, while consumer-facing products struggle. The WalletConnect standard, not MPC, became the universal bridge for dApp interaction because it solved a real user problem with simplicity.

MPC is a sledgehammer for a nut. The primary consumer need is secure key storage, not distributed signing ceremonies. Threshold signatures add latency and coordination complexity for transactions a single EOA already handles perfectly.

The security model is misaligned. MPC protects against a single device compromise, but social recovery wallets like those from Safe (formerly Gnosis Safe) and ERC-4337 smart accounts solve the same problem with simpler, auditable smart contract logic.

Operational overhead is prohibitive. Maintaining a distributed key generation network across user devices creates more points of failure than a well-secured EOA or hardware wallet. The failure of the MPC-based wallet service Torque highlights this infrastructural fragility.

Evidence: The dominant wallet adoption is in simple EOAs (MetaMask) and smart contract accounts (Safe). MPC's market share remains niche, confined to institutional custodians like Fireblocks where its complexity is justified.

MPC is overkill for standard user custody. The primary threat model for most users is key loss, not sophisticated collusion attacks. A simple 2-of-3 Shamir's Secret Sharing scheme, where shards are stored with trusted entities, provides sufficient security without the operational overhead of live MPC nodes.

Sovereignty trumps complexity. Systems like ERC-4337 Account Abstraction enable social recovery and multi-sig logic at the smart contract layer, decentralizing trust to the Ethereum network itself. This is architecturally cleaner than relying on a proprietary network of MPC signers.

The evidence is in adoption. Wallets like Safe (Gnosis Safe) and Argent have secured billions using smart contract accounts, not MPC. Their security is auditable on-chain, unlike the opaque, off-chain computation of most MPC providers.

MPC excels at institutional custody because it separates key shards from transaction logic. This creates an auditable separation of duties between compliance officers and traders, a non-negotiable requirement for funds like Fidelity's or Coinbase's institutional arm.

The overhead is a feature, not a bug. For a consumer, managing shards is overkill. For a bank, the ceremonial complexity of signing provides a legal and procedural audit trail that simple EOAs or smart accounts cannot.

Compare Fireblocks versus MetaMask. Fireblocks' MPC network serves as a regulated settlement layer, integrating travel rule compliance and transaction policy engines directly into the signing flow. This is impossible with a single private key.

Evidence: Fireblocks secures over $4T in assets. Their client list—including BNY Mellon and SVB—validates that for large institutions, regulatory and operational risk dictates architecture, not just cryptographic elegance.