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What is MPC?

Multi-Party Computation (MPC) is a cryptographic technique that allows multiple parties to jointly compute a function while keeping their individual inputs private. In blockchain wallets, MPC enables secure, distributed key management where no single party ever has access to the complete private key.

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Core Concepts

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Parties and Ceremonies

Party - An entity participating in an MPC operation (e.g., user device, Dynamic’s server, enterprise server) Ceremony - A coordinated event where parties come together to perform MPC operations like key generation, signing, or resharing Room - A unique communication channel on the MPC relay that allows all parties to securely communicate during ceremonies Quorum - The minimum number of parties required to complete an MPC operation (e.g., 2 out of 3 parties)

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Digital Signatures and TSS

Digital Signature Scheme - A set of cryptographic algorithms (key generation, signing, verification) that ensure authenticity and integrity. Examples include:
  • ECDSA - Elliptic Curve Digital Signature Algorithm
  • EdDSA - Edwards-curve Digital Signature Algorithm
  • Schnorr - Schnorr Digital Signature Algorithm (BIP-340)
Threshold Signature Scheme (TSS) - An MPC implementation of a digital signature scheme that distributes signing authority across multiple parties. Only when the threshold is reached can operations be performed.

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Key Management Operations

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Key Generation

Key Generation Initialization - A preliminary process that creates encryption keys for secure communication between parties and assigns unique identifiers to each participant. Distributed Key Generation (DKG) - The core process where parties collaboratively generate key shares without any party seeing the complete private key. Key/Keyring - The complete set of all key shares that collectively represent the wallet’s signing capability. Key Share - An individual party’s portion of the distributed key, containing a public key and secret share. Secret Share - The private component of a key share that must be kept secure.

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Key Maintenance

Resharing - The process of modifying the MPC configuration (e.g., changing from 2-of-2 to 2-of-3, adding new parties, or removing existing ones). Refreshing - Replacing existing key shares with new cryptographically equivalent ones without changing the wallet address, improving long-term security. Export - Creating a portable backup of a key share for recovery or migration purposes. Offline Export - Generating a backup share that can be stored independently of the online system.

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Share Types

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User Shares

Local Share - Stored directly on the user’s device (browser localStorage, mobile device storage). Device Share - A local share stored in the device’s secure enclave (e.g., iOS Secure Enclave, Android Keystore). Cloud Share - Stored in cloud storage services like Google Drive, iCloud, or OneDrive. Can be managed programmatically using the useWalletBackup hook. Export Share - A file-based backup stored locally on the user’s device (base64 encoded). Backup Share/Cold Share - Any user share stored in a durable, server-side location for recovery purposes.

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Server Shares

Dynamic Share - Generated and encrypted within Dynamic’s Trusted Execution Environment (TEE), stored in Dynamic’s database. Customer Share - Enterprise-controlled shares stored on customer infrastructure using the Node SDK.

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Security Architecture

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Trusted Execution Environment (TEE)

Dynamic uses AWS Nitro Enclaves to provide isolated, attested execution environments where sensitive operations like key decryption and signing occur.

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MPC Relay

A secure communication infrastructure that manages party coordination, encrypted data transmission, fault tolerance, and rate limiting.

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Encryption and Storage

Server Share Encryption - Generated in Evervault enclaves, encrypted by the enclave, and stored outside the vault in Dynamic’s database. User Share Encryption - Can be encrypted with user-provided passcodes, device-based authentication (passkeys), or cloud storage encryption keys. Dynamic Client Key Share Service - When backed up with Dynamic using our client key share service, user shares are encrypted through Evervault’s encryption proxy for enhanced security.

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Why MPC Matters

For a comprehensive overview of the benefits and advantages of MPC, including security benefits, user experience improvements, and developer advantages, see our dedicated Why MPC Matters page.