Wallet Management

Selecting the right wallet for digital asset management is critical for ensuring a balance between security, control, and convenience. Custodial and non-custodial wallets have long been the standard options, each offering distinct benefits. However, Multi-Party Computation (MPC) technology offers a new level of protection and flexibility, setting it apart from traditional solutions. By splitting private keys across multiple devices or locations, MPC-based wallets eliminate single points of failure, significantly enhancing security and reducing the risk of unauthorized access.

In addition to enhanced security, MPC wallets improve transaction speed and performance, enabling quicker transaction signing and seamless integration with various blockchain networks. With built-in support for regulatory compliance, including detailed transaction policies and audit trails, MPC-based wallets are particularly well-suited for institutional users.

The comparison table below details the key differences between custodial, non-custodial, and MPC-based wallets, illustrating why MPC offers the most advanced and secure solution for digital asset management.

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Comparison Table

Feature	Custody Wallets	Non-Custodial Wallets (NCW)	Stobox 4 MPC Wallets
Key Ownership	Service Provider	User	Distributed among multiple parties
Control Over Funds	Limited, managed by third party	Full control by user	Collaborative control required
Security Model	Depends on the custodian's security	User responsible for security	Enhanced security through key distribution
Privacy	Less private, data with custodian	More private, user holds keys	Private, keys are split and only reconstructed if exported from Stobox 4
Recovery	Custodian can assist in recovery	User-managed recovery (e.g., seed phrase)	Can involve multiple parties for recovery
Transaction Signing	Done by the custodian	User signs transactions	Requires agreement from a threshold of key share holders
Scalability	High, managed by service provider	Varies, depends on user setup	High, designed for enterprise-level scalability
Regulatory Compliance	Often compliant, managed by entity	User responsibility	Can be tailored for compliance, done in Stobox 4
Complexity	Low for user, high for provider	Moderate, user must understand wallet management	High, due to distributed key management
Use Case	For users preferring convenience over control	For users wanting full control over their assets	For institutions and collaborative environments
Examples	Exchanges' built-in wallets	Hardware Wallets, MetaMask	Fireblocks, Stobox 4
Setup and Use	Easy setup, often through an account creation	Requires wallet creation and key management	More complex setup due to multi-party involvement
Counterparty Risk	High, depends on custodian's stability	Low, no reliance on third parties	Reduced, but depends on the implementation and parties involved
Innovation in Custody	Traditional model	Often linked with DeFi applications	Allows for novel custody solutions and smart contract interactions

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