The next generation of crypto wallets with Griffin McShane

fractions and institutional secure key management system developed by mpch labs that provides sovereignty and accessibility to digital assets through multi-party computation today I want to talk about the next generation of crypto wallets specifically in light of recent advancements in the areas of MPC and as you've probably heard a lot about today account abstraction I first came across account abstraction at Devcon uh I believe it was October where there was about two panel discussions one from the ethereum foundation sort of highlighting this new technology despite it being around since double digit eips uh it was you know something that seemed like it was gaining traction I'd ask question uh during the EF panel I said what does this mean for NPC I had just joined an NPC company and they said not sure if would be necessary so it became something I looked into pretty hard I really wanted to get a full with and as I'll explain later it's not a NPC verse account abstraction or smart wallets but a combination of the two sweet yeah so before we start uh we kind of need to know where we are before where we're going uh and sort of where we are or before the other day uh was eos extrinsically owned accounts uh these are the accounts that you'd use for really any wallet uh 12 24 word seed phrase uh that you know you've learned to love or you know stress out about every once in a while uh eoas have been around just about as long as crypto has and uh you know they really embody the idea of sovereignty that came around with crypto as I'm sure is printed on many wallet shirts here at the conference not your keys not your crypto that's really run true on the eoa stage yet despite the evolution of what crypto's become this move towards this new idea calls web 3 that seems to be permeating into smart contracts in ethereum we really haven't seen any advancements in wallets up until recently especially just relying on the same system of seed phrases with web 3 we're not just holding we are using a wallet as an identity we are you know showing off nfts this isn't just a ledger that you're going to put under your mattress to forget about this is your access to a new internet and access that you previously wouldn't have had and it would have been just transactions in holding advancements have also brought around a lot of uh mainstream adoption uh which has been you know bringing new users in who might not necessarily be comfortable with the 12 word seed phrase you're told so often don't write down your password you know keep that safe and secure use a one pass but when it comes to seed phrases it's okay write it five or six times put it somewhere and uh don't forget it or you lose all of your assets uh for someone who's trying to learn Security in a web 2 sense this is really at odds and the security practices of web 3 need to highlight the security practices that we have in the world today and that brings us to MPC MPC is a keyless solution and so is the kind of abstraction sort of changing this way that we have access to wallets uh in short multi-party competition is a method of cryptography that allows multiple parties to draw conclusions combine data without revealing inputs the two main goals of this technology are correctness and privacy correctness is ensuring that the outputs produced by the algorithm are correct and as expected for privacy it's ensuring that secret data of any party is not leaked to any other party and not visible to anybody else and rather than diving deep into MPC in itself I want to highlight sort of advantages that you would have for using an MPC wallet as there are new options of boas I'd like to just sort of highlight and have you find which one's right for you for MBC one of the key points is there's no single point of failure multiple signatures are required to execute a transaction to happen off chain and a second layer of cryptography you also have adjustable signing schemes for institutions in particular proven quorums you can be modified uh organizations can evolve and maintain the same address and change schemes without having any counterparty risk you also have programmable Access Control this allows you to sign essentially an unlimited number of transactions to approvers delegate permissions and use typical security laws that we see in web 2 today such as two-factor Authentication fraud monitoring it also preserves privacy as I stated earlier this is off chain bringing data on chain so the signing of transactions is handled completely off chain ensuring that transactions themselves will remain public but the signing process remains private and then finally NPC's blockchain agnostic the key generation signing relays and all the cryptography happens off chain stepping in I would also like to point out despite working at NPC there are drawbacks for individuals who are considering using this or institutions looking to use this the first is off-chain accountability if you're familiar with Dao's multi-cigs really take the president and each person signing is reflected on them signing on that transaction while privacy is an advantage in this it could also be a double-edged sword uh you don't have this accountability measure of who's signing for transactions how many people are reaching for this quorum compatibility is also an issue if you're currently using a hardware wallet like a ledger that uses a seed phrase there's no real way currently to implement MPC into this technology also accessibility there's a few products right now um that offer it uh and looking to sort of find competitors or find new features uh can be tough as it is a new and evolving technology and then finally availability most NPC products today on the market are focused on institutional investors not as much on retail as it stands today more work would need to be done on MPC for retail to make this available not just in features but in form as well the next one I want to look at is smart accounts these are smart contract based wallets the account abstraction that you've been hearing about throughout the day today and at welcome before recently with the ERC 433 standard uh now account abstraction is happening functionally at the protocol level and again just jumping through briefly as a keyless solution there's no single point of failure you're having to use multiple signatures to execute transactions again like MPC programmable Access Control setting time locks setting policies creating rewards and automations can all be done natively in this smart contract wallet transaction batching uh being able to execute multiple transactions at a time to save on gas and to also make complex transactions off buy and sell orders and any other functions that you're using the wallet for programmable recovery has been getting a ton of Buzz as well it's the idea of being able to recover funds into a smart contract of itself sort of like a dead man switch you could think of it and this sort of idea is that you have a backup key that exists with a couple people and are able to recover funds and then in the opposite of MPC on-chain accountability as with multi-cigs and as stated before this system we're signing and everything happens on chain provides this sort of on-chain accountability and the ability to see how signing is happening and how funds are being distributed on the flip of that uh looking at sort of drawbacks to Smart accounts uh they're blockchain specific currently we have Smart accounts for ethereum they're not going to work for non-evm compatible when you're looking and moving towards a multi-chain sort of world it's difficult to use these Technologies and apply them elsewhere as it's standardized and not brought through higher fees as well are a current issue however they're being solved with l2s cks and other Solutions recovery Logic for example uh while it is programmable it does cost to sign each transaction and make that similarly because it's on chain when you're signing for governance each signature will require gas as well which on ethereum tends to add up then briefly just comparing the three uh taking them through just what I said yeah where does this bring us for the future of wallets how do these keyless systems play in and how do they differ from the world that we have today the fact of the matter is we really have fundamentally changed the way that we've used crypto you know even just a few years at first it was just holding and exchanging on ethereum wallets had to evolve as nfts and new functions came in accessing web 3 connecting with d-apps to me this Art's just the next step creating a change at the private key level to create new opportunities and continue to advance the adoption of web 3 and of ethereum so where are we going there are two points that I look at when I think about what's coming next with wallets it's the idea of having them being differentiated and accessible start for differentiated we need wallets for different users currently everybody is using the same system uh unless you're using custodial Solutions the fact of the matter is many people still use custodial Solutions over wallets because it's easier because you can buy in a binance or a coinbase it will go exactly where you have to go and you could sign in just as you would on any other website however setting up these systems like a kind of abstraction where you can remove that is helpful in a sense if you're an individual whereas an MPC solution may be more useful if you're an institution well programmable recovery on account abstraction and smart accounts is great and requires multiple people to sign looking to have a system of eight people signing off every time you want to do a D5 transaction as a single individual may not be ideal and it's something that you know as we move on we'll continue to see differentiated types of wallets or else you can see different wallets for different applications you could have a wallet that's an eoa wallet that you specifically just hold a ledger isn't going anywhere uh just having that off chain system being able to put it in your bed that's not going away anytime soon if at all smart contract wallets could be more accessible to web 3 and being able to access and show off through social platforms or other systems such as nfts and then finally I have the idea of self-custody plus that wallets aren't just going to be here and have the only value add of self-custody there needs to be something else that differentiates them from others that sort of Plus too many times we see that it takes an incident to happen in crypto where everyone starts moving towards self-custody in the Fallout of FTX uh Ledger assault all-time high sales uh while ledgers have been around forever it was this one instance that made everyone decide now is the time that I need to self-custody and now is the time that I need my own wallet I hope that we can move away from that and see that this is more than just incident specific but moves better towards what crypto and what web3 was founded on and the ideas of self-custody plus removes the idea of oh I need this just to make sure that my assets are safe from these incidents but move towards a way that I could better use and store my assets secondly we look at accessibility and the idea that wallets are going to be moving in the future to be more accessible of access is a really easy start the idea of not having to teach someone how to use a seed phrase not having to go find your seed phrase every time you want to back up a wallet somewhere else making this something that the next billion users can come on and comprehend just as easy as signing in on Google comprehensive designs as well I think the idea of using UI is incredibly important and Powerful making sure that it's one or two clicks getting you where you need to go and not just sitting there waiting for a transaction signing on in your browser signing on in your wallet steps Hinder people from actually performing the functions that they want to perform and having comprehensible designs creating a more streamlined environment for more adoption the idea of Open Source or open availability is something that I also find incredibly important I think we're going to be moving towards uh as with the kind of distraction we recently had the standard published for anyone to build on top of more companies will be moving even in the MPC space to create open source libraries to create standards for these new Securities and these new features and then open availability more broadly seeing companies building not just for one but for many types of users creating and making different options accessible to have people pick what is the right option for them and then finally blockchain agnostic I think that we've seen a move with Phantom wallet and others moving towards offering multiple chains we're going to be seeing that Trend continue on into the future for wallets the idea of web3 is an interconnected internet the concept of having just limited to one system defeats that purpose for Wallace to really be able to be accessible they need to be able to access multiple chains and bring people in to the future of web3 that's all I have guys thank you for coming