Transparency Multi-Sig: Multi-Sig wallets are inherently transparent because the signing process occurs on-chain. Every transaction requiring multiple signatures is visible on the blockchain, allowing all parties and third-party observers to verify the number of signatures and the addresses of signers. This transparency is beneficial for auditing and compliance purposes, but it also means that the identities and number of signers are exposed on the blockchain, which could be a privacy concern.

MPC: In contrast, MPC wallets operate off-chain, using cryptographic techniques to distribute the signing process across multiple parties without exposing their identities or the number of participants on-chain. The transaction appears on the blockchain as a standard single-signature transaction, providing greater privacy. However, this lack of transparency can make it more challenging to audit and verify the signing process without trusting the underlying cryptographic implementation.

Cost of Setup Multi-Sig: The cost of setting up a Multi-Sig wallet is generally low, especially on blockchains that natively support Multi-Sig (like Bitcoin and Ethereum). Users can set up Multi-Sig wallets using existing infrastructure and tools provided by wallet providers. The primary costs involve the fees associated with on-chain transactions and potentially higher gas fees due to the increased complexity of Multi-Sig transactions.

MPC: Setting up an MPC wallet is more complex and typically requires specialized software or services, which can increase the initial setup costs. The cryptographic operations involved in MPC are computationally intensive, and while these operations occur off-chain, the need for robust and secure infrastructure can add to the overall cost.

Cost in Fees On-Chain Multi-Sig: On-chain fees for Multi-Sig wallets can be higher due to the increased complexity of transactions. Since each transaction requires multiple signatures, the data size of the transaction is larger, leading to higher transaction fees. Additionally, some blockchains impose additional costs for Multi-Sig operations, further increasing the on-chain fees.

MPC: MPC wallets, on the other hand, can offer lower on-chain fees because the MPC process happens off-chain, and the final transaction appears on-chain as a simple single-signature transaction. This reduction in complexity can result in lower transaction fees compared to Multi-Sig transactions, making MPC wallets potentially more cost-effective in terms of on-chain fees.

Multi-Blockchain Support Multi-Sig: Multi-Sig support is blockchain-dependent. While blockchains like Bitcoin and Ethereum have native support for Multi-Sig, others may not, or the implementation may be cumbersome and expensive. As a result, Multi-Sig wallets are often limited in their multi-blockchain support, requiring different configurations or even separate wallets for different blockchains.

MPC: MPC wallets offer greater flexibility in multi-blockchain support because the cryptographic operations are independent of the underlying blockchain. As long as the blockchain supports standard signature verification, an MPC wallet can operate across multiple blockchains without requiring significant modifications. This makes MPC wallets more versatile for users managing assets across different blockchain ecosystems.

Asynchronous vs. Synchronous Transactions Multi-Sig: Multi-Sig wallets are asynchronous in nature. Each signer can submit their signature independently at any time, and each confirmation is processed as a separate transaction. The final transaction is only executed once the required number of signatures is gathered. This flexibility allows signers to operate without needing to be online simultaneously, making Multi-Sig a practical solution for distributed teams or signers in different time zones.

MPC: MPC wallets, in contrast, are synchronous in practice. Each signer’s partial signature relies on the signatures of the other signers, meaning that they often need to collaborate in real-time or sequentially within a relatively short window. If some signers are offline and more than the required threshold is not met, the remaining signers cannot proceed with the transaction. This requirement can be a limitation in scenarios where synchronous coordination is challenging.

Recovery Process Multi-Sig: The recovery process for Multi-Sig wallets is relatively straightforward. If a signer loses their private key, the other signers can simply replace that signer by performing an on-chain transaction to update the signers list. The affected signer can generate a new key pair and provide the new address, which can then be added to the Multi-Sig wallet. This process ensures that the wallet remains functional even if one signer loses their key, providing a robust and flexible recovery mechanism.

MPC: MPC wallets often have more sophisticated recovery mechanisms because the key shares are distributed among multiple parties. If one party loses their share, the other parties can still reconstruct the signing key, depending on the implementation. However, this process is contingent on the MPC protocol used and the setup of the key-sharing scheme. Additionally, key rotation in MPC typically involves changing or refreshing the key shares of all signers rather than just the share of the signer who lost their key. This is necessary to maintain the cryptographic integrity of the MPC setup. While this ensures the security of the wallet, it can add complexity to the recovery process compared to the more straightforward approach in Multi-Sig wallets.

Ability to Add and Remove Signers Multi-Sig: Multi-Sig wallets can be designed to allow adding or removing signers without changing the original address. This flexibility is achieved by programming these capabilities directly into the smart contract. As a result, the Multi-Sig address remains the same, even as signers are added or removed, minimizing disruption and avoiding the need to transfer assets to a new address.

MPC: In MPC wallets, adding or removing signers generally involves reconfiguring the entire MPC setup, which might change the structure of the key shares. Additionally, when signers are added or removed in an MPC setup, it typically requires rotating or changing the key shares of all signers to maintain cryptographic integrity. While this process might not necessarily require a change in the on-chain address, it often involves complex operations that could temporarily disrupt the wallet’s functionality. The flexibility of adding or removing signers without altering the on-chain address can be more limited compared to Multi-Sig.

Ability to Change the Signing Threshold Multi-Sig: Similar to adding or removing signers, changing the signing threshold in a Multi-Sig wallet can be achieved without altering the original contract address. The smart contract can be programmed to allow dynamic adjustments to the signing threshold, offering flexibility without the need for extensive modifications or new wallet setups.

MPC: In MPC wallets, changing the signing threshold can be more complex. The threshold is often tightly integrated into the cryptographic setup, and adjusting it may require a significant reconfiguration of the MPC protocol. Depending on the implementation, this process might necessitate creating a new set of key shares, which could potentially impact the on-chain address. Therefore, while MPC wallets offer many advantages, they may lack the flexibility of Multi-Sig wallets when it comes to dynamically changing signing thresholds.