The Correct Way to Manage MPC Wallets: Insights from the Multichain Event

Recently, the Multichain project has encountered a major crisis, with its CEO going missing, leading to inaccessible MPC node servers. This incident has exposed serious issues in the management of MPC Wallet, while also providing us with valuable lessons.

Issues Revealed by Multichain Events

Although Multichain uses MPC technology to manage the treasury, this does not equate to achieving true decentralization. In fact, all node servers operate under the personal cloud service account of the CEO, and this highly centralized management approach is essentially no different from controlling all assets with a single-signature Wallet.

This event highlights three key issues:

1. Lack of transparency makes it difficult to effectively prevent conflicts of interest.
2. Failure to strictly adhere to the principles of decentralized custody has led to excessive concentration of power.
3. Lack of contingency plans for extreme situations

Key to Effectively Utilizing the Characteristics of MPC Technology

In order to fully leverage the advantages of MPC technology, we need to focus on the following aspects:

1. Increase transparency to prevent conflicts of interest

Introduce a third-party MPC service provider with sufficient credibility to replace the self-built MPC service. This can eliminate the "black box" effect and provide necessary information verification for stakeholders.

2. Insist on decentralized custody to eliminate single point risks.

• Use multi-signature schemes, such as 3-3 or t-n threshold signature settings.
• Implement a multi-level private key derivation design for easier hierarchical management.
• Adopts geographically distributed multi-active storage and multi-level backup mechanism

3. Develop a social recovery plan for extreme situations.

Design "SOS mode" and other emergency mechanisms to respond to uncontrollable factors in the physical world. This mechanism can be activated under specific conditions to achieve emergency asset transfer or disposal.

Conclusion

The Multichain incident has sounded the alarm for the entire industry. It reminds us that merely adopting advanced technology is not enough; we also need to achieve true decentralization in management methods and operational strategies. By enhancing transparency, strictly enforcing decentralized custody principles, and formulating comprehensive contingency plans, we can better leverage the advantages of MPC technology to provide users with safer and more reliable asset management services.