Glossary — Security & Compliance
What is an MPC Wallet?
An MPC (Multi-Party Computation) wallet distributes private key material across multiple parties or devices, requiring a threshold of them to collaboratively sign transactions without ever reconstructing the full key in one place.
WHY IT MATTERS
MPC solves a core challenge: how do you use a private key without any single entity seeing the full key? The key is split into shares distributed across multiple parties. To sign, a threshold of parties perform a cryptographic protocol together — producing a valid signature without any party learning the others' shares.
Unlike multisig (which is visible on-chain as a smart contract), MPC produces a standard cryptographic signature. On-chain, an MPC transaction looks identical to a regular EOA transaction. This has advantages for privacy and gas efficiency.
For agent wallets, MPC adds security without smart contract complexity. Services like Fireblocks, Turnkey, and Coinbase CDP use MPC to manage agent keys — the agent runtime holds one key share, the service holds another. Neither can sign alone, and the full key never exists in one place.
HOW POLICYLAYER USES THIS
PolicyLayer adds spending policies on top of MPC-managed wallets. While MPC secures the signing process, PolicyLayer validates what gets signed — ensuring transactions comply with spending limits and rules before the MPC signing ceremony begins.