MPC Digital Asset Custodian with On-Chain Identity Authentication
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Solution Overview
Problem
Distributed computer systems face challenges in securing information, managing private keys, and signing transactions for decentralized exchange platforms, particularly due to the risk of losing private keys or experiencing data breaches, which can lead to irreversible transactions and potential theft or loss of funds.
Innovation Solution
A computer system integrating off-chain multi-party computation (MPC) signing with on-chain party identity authentication, comprising a service provider node, multiple computation nodes with secure hardware, and blockchain infrastructure. This system ensures that no single node can recover the private key, while simultaneously recording and mutually authenticating each node's identity on-chain, providing secure and scalable digital asset custodian services.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If private keys are stored in a single location for ease of access, then transaction signing becomes simpler and faster, but security deteriorates due to increased vulnerability to hackers and data breaches
Solution Approach 1:
The private key is segmented into multiple key shares distributed across different computation nodes. Each node stores only a portion of the key material, and no single node can reconstruct the full private key. This segmentation maintains operational simplicity for transaction signing while dramatically improving security by eliminating single-point failures and reducing vulnerability to hackers.
2Reliability
If multiple computation nodes are added to improve security through distributed key management, then private key security improves, but system complexity increases due to multiple nodes and coordination requirements
Solution Approach 1:
A service provider node acts as an intermediary that simplifies the complexity of coordinating multiple computation nodes. The service provider node manages the distributed key management operations, handles communication between nodes, and coordinates transaction signing processes. This intermediary layer maintains high security through distributed key management while reducing the operational complexity for users and simplifying system architecture.
3Ease of operation
If centralized key management is used to simplify operations, then ease of operation improves, but security deteriorates due to single point of failure and increased target for hackers
Solution Approach 1:
The centralized key management function is segmented and distributed across multiple computation nodes. Each node holds a key share and contributes to the overall key management process, eliminating the single point of failure. This distributed approach maintains operational simplicity through automated threshold signing while significantly reducing the attack surface and vulnerability to hackers.
4Stability of the object's composition
If transactions are made irreversible to ensure finality, then transaction finality improves, but loss of private keys or data breaches lead to irreversible theft or loss of funds
Solution Approach 1:
The private key is segmented into distributed shares across multiple nodes, and transaction signing requires coordination among these nodes through threshold signing. This segmentation ensures that even if some nodes are compromised or experience data breaches, the full private key cannot be reconstructed, preventing irreversible theft while maintaining transaction finality. The distributed key management provides reliability without compromising the irreversibility of completed transactions.
Data Source
AI summary
Embodiments described herein relate to computer systems and methods for digital asset custodian that seamlessly integrates off-chain multi-party computation (MPC) signing with on-chain party identity authentication. The system comprises a service provider node, multiple computation nodes equipped with robust secure hardware, and a Blockchain accessible to all participating nodes. The nodes deliver a threshold signing service with utmost security—ensuring that no single node can recover the private key, while simultaneously recording and mutually authenticating each node's identity on-chain. The system boasts intrinsic support for hierarchical address creation and signing, facilitated by an enhanced protocol. Its scalability, particularly in the quantity of computation nodes, is complemented by efficient communication tailored to the demands of the MPC protocol.