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Wallet

Why smart contract wallets are better than MPC wallets

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April 20, 2023

Smart contract wallets — a.k.a. account abstraction wallets — like Sequence bring second-generation benefits that MPC wallets cannot match.

Smart contract wallets, a.k.a. smart wallets, a.k.a. account abstraction wallets are a breakthrough evolution in wallet infrastructure: a second-generation wallet with richer functionality, better usability, and deeper ecosystem integration compared to externally owned accounts (EOAs), which include multi-party computation (MPC) wallets.

While MPC wallets are an advancement over the first iteration of EOAs, as a first-generation wallet, they lack the sophisticated capabilities that smart contract wallets bring to interacting with web3 experiences and managing digital assets.

Developers building with MPC wallets may find the solution proves short-sighted, with constraints that limit the ability to introduce new features and integrations to web3 games or experiences.

The lack of extensibility of MPC wallets may result in developers needing to re-architect their product in the near term, a time-consuming and expensive prospect that can make app development less nimble at best, and significantly delay time to market at worst.

While smart contract wallets can provide the features that an MPC wallet offers, the inverse is not true.

By integrating a smart contract/account abstraction wallet into their web3 game or app, developers can deliver a seamless and secure experience today, while at the same time equipping their product and users with a wallet engineered to accommodate future upgrades that drive the web3 ecosystem forward.

To put it simply, MPC wallets are built for today. Smart contract and account abstraction wallets like Sequence are built for today, tomorrow, and the decades to come.

Let’s compare the Sequence smart contract wallet to MPC wallets.

*MPC wallets use distributed key management, where the private key is divided into shares among multiple parties. This can improve security by requiring a threshold number of participants to sign a transaction. However, there are potential risks when rotating keys or changing signers, as the old set of shares could still be used by malicious parties to gain control over the wallet. While this risk can be mitigated to some extent, doing so can lead to further compromises. By contrast, smart contract wallets do not pose this security risk.

We recommend building your application with a smart contract wallet. Smart contract wallets provide all the benefits of an MPC wallet, and much more. Building with an MPC wallet can leave you at a disadvantage, and it’s non-trivial to migrate to smart contract wallets if you’ve already built with MPC. Tl;dr: build your web3 experience with a smart contract wallet to deliver the best experience for you and your users.

The Sequence smart contract wallet is part of an all-in-one web3 developer platform, designed to make building web3 games, apps, and experiences easy.

Whether you’re a web3-native developer or coming from web2 and are brand new to the space, Sequence’s modular solution makes it simple to integrate web3 technologies, including an embeddable smart contract wallet; payment rails for buying crypto and collectibles with credit or debit; token and NFT APIs; blockchain indexer; relayer; node gateway; marketplaces; and Unity, Unreal Engine, and mobile SDKs.

To learn more, follow Sequence on Twitter, and join our Discord community to connect with other web3 builders. We’d love to help you get to market faster and deliver an amazing experience to your users.


Written by

author

Robert Guenette

Product Marketing Director

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