Circle Launches MPC Wallet Beta for Ethereum, Polygon, Avalanche with Web 3.0 Apps

Applications of Web 3.0

Circle, the issuer of USD Coin (USDC), has released a beta version of a multiparty computation (MPC) wallet service, as announced on Aug. 8. This new service will enable developers of decentralized finance (DeFi) apps, Web3 video games, e-commerce services and other blockchain applications to create custom wallets for their users. These wallets will be available on Ethereum, Avalanche and Polygon.

MPC wallets utilize a security system that splits a user’s private key into multiple shards and distributes them through a decentralized network. This wallet technology is being used by many Web3 developers. MPC wallets can also be accessed via an application programming interface, providing a “Web2 feel” that some developers and users prefer.

According to Circle, the new service will give developers the option to “choose the best wallet security and control configurations.” For instance, some developers may opt to host their own MPC nodes, while others may opt to connect to Circle’s nodes. Developers can also choose to “share transaction signing responsibilities with the users”, allowing them to recover keys if users lose them, or they can make the product noncustodial by requiring users to sign every transaction.

Circle co-founder and CEO Jeremy Allaire believes that the new service is essential for the promotion of USDC:

MPC Wallets and Controversy

MPC wallets have been the subject of much controversy, with the widely used Multichain MPC bridge hacked on July 7, resulting in investors losing over $100 million. The Multichain team later admitted that all MPC shards had been stored on a cloud server under the control of the CEO.

In a statement sent to Cointelegraph, Circle’s senior director of product management, Gagan Mac, stated that the new service “is built and maintained in-house and doesn’t leverage external vendors,” implying that third-party cloud storage systems will not be used. Additionally, Gagan mentioned that “some developers and enterprises may prefer to host an MPC node,” which they will be allowed to do if they desire. Multichain did not allow partners to host their own nodes.

Circle recently revealed that the demand for euro-based stablecoins is increasing and also argued that a yuan stablecoin would be more advantageous than a Chinese central bank digital currency.