Secure asset management is crucial to optimize wallet user experience. Lace’s Shared Wallet beta adds a security layer to the Web3 wallet. Read on to learn about what Shared Wallet beta is, how it works, and how it can help support greater security and peace of mind.
What is Lace’s Shared Wallet beta feature?
Lace’s Shared Wallet beta is one of various possible implementations of multisignature (multisig) technology. Put simply, a multisig (https://www.essentialcardano.io/glossary/multisig) is a type of digital signature created through the combination of multiple unique signatures.
Lace’s Shared Wallet beta feature allows multiple parties to share funds, configured with spending rules based on an agreement between such parties. Shared Wallet beta can be configured to allow authorized parties to spend from it, or to secure the proceeds of a funding round with the required authorization of multiple users. This process enhances your Web3 (https://www.lace.io/blog/why-you-should-get-a-web3-wallet-today) operations security (OpSec).
Multisig technology enables two or more users to collectively sign digital asset transactions. This feature is particularly useful for managing shared crypto asset wallets, or any situation where assets should only be moved under consensus.
How do multisig wallets work?
Accessing multisig Cardano wallets requires at least two private key signatures from predetermined addresses. Multisig wallets can either require a specified threshold of signatures, or the use of all private keys.
In the Lace Shared Wallet beta feature, you can set a threshold during wallet creation, requiring a specific number of signatures to complete asset transactions. The threshold choice is yours, but keep in mind that a maximum of three co-signers is currently supported.
When a transaction is created, it can only be submitted after receiving the minimum required signatures. Once submitted, the assets are transferred as per the transaction details.
The Shared Wallet beta feature leverages a multisig scripting language that:
- defines the rules to authorize transactions
- records transaction proposals and waits for necessary approvals
- collects approvals and keeps track of each signatory’s interaction with the contract
- executes transactions
- enforce the security rules, ensuring that transactions comply with the agreed-upon terms
- enable transparency in how the multisig wallet operates on-chain
Representative Shared Wallet beta use cases
Lace’s multisig wallet’s practical applications can include:
- Enhanced security – hackers find it harder to compromise multisig wallets.
- Treasury management – multisig wallets can act as a joint treasury, requiring multiple members to approve transactions. This helps eliminate the risk associated with a single individual having complete control over an organization’s assets. For assets that belong to multiple parties, such as decentralized autonomous organizations (DAOs), the multisig wallets ensure access can only be successful when authorized multiple key holders are involved.
- Partnership management – multisig is useful in multi-party business arrangements. The feature ensures that assets can only be moved or decisions are made when all parties agree, facilitating mutual trust and joint decision-making.
- Escrow services – multisig wallets can act as a secure escrow in a transaction between two parties. Assets can be held securely until predefined conditions are met, at which point multiple signatures release the assets.
- Inheritance planning – a multisig wallet can involve family members and a legal advisor as co-signers for estate planning. This helps ensure that asset transfers go smoothly and securely once predetermined conditions are met.
- Regulatory compliance – financial entities can use multisig to comply with regulations that require multiple levels of transaction authorizations, helping meet security and compliance standards.
- Backup recovery – using additional signatures as a backup can facilitate asset recovery. If a key is lost, the remaining co-signers can authorize the transfer of assets to a new wallet, providing a safety net against loss.
Try out Lace’s Shared Wallet beta feature
Lace enables you to explore Web3 the fast, easy, and secure way with features like multisig, a DApp connector, multi-staking, bundled transactions, and many more.
To help you get started, we’ve created a step-by-step walk-through guide on how to set up and operate a shared wallet using Lace’s Shared Wallet beta feature. Follow the guide to learn how to create a shared wallet, add co-signers, and manage transactions securely and efficiently. We also have FAQs here.
Your Web3 journey starts with a simple step.
Visit lace.io today to try out Lace and its new multisig feature, and discover Web3.
Disclaimer: Lace cannot recover, restore or access a Lace wallet, which is a non-custodial wallet. Lace does not store or have access to private keys, recovery phrases, or paper wallets. Users are solely responsible for keeping their private keys and secret recovery phases safe, and for recovering or restoring their own respective Lace wallet. Additionally, Lace cannot recover, restore, or access a Lace wallet in the event a user passes away or if there is a dispute between multiple parties involving a Lace wallet. Users are solely responsible for addressing and managing these risks.