Cryptography Overview

A simplified overview of the cryptographic technology powering Tholos vaults.

Tholos uses advanced cryptographic techniques to keep your vaults secure without requiring any technical expertise from you. This page explains the core concepts in plain terms.

Multi-Party Computation (MPC)

Multi-Party Computation is a method that allows multiple parties to jointly perform a cryptographic operation — like signing a transaction — without any single party ever having access to the full private key.

In practice, this means your vault’s private key is never assembled in one place. Instead, each signer holds a key share, and they collaborate through the MPC protocol to produce a valid signature. The full key is never reconstructed at any point during this process.

Key Shares

When a vault is created, the underlying private key is split into multiple key shares. Each signer in the vault receives one share. A key share on its own is useless — it cannot be used to sign transactions or access funds independently.

This is the foundation of Tholos’ security model: distributing trust across multiple parties so that no single person or device can compromise the vault.

For more on managing your key shares, see Understanding Key Shares.

Threshold Signatures

Not every signer needs to participate in every transaction. Each vault has a threshold — the minimum number of signers that must approve a transaction before it can go through. For example, a vault with five signers might require three approvals (a 3-of-5 threshold).

This provides both security and flexibility. You are protected even if one or more signers are unavailable or their device is compromised, while still being able to move assets when you need to.

MPC vs. Traditional Multisig

You may be familiar with multisig (multi-signature) wallets. While both MPC and multisig require multiple parties to approve a transaction, they work very differently under the hood.

Traditional multisig is implemented through smart contracts on a specific blockchain. Each signer submits their own individual signature to the smart contract, which then verifies that enough signatures have been collected. This approach ties you to a specific chain’s smart contract capabilities and often results in higher transaction fees.

MPC operates at the cryptographic protocol level, below the blockchain layer. The signers collaborate to produce a single standard signature that looks no different from any other transaction on the chain. The blockchain never knows that multiple parties were involved.

This distinction has practical benefits:

  • Chain-agnostic: MPC works across all blockchains Tholos supports, regardless of whether that chain has smart contract functionality. The same vault can hold assets on Ethereum, Bitcoin, Solana, Cosmos chains, and more.
  • Lower fees: Because MPC produces a single standard signature, transaction fees are the same as a regular single-signer transaction.
  • Privacy: On-chain observers cannot tell that a transaction required multiple approvals.

Backup Files

Each signer’s key share is stored in an encrypted backup file. This file is essential for recovering your key share if you lose access to your device. The backup file is encrypted so that only you can decrypt and use it.

Always store your backup files in a safe and secure location. If all signers lose both their devices and their backup files, access to the vault cannot be recovered.

Summary

  • MPC splits your vault’s key into shares so no single party ever holds the full private key.
  • Threshold signatures mean only a minimum number of signers need to approve each transaction.
  • Unlike traditional multisig, MPC works at the protocol level — making it chain-agnostic, cost-efficient, and private.
  • Encrypted backup files let you recover your key share if you lose your device.