A security arrangement requiring multiple private keys to authorize transactions, distributing control and reducing risk of unauthorized access or theft.
custody
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What is Multi-Signature Custody?
Multi-signature (multisig) custody requires multiple private keys to authorize a blockchain transaction. Common configurations include 2-of-3 or 3-of-5, where a threshold of keyholders must approve.
Benefits
No single point of failure: One compromised key insufficient
Shared control: Distribute authority across team members
Fraud prevention: Requires collusion to steal funds
Recovery options: Lost key can be replaced if threshold met
Common Use Cases
Corporate treasury management
DAO governance
Exchange cold storage
Institutional custody solutions
Limitations
On-chain visibility, higher gas costs, chain-specific implementations.
See this concept in action across live DeFi protocols.
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