Multi-signature wallet: shared control over funds

Distributing Trust Across Keys

A multi-signature—or multisig—wallet requires more than one private key to approve a transaction. The most common configuration is M-of-N: for example, 2-of-3 means three keys exist and any two are needed to sign. The signing keys can be held by different people, different devices, or different geographic locations.

Multisig solves a fundamental security problem of single-key wallets: any single compromised key, lost device, or coerced individual can drain the funds. With a 2-of-3 setup, an attacker who steals one key still cannot move anything. You who lose one key can still recover with the remaining two. Organizations use multisig to require co-signers on treasury transactions, eliminating the risk that any one employee can unilaterally move funds.

The flip side is operational complexity. Setting up multisig requires careful planning—who holds which key, how they are stored, what happens if a holder becomes unreachable. Signing a transaction takes longer because each party must independently review and sign. Solutions like Gnosis Safe on Ethereum make multisig usable for DAOs and treasuries by providing a clear interface, transaction queue, and integrations with the wider DeFi ecosystem.