With our latest release, Backpack Wallet is now the only Solana wallet to support multi-sig protection across the world's most trusted cold storage hardware providers:

• Ledger

• Trezor

• Keystone

Multisig wallet security is one of the most secure methods for storing crypto assets and interacting with the blockchain.

• What is multisig?

• What is the difference between cold storage hardware wallets and hot wallets?

• What is 2-of-3 multsig?

• What is 3-of-3 multisig?

• What are the risks of using multisig protection?

• Why would you use multsig?

• How do I use multisig protection on Solana?

• Hardware Wallet Best Practices

• Frequently Asked Questions About Multisig

Multisig is a short for 'multi signature' which is a method for securing crypto assets with multiple layers of security.

Multisig helps protect against physical attacks because there is no single point where all the keys can be stolen together.

It requires multiple wallet signatures to authorize a transaction, ensuring that no single wallet holder can authorize transactions independently. This method enhances security by distributing control across multiple devices.

• It ensures that no single wallet holder can authorize transactions independently.

• You must have all private keys in order to recreate the multisig configuration file.

Multisig requires more technical knowledge to set up and use however the added security benefits provide significant value for those with complex security needs (such as corporate treasuries).

The most common multisig strategy is called '2-of-3 multisig' which involves two separate cold storage hardware wallets and one hot wallet.

Cold storage hardware wallets are physical devices which hold digital assets and are 'air gapped' from the internet.

• Air gapped means that the device is completely isolated from network connections including Wi-Fi, Bluetooth and USB.

• They boast numerous security functions which prevent physical attack vectors.

Hot wallets are software based apps accessed via web browser or on mobile and are designed to directly interact with blockchain products.

Backpack Wallet is a hot wallet.

• Users typically utilize hot wallets to send and receive assets as well as sign transactions in web3 dApps.

• Hot wallets such as Backpack Wallet offer extended native functions such as token swaps, multichain token bridging, token staking and access to different blockchain networks.

2-of-3 multisig is the most common deployment where users only need 2 private keys and 3 public keys in order to access the assets and sign transaction.

Authorized user(s) must hold the private keys for each individual wallet involved in the multisig.

There are two common configurations for 2-of-3 multisig:

• Two cold storage hardware wallets and one hot wallet

• Three cold storage hardware wallets

For both of these configurations, two of the three designated wallets must approve a transaction before assets can be viewed or interacted with.

Multiple wallets and transactions must be successfully interacted with to access assets.

3-of-3 multisig is the second most common deployment where users need 3 private keys and 3 public keys in order to access the assets and sign transactions.

3-of-3 multisig requires all three designated keys to approve a transaction. This means that every transaction must be signed by three separate wallets.

Requiring approvals from each wallet designated during multisig setup is the key difference between 3-of-3 and 2-of-3.

There are two common configurations for 3-of-3 multisig:

• Two cold storage hardware wallets and one hot wallet

• Three cold storage hardware wallets

This setup ensures maximum security, an attacker would need to compromise all three hardware wallets to access the crypto assets.

Backpack Wallet users can now utilize a combination of Ledger, Trezor and Keystone to set up 3-of-3 protection for their crypto assets.

Multisig security setups are one of the most effective methods of protecting digital assets such as crypto and NFTs, however, it doe

• Multisig security is complex to configure and manage.

• It requires a high level of technical knowledge and losing private keys will make it difficult or impossible to access digital assets.

• If you lose just one private key in a 3-of-3 protection then you will lose access.

Multisig is most typically used for digital assets that require access by multiple team members or members of an organization.

• It is also used by individuals who place a high value on protecting their digital assets.

This level of protection requires more technical knowledge to set up and use, however, the added security benefits provide significant value for those with complex security needs.

• Casual crypto users typically protect their digital assets by simply placing them in a cold storage wallet without configuring multisig protection.

Backpack Wallet can be used to enable 2-of-3 and 3-of-3 multisig protection in a variety of ways including:

• Creating multiple hot wallets in Backpack

• Connecting cold storage hardware wallets to Backpack

• Using a combination of Backpack hot wallets and cold storage hardware wallets

There are numerous reputable cold storage hardware wallets which support Solana (SVM) tokens such as:

• Ledger

• Trezor

• Keystone

Functionally this means that a user will import cold storage hardware wallets into Backpack and then connect Backpack to the multisig creation platform.

Backpack is integrated with several notable Solana multisig wallet platforms, two in particular manage a vast majority of multisig protected funds:

• Squads

• Realms

The platforms completely manage multisig setup including determining number of signers, entering approvers wallet address and setting up a secure vault.

After a multisig account is set up, management of the assets requires using the platform and connecting the appropriate wallets to approve transactions.

There are several cold storage hardware wallet best practices to follow which increases the security of your digital assets.

• Always purchase hardware wallet directly from manufacturers website or official stores on Amazon and other online marketplaces

• Update firmware of hardware wallet before initiating any transactions

• Test hardware wallet connections with small amount of crypto before sending full amounts

• Initiate recovery process before sending full amounts of crypto

• Store recovery information in secured location

• Store local password information in separate secured location

• Multisig is a short for 'multi signature' which is a method for securing crypto assets with multiple layers of security.

• 2-of-3 multisig protection involves using two separate hardware wallets which require two separate approvals to access assets or approve transactions.

• 3-of-3 multisig protection involves using three separate hardware wallets which require three separate approvals to access assets or approve transactions.

• xpub, short for 'extended public key' is a Bitcoin network term. It is a function that allows users to create multiple public keys for a single seed phrase.

• It is most often used to create multiple addresses for receiving assets or interacting with public dApps.

The content presented on this platform is intended solely for general educational purposes and should not be construed as financial or investment advice. The information provided does not constitute an endorsement, suggestion, or recommendation to purchase, sell, or engage with any specific digital assets or investment strategies.

We do not guarantee the accuracy, completeness, or timeliness of the information presented. Users should not rely on this content as a basis for making investment decisions. Our organization and its associated entities disclaim any responsibility for potential errors, omissions, or delays in the information provided, as well as any resulting losses, injuries, or damages.

For any inquiries, please contact support@backpack.exchange

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