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What is multisig custody, and how does Fedi leverage it?

Multisig, short for "multi-signature" custody, is a method of securing digital assets by requiring multiple private keys to authorize transactions vs. just one. Consequently, this type of custody is very secure and is leveraged by exchanges to mitigate the risks of hacking and theft.

Fedi utilizes the Fedimint protocol to leverage the multisig model by federating custody across multiple fedimint servers, resulting in the following advantages:

  • The bitcoin held in the mint is never subject to the control of a single individual, making it difficult for a corrupt guardian to steal funds.
  • Redundancy is established as guardians can go offline and transactions will still be processed when a quorum is reached.
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