As laid out in its official documentation, Multichain aims to solve the problem of a single point of failure that occurs when a single signature is used to send assets or interact with smart contracts cross-chain. The solution, according to Multichain, is to use Threshold Signature Schemes (TSS) and split the security key. This is where Multichain's Secure Multi-Party Computation (SMPC) network comes into play.
Multichain's SMPC network of nodes implements TSS Distributed Key Generation, an algorithm custom written and optimized by the engineers at Multichain. Each node in this unique selection works independently from the others to produce part of the private key responsible for confirming transactions. Not one of them can independently sign transactions, yet they all collaborate to do so. Furthermore, the key is never fully reconstructed during the signing process and remains safe from interception as it's kept in separate parts.
By digitally signing transactions, the SMPC network is able to effectively manage asset accounts and smart contracts across a variety of blockchains. This comprehensive system makes it possible for users to perform countless tasks with ease and efficiency.
Cross-chain bridges are the connection between two blockchains. When an asset is to be bridged, it's sent to a special SMPC wallet address and kept safe in a Decentralized Management Account on its origin chain. On the destination chain, this triggers a smart contract that mints tokens 1:1 with those held in the Decentralized Management Account and then sends them directly into your wallet. The reverse occurs when you withdraw coins from your destination blockchain - they're burned off before SNMP nodes quickly release them onto their source blockchain again.
In addition to its unique SMPC network as described above, VeMulti is another unique feature of Multichain. VeMulti stands for vote escrow Multi and it was launched on May 9th, 2022.
As the governing system for multiDAO, VeMulti rewards stakers of MULTI with veMULTI NFTs. These holders will be capable of initiating and supporting governance proposals through their votes. The degree of rights and power are based on both your amount of MULTI invested as well as how long it is locked up in the system.
