Multi-signature wallets are gaining momentum in the realm of cryptocurrency transactions. Before learning more about why users should prefer Yodaplus multi-sig wallets and their benefits and drawbacks, let us start our inquiry with the simple question: What is a Yodaplus Multi-Signature wallet?
What is a Yodaplus Multi-signature wallet?
Whenever a user transfers XDC from their wallet, the XinFin network creates a transaction. By signing on this transaction digitally, the user authorizes the grid to take care of their funds and deliver the amount to the intended address. Some wallets need only one signature as authorization, and there are wallets shared by multiple users or Co-owners that require multiple signatures.
Depending on precisely what type of a multi-signature you are using, the number of signatures required to Approve and Authorize a transaction could either be equal to or fewer than the number of co-owners.
- For example, if someone uses a 3–3 type of multi-signature wallet, the wallet is shared by three users and requires three signatures to authorize any transaction.
- On the other hand, a 2–3 type multi-signature wallet implies that it is shared by three people and requires two signatures to authorize a transaction.
How does a multi-signature Yodaplus wallet work?
Let us discuss the functioning of a Yodaplus multi-signature wallet. The norm, before multi-signature wallets have been in use, was to store XDC as a single-key wallet. Only one person had to authorize the transaction, and anyone who knew the wallet’s private key could complete the transfer of funds. While this was a faster and easier way to transfer funds, it was more vulnerable in terms of security. It had only one point of failure. Yodaplus multi-signature wallets solved the vulnerability issues by adding multiple layers to the transfer.
- For example, if co-owner A wants to transfer funds in a Yoda plus multi-signature wallet of the 2–2 variety, the wallet creates a transaction that first gets signed by co-owner A.
- Until the other co-owner marks the same transaction, the fund does not move from the wallet. Once co-owner B signs the transaction, the wallet broadcasts it to the XinFin network and transfers the XDC tokens.
The logic of Yodaplus multi-signature wallets works in a fashion that up till the time the second co-owner does not sign the transaction, the transaction proposal remains valid in the wallet. It does not expire. There is no time limit for the co-owner to sign. There is also no hierarchy among the two co-owners involved in the transaction. Any co-owners can originate the transaction, and all the other co-owners can sign and approve that transaction whenever they want.
The procedure is slightly different for a 2–3 multi-signature wallet. Here, any co-owners can originate a transaction, and any one of the two remaining co-owners can sign the transaction to get the approval done.
The Advantages Of a Yodaplus Multi-Signature Wallet
A Yodaplus multi-signature wallet helps eliminate the security concerns that come with a single private key mechanism. It reduces the dependency on one person and, at the same time, makes it difficult for cyber attackers by increasing the number of potential failure points that the hacker would now have to address.
2. No Dependency on one device
For example, a user can save one private key in their mobile phone, whereas the other is in their desktop or laptop device. In such a situation, even losing one of these devices or getting the integrity of any one of the devices compromised would not translate into compromising the wallet and the XDC tokens stored in it.
3. Perfect as an Escrow account
It can serve as an account where one party can keep their XDC tokens stored for the other party to see and withdraw only after they have delivered the goods or services it had promised. In a multi-signature wallet of 2–3 variety, there is also the provision of a third party being present as the mediator or a witness in the transaction.
To explain this arrangement with an example, co-owner A would first deposit the XDC tokens by creating and signing on a transaction proposal for transferring funds to co-owner B in exchange for a service. Under the purview of co-owner C, co-owner B will only sign the transaction and receive the payment when they have delivered what had been promised.
Expanding this logic of escrow account, the board of directors of a company can use multi-signature wallets to control the company’s funds in a more democratic and consensual way. It makes sure that any single member on board or even a sub-group of two or three members can not misuse a company’s funds. For an increasing number of members on the board, the authorities can opt for wallets that require even more signatures, such as 4–6 wallets.
The Disadvantages of a Yodaplus Multisig Wallet
With a significant number of benefits, a Yodaplus multi-signature wallet has its drawbacks too. The process of recovery in a Yodaplus multi-signature wallet is cumbersome. Setting up a Yodaplus multi-signature wallet is not as easy as it is for a single-signature wallet. Setting up a Yodaplus multi-signature wallet requires technical knowledge. Otherwise, one might have to depend on a third-party installer, which may compromise the integrity of the wallet.
Yodaplus Multi-signature wallets are a relatively new technology. There are not many well-established safety nets and legal resources in place in case something goes wrong.
Step by Step guide on How to Create Yodaplus Multi-Sig Safe Corporate Wallet to Manage your XDC tokens
- Open the Yodaplus Multi-Sig Safe wallet web application.
2. Connect a Signer Wallet
To start creating a Yodaplus Multisig Safe account, you first have to connect a signer wallet.
You can select XDCPay or Wallet connect through wallet connect. You can connect your Dcent Biometric hardware wallet to the Yodaplus multi-signature wallet.
Ensure you have some XDC on the wallet, as the Safe deployment will cost some transaction fees.
3. Create your Safe wallet
Once a wallet is selected, you can start the process of setting up your Multi-Sig Safe by clicking on “Create New Safe.” Also, check the Network of XDCPay (Apothem/Mainnet) you are using for creating a Safe Wallet.
First, you need to enter a name to your new Safe.
This name is only stored locally on your computer and never shared with Yodaplus or any third parties.
4. Select signers
Your Safe will have one or more owners. We have prefilled the first owner with your connected wallet details, but you are free to change this to a different owner.
Add additional owners (e.g. wallets of your teammates) and specify how many of them have to confirm a transaction before it gets executed. You can also add/remove owners and change the signature threshold after your Safe is created.
Address prefix for the XDC address should be “xdc...”
5. Add a Signer’s count, Requires the confirmation:
After adding Signers, Select how many signers confirm the transaction or any settings change your Yodalplus Multi-Sig Safe account requires before it is approved.
Make sure you consider your configuration thoroughly. If you do not have access to enough signers to reach the threshold, you won’t recover your assets.
Once you have reviewed all the parameters, you can Submit the creation of your Yodaplus Multi-Sig Safe account.
After clicking on the Submit button, follow the instructions on the screen for paying fees to finalize the account creation.
So basically, after Confirming the Transaction, you will have to wait a few seconds to create your Yodaplus Multisig Safe wallet.
Note: Presented screenshots are taken using Apothem/Testnet. For actual custody, you have to select Mainnet Network.
Yodaplus Multi-Sig Safe Wallet supports XDC coin and other XRC20 tokens like SRX, PLI, USNOTA, GBEX and stable coins like SGDG, EURG, HKDG, USDG. It’s easy to add and manage XRC20 tokens with Yodaplus Multi-Sig Safe.
Visit the official website to create a new vault.
Mainnet URL: https://www.yplusvault.com/
Testnet URL: https://apothem.yplusvault.com/
Weighing the advantages and drawbacks, one can reasonably infer that Yodaplus multi-signature wallets are a credible and highly secure alternative for managing XDC and XRC-20 tokens despite a few demerits.
One can expect that Yodaplus multi-signature wallets will become the default choice for XDC investors and users alike in the days to come. With its diffusion on the market, it can also be assumed that the innovations will make it easy to recover without compromising its safety advantages.