Which Wallet is Right for Your Web3 Startup: Embedded, Hardware, MPC, or Multisig?

A common piece of advice in the industry is that choosing a wallet for your product is not just selecting a tool - it is about defining a philosophy for UX and security. One thing becomes clear quickly: the easier it is to use, the higher the risk; the more secure it is, the harder it is to use.

At Fystack, we often guide builders to consider the specific needs of their product and user base, instead of applying a one-size-fits-all approach. The key question is:

“Where will your users store their assets, and how can they feel secure while still enjoying a smooth experience?”.

Embedded Wallets: A Smooth Gateway for Mass Adoption

At Fystack, we see embedded wallets as the most seamless bridge for users stepping into Web3. To be honest, the experience feels almost identical to Web2: log in with an email, Google account, or social login, and a wallet is created inside the app automatically. No browser extensions, no seed phrases to write down, no fear of forgetting a password.

For builders, the upside is clear: onboarding rates skyrocket because newcomers aren’t overwhelmed at the very first step. With just a few clicks, users are inside your app, enjoying the flow as if they were signing up for any familiar Web2 service.

That said, there is a trade-off. Most embedded wallets today rely on a third party to manage private keys or key shards. In other words, you give up a degree of control for convenience. For more security-conscious users, not “holding the keys” themselves may feel uncomfortable.

In our view, embedded wallets are an excellent fit for products that prioritize mass adoption - think games, social apps, or marketplaces. They lower the entry barrier and open the door wide for new users. But long term, it’s important to plan a security upgrade path for your power users - those who will eventually bring significant assets into your app.

Hardware Wallets: Maximum Security, Minimal UX

When it comes to security, hardware wallets like Ledger or Trezor are the gold standard. The private key is stored offline in a dedicated device, completely isolated from the internet, which makes remote hacks virtually impossible. Signing a transaction happens on the device itself, so the key never leaks out.

This makes hardware wallets the go-to choice for individuals or organizations looking to protect large holdings or manage treasuries with the highest level of safety.

But extreme security comes at the cost of user experience:

• You need to purchase and carry an additional device, which is unfamiliar to most users.
• Every transaction requires plugging it in, entering a PIN, and pressing confirm which feels excessive if you just want to swap tokens or mint an NFT.

That’s why we like to think of hardware wallets as bank vaults: perfect for long-term storage or institutional treasury, but impractical for everyday interactions. If you’re a retail user safeguarding substantial assets, or an organization managing large funds, a hardware wallet is a wise investment. But if you’re building a dApp or game for the mainstream, don’t expect users to buy extra hardware just to use your app.

Multisig Wallets: Collective Security, Slower Pace

Multisig wallets gained popularity with DAOs. A transaction requires multiple signatures to execute. Each private key share is held separately by a signer, and a transaction is only broadcast when enough signatures are collected.

This approach removes the risk of “one compromised key = total loss.” However, collective security often comes with slower operations. For example, a DAO may have to wait days for a payout because a signer is unavailable.

Multisig is suitable for products or organizations that need to protect shared funds, such as DAOs or small teams managing internal risk. It is less suitable for systems that process hundreds of transactions daily.

MPC: Secure and User-Friendly

MPC (Multi-Party Computation) is a newer approach. Here, the private key is split into multiple shares and distributed across servers or signers. No single party holds the full key, so compromising one share does not allow transactions to be signed.

What we value most about MPC is how it preserves the privacy of signers. Even if multiple people are approving a transaction behind the scenes, the blockchain only ever sees a single signature. Hackers cannot tell who signed or who holds authority, which significantly reduces the risk of targeted attacks.

Because the signing process is based on distributed computation, MPC also enables seamless automation flows. For example, auto-approvals for smaller transactions or rule-based signing for treasury operations - capabilities that traditional multisig cannot provide.

Another key advantage: MPC is chain-agnostic. It works across Ethereum, Solana, and emerging blockchains, without being locked into a specific infrastructure like multisig solutions.

For users, the experience is similar to a hot wallet. Many enterprise solutions such as Copper, BitGo, and Cobo use MPC to balance usability and security.

The challenge for startups is cost: enterprise-grade MPC solutions can range from $500-1,000 per month, or $50,000-100,000 per year, often out of reach for small teams.

There are also more accessible MPC options for developers and small startups like Fystack. Fystack lets developers and small startups try the wallet first - you can explore it freely for a month, without needing a live demo. The idea is simple: experience it, then decide if it fits your product, without compromising security or UX.

We are a startup supported by Superteam (Solana) and have already launched several features in collaboration with partners such as Gaian and Webacy.

Our Perspective

There is no perfect wallet: only the one that fits your product and user base.

• If you are building a game or NFT product for mass adoption, users are unlikely to adopt cold wallets.
• If you are building infrastructure for an organization, security is the top priority, with UX secondary.

The decision depends on your long-term strategy. You may invest in secure solutions like MPC from the start, or start with simpler wallets to accelerate growth and upgrade later.

Ultimately, the wallet is more than a place to store tokens. It is your users’ first point of interaction, shaping their perception of your product. Your choice reflects whether your strategy prioritizes fast, easy growth or building a strong, trustworthy foundation.

Start your free trial and explore MPC at your own pace with us!