Liquidity.io Docs

Threshold signing custody — CGGMP21 ECDSA + FROST EdDSA, 3-of-5 Byzantine-resilient, 20+ chains

Liquid MPC is the custody layer for the Liquidity.io exchange. All user assets are held in threshold-signature wallets — the full private key never exists on any single machine.

How It Works

Every user account gets a set of threshold key shares distributed across a Byzantine-resilient MPC cluster. To sign a transaction (deposit, withdrawal, settlement), a quorum of nodes must cooperate — no single node can sign alone.

User places trade → ATS matches order → Settlement intent created
                                              ↓
                                    Liquid MPC (3-of-5 cluster)
                                    ├─ Node 1: partial signature ✓
                                    ├─ Node 2: partial signature ✓
                                    ├─ Node 3: partial signature ✓
                                    ├─ Node 4: (not needed)
                                    └─ Node 5: (not needed)
                                              ↓
                                    Combined threshold signature
                                              ↓
                                    On-chain settlement (atomic)

Signing Protocols

Protocol	Algorithm	Chains	Use Case
CGGMP21	Threshold ECDSA (secp256k1)	Bitcoin, Ethereum, EVM chains, XRPL	Most chains
FROST	Threshold EdDSA (Ed25519)	Solana, TON, Polkadot, Cardano	Ed25519 chains
LSS	Dynamic resharing	All	Key rotation without downtime
Doerner	2-of-2 ECDSA	All ECDSA	Optimized two-party
Ringtail	Lattice threshold	LQDTY	Post-quantum consensus

Performance

Operation	3-of-5	5-of-9	10-of-15
Key Generation	12ms	28ms	82ms
Signing	8ms	15ms	40ms
Resharing	20ms	35ms	75ms
Verification	2ms	2ms	2ms

Supported Chains (20+)

Chain	Protocol	Address Type
Bitcoin	ECDSA (CGGMP21)	Legacy, SegWit, Taproot
Ethereum + EVM	ECDSA (CGGMP21)	EOA
Solana	EdDSA (FROST)	Ed25519
Polkadot	SR25519	Ristretto255
Cosmos	ECDSA (CGGMP21)	secp256k1
TON	EdDSA (FROST)	Ed25519
Cardano	EdDSA/ECDSA	Multi-era
XRPL	ECDSA (CGGMP21)	Classic/X-address
BSC, Arbitrum, Optimism, Base, Polygon	ECDSA	EVM
NEAR, Aptos, Sui, Tezos, Algorand, Stellar, Hedera, Flow, Kadena, Mina	Mixed	Chain-native

External Custody Providers

Liquid MPC supports pluggable custody backends for institutions that require third-party custody:

Provider	Status	Integration
Native MPC	Production	Default — 3-of-5 threshold cluster
Fireblocks	Supported	API key + service account auth
Utila	Supported	gRPC client with lazy-loaded connection
Custom	Supported	Any endpoint implementing the signing API

Configure per-tenant via the mpcMode field:

// Native MPC (default)
{ mpcMode: 'liquid-mpc' }

// Fireblocks
{ mpcMode: 'custom', mpcEndpoint: 'https://api.fireblocks.io/v1' }

// Utila
{ mpcMode: 'custom', mpcEndpoint: 'https://api.utila.io/v1' }

Security Model

No Single Point of Compromise

Key shares are generated via distributed key generation (DKG) — no dealer
Signing requires t of n nodes to cooperate (default: 3-of-5)
Storage: ZapDB with ChaCha20-Poly1305 encryption per node
Backups: S3 with pre-encrypted state (encrypted before upload)
Inter-node auth: Ed25519 message signatures
Transport: Consensus-embedded via ZAP wire protocol (no external NATS dependency)

HSM Integration

Hardware Security Module co-signing for institutional-grade security:

HSM	Support
AWS CloudHSM	Supported
GCP Cloud HSM	Supported
Zymbit HSM	Supported (edge deployments)

HSM co-signs settlement intents as an additional approval layer — the MPC signature alone is not sufficient for large withdrawals.

Per-Org Isolation

Each organization gets isolated key shares
Root encryption keys are per-org (managed by Liquid KMS)
Key rotation via LSS protocol (no downtime, no key reconstruction)

Settlement Lifecycle

1. INTENT    — ATS creates settlement intent (order matched)
2. APPROVE   — Risk engine validates (position limits, AML checks)
3. SIGN      — MPC cluster produces threshold signature (3-of-5)
4. CO-SIGN   — HSM co-signs (for withdrawals above threshold)
5. BROADCAST — Signed transaction submitted to chain
6. CONFIRM   — On-chain confirmation recorded
7. FINALIZE  — Settlement marked complete in ATS

API

POST /api/v1/generate_mpc_sig    — Request threshold signature
POST /api/v1/complete             — Mark signing complete
GET  /api/v1/status/:txId         — Check signing status
GET  /api/v1/health               — Cluster health

Infrastructure

Parameter	Value
Cluster	3-of-5 Byzantine-resilient nodes
Storage	Encrypted at rest (ChaCha20-Poly1305)
Backups	Encrypted before upload, geo-distributed
Uptime SLA	99.99%
Endpoint	`https://mpc.liquidity.io`

Liquid MPC — Custody