A groundbreaking multisignature crypto wallet has been discovered that holds permissions from 12 different blockchain networks. This means that if this single wallet is ever compromised, all 12 networks could potentially lose up to $121 million.
The networks in question, including Zora, Aevo, Hypr, Orderly, Ancient8, Lyra, Mode, Pgn, Parallel, and Metal, were created using the Conduit rollup creation software. This information was shared by L2Beat researcher Luca Donno on May 19.
However, it should be noted that the wallet cannot make transactions without three out of five signatures from the team. Conduit founder Andrew Huang explained that the private keys for these signatures are stored on hardware wallets, making a compromise only possible through physically compromising three out of five individuals.
Huang also stated that the system will soon be upgraded to a five out of seven multisig, reducing the risk of centralization even further. This upgrade is expected to take place in the coming weeks.
Data reveals that multiple Conduit-based networks utilize the same wallet for tasks such as upgrading the network’s bridge. For example, L2Beat’s Aevo data indicates that its account has “unlimited upgrade power” and the potential to access all funds. Aevo currently has over $72 million in total value locked (TVL).
The same wallet is also listed on L2Beat for the Conduit network Lyra, which has over $20 million TVL. Like Aevo, it has the potential to access all funds.
Similar statements can be found for other Conduit networks like Zora, Hpyr, Orderly, Ancient8, Mode, Pgn, Parallel, and Metal. All these blockchain networks combined have a total TVL of approximately $121 million, all connected to a single multisignature wallet.
Layer 2 networks have significantly reduced gas fees for Ethereum users, but critics argue that they are too centralized and do not offer a satisfactory user experience for widespread crypto adoption. However, Layer 2 developers claim that these blockchains will become more decentralized as they progress through Ethereum founder Vitalik Buterin’s decentralization plan, published in November 2022.