Securing Ethereum Transactions Through Schnorr Signatures

At the beginning of 2024, InFlux launched the SSP Wallet, bringing true native Schnorr multisignature aggregation to Ethereum for the first time.

Built using ERC-4337 — a protocol for EVM account abstraction that allows users to initiate customizable transactions from programmable smart contracts — the SSP Wallet revolutionized how personal assets could be managed on Ethereum.

So, in 2025, we will review the differences between traditional Ethereum multi-sig and Schnorr multi-sig transactions, the limitations of traditional ones, and how Schnorr signatures solve them.

Let’s get the “Flux” on with it, shall we?

Traditional Multi-Signatures on Ethereum

Multi-sig transactions allow multiple parties to sign a blockchain transaction. The transaction will not execute unless the parties involved agree on its terms and add a predefined number of signatures, a process known as threshold signing.

How it works:

• One party initiates a transaction through an Ethereum Externally Owned Account (EOA), which is controlled by a private key and allows users to sign and send EVM transactions.
• The transaction is sent to a multi-sig smart contract that holds the funds for signature verification.
• The other parties then sign the transaction off-chain using their private keys.
• The signatures are submitted to the multi-sig contract.
• If the signing threshold has been met, the contract executes the transaction.

Multi-signatures decentralize blockchain transactions, enabling more intricate and collaborative transaction signing processes for increasingly complex on-chain activities.

All signatures of parties involved in a traditional Ethereum multi-sig transaction are distinct and viewable on-chain.

Schnorr Multi-Signatures

The most significant differences between regular multi-sig transactions and Schnorr multi-sig transactions are that:

1. Schnorr multi-sig removes the need for individual EOAs to sign a transaction, which, up until the release of SSP, was needed to initiate native Ethereum multi-sig transactions.
2. Party signatures are not distinct or viewable on-chain. Schnorr aggregates all party signatures into a single indistinguishable one, obfuscating the identities of all involved parties for enhanced privacy.

How a Schnorr Multi-sig Transaction Works:

• Instead of initiating a transaction through an Ethereum EOA, each signing party generates a public and private key pair.
• The public keys are aggregated to calculate a singular master public key (MPK).
• Each party then uses its private key to generate a random number — a nonce — off-chain to represent a signature share.
• All party signature shares are summed up to create one transaction signature, which is then verified on-chain by the MPK, allowing the transaction to be executed.

The Pitfalls of Traditional Multisignatures and the Solutions of Schnorr

The more parties involved in a traditional multi-sig transaction, the more signatures are verified, and gas fees go up for every signature added.

Additionally, verifying multiple signatures one at a time takes up block space and computing power, potentially leading to network congestion and longer transaction execution times. Schnorr signatures solve this as only one aggregated signature needs to be authenticated and paid for in gas fees.

As we mentioned earlier, once executed, all parties’ signatures in a traditional multi-sig transaction are viewable on Ethereum. This sounds excellent for transparency but not so much for privacy, as everyone who participated in the transaction can be traced. When Schnorr aggregates signatures, all parties involved in a transaction are protected.

Conclusion

The reliance on EOAs has made implementing native Schnorr multisignatures on Ethereum difficult. EOAs are needed to initiate a multi-sig transaction on Ethereum and require an intermediary smart contract to communicate between involved parties. This middle-man-like step in communication keeps the transacting parties separate and their signatures distinguishable.

Everything changed with the release of the SSP Wallet, which stands for “secure, simple, and powerful.”

Introducing Schnorr multi-signature aggregation to Ethereum for the first time, SSP, an open-source hot wallet, improves privacy and user control.

Through the SSP Wallet’s Schnorr signatures, users can initiate Ethereum multi-sig transactions without an EOA or needing to worry about their signatures being retained on-chain.

What’s more, is that Halborn recently audited SSP to ensure the best security practices. The SSP wallet and its relay and keys were audited, as well as the SSP Schnorr Signatures SDK and SSP Account Abstraction Schnorr Signatures. Access the complete audit reports here.

At InFlux, we are constantly innovating to maintain user privacy and security. The SSP Wallet is just one way we accomplish this! For transactions initiated the way you want, download the SSP Wallet today and follow InFlux on X for the latest updates on what we are up to.