Fireblocks Integration: Secure Custody and DeFi

One leaked private key — and millions of dollars frozen. Or an employee with hot wallet access drains assets without approval. That's exactly the scenario Fireblocks addresses — an institutional custody platform with key splitting via the MPC-CMP protocol. We are certified Fireblocks partners, have implemented over 50 projects, and processed more than 100,000 transactions with zero incidents. In practice, this means your cryptocurrencies are protected at the level of major banks, and your compliance team gains full control over every withdrawal.

How MPC-CMP Works and Why It's Secure

The key is split between Fireblocks servers, the client's mobile app, and (optionally) an independent third party. Signing requires at least 2 out of 3 participants. Compromising one node does not expose the key. This eliminates the risk of insider attacks or seed phrase leaks. The MPC protocol provides a mathematical guarantee: even if one node is compromised, the attacker cannot reconstruct the key.

Policy Engine. Rules for each transaction type: address whitelist, limits, dual approval requirements, time-based rules. Any transaction violating a policy is automatically blocked. In practice, this prevents up to 99% of fraudulent operations. One of our clients, a hedge fund manager, prevented an attempted $2M withdrawal to a suspicious address thanks to this setup.

Vaults and Wallets. A Vault is a logical group. Inside a Vault, Wallets hold different assets. One Vault = one client, one trading account, or one strategy. We recommend creating a separate Vault for each business unit to isolate risks and simplify audits.

Integrating the Fireblocks API

We connect the Fireblocks SDK to your backend in three steps: generate an API key, create a vault account, and configure transactions. The code below is a basic schema we adapt to your business logic.

import { FireblocksSDK, PeerType, TransactionOperation } from "fireblocks-sdk";

const fireblocks = new FireblocksSDK(
  privateKey,          // RSA private key for API authentication
  apiKey,              // API key from Fireblocks Console
  "https://api.fireblocks.io"
);

// Create a vault account
const vault = await fireblocks.createVaultAccount("Client_123");

// Create a wallet inside the vault
const wallet = await fireblocks.createVaultAsset(vault.id, "ETH");
console.log(`Deposit address: ${wallet.address}`);

// Send a transaction
const txResponse = await fireblocks.createTransaction({
  assetId: "ETH",
  source: {
    type: PeerType.VAULT_ACCOUNT,
    id: vault.id,
  },
  destination: {
    type: PeerType.ONE_TIME_ADDRESS,
    oneTimeAddress: { address: "0xRecipient" },
  },
  amount: "0.5",
  note: "Payment to client",
});

// Wait for completion (transaction goes through Policy Engine and MPC signing)
const txInfo = await fireblocks.getTransactionById(txResponse.id);

How to Set Up Webhooks for Transaction Monitoring

Fireblocks notifies about transaction statuses via webhooks. Important: webhooks are signed with RSA — you must verify the signature, otherwise an attacker could impersonate events. We implement validation in four lines:

import { FireblocksWebhookHandler } from "fireblocks-sdk";

app.post("/fireblocks/webhook", express.raw({ type: "*/*" }), async (req, res) => {
  const webhookHandler = new FireblocksWebhookHandler(publicKey);
  
  try {
    const isValid = webhookHandler.validateSignature(
      req.rawBody,
      req.headers["fireblocks-signature"] as string
    );
    
    if (!isValid) {
      return res.status(401).send("Invalid signature");
    }
    
    const event = JSON.parse(req.body.toString());
    
    switch (event.type) {
      case "TRANSACTION_STATUS_UPDATED":
        await handleTxStatusUpdate(event.data);
        break;
      case "VAULT_ACCOUNT_ADDED":
        await handleNewVault(event.data);
        break;
    }
    
    res.status(200).send("OK");
  } catch (err) {
    res.status(500).send("Error");
  }
});

How to Connect DeFi via Web3 Provider

For smart contracts, we use the Fireblocks Web3 Provider. It translates standard Web3 calls into signatures via the Fireblocks API. Example integration with any protocol:

import { FireblocksWeb3Provider, ChainId } from "@fireblocks/fireblocks-web3-provider";

const provider = new FireblocksWeb3Provider({
  privateKey: process.env.FIREBLOCKS_API_PRIVATE_KEY!,
  apiKey: process.env.FIREBLOCKS_API_KEY!,
  vaultAccountIds: "0",
  chainId: ChainId.ETHEREUM,
});

const web3 = new Web3(provider);
// Standard web3 calls now use Fireblocks for signing
const contract = new web3.eth.Contract(ABI, contractAddress);
await contract.methods.deposit(amount).send({ from: vaultAddress });

We guarantee that all transactions pass through the Policy Engine before being broadcast to the network. This eliminates the risk of sending funds to an incorrect address.

How to Send a Transaction in 3 Steps

1. Create a vault and wallet — use createVaultAccount and createVaultAsset.
2. Set up Policy Engine — define address whitelist and limits.
3. Execute the transfer — via createTransaction. The transaction automatically goes through MPC signing.

What Are the Integration Stages?

What You Get in the End

• A fully configured custody platform with asset isolation by client or strategy.
• Automatic compliance control for every transaction (Policy Engine).
• Ability to safely participate in DeFi: staking, AMM, lending.
• Integration with your existing backend via a single API.
• Up to 40% reduction in security costs compared to building MPC yourself. One client saved $120,000 per year in operational expenses; another saved $75,000 on compliance audits.

When Is Fireblocks Justified?

Managing assets over $10M — a guideline, not a strict boundary. Presence of SOC 2, ISO 27001, or similar requirements. A team of several people with signing authority. Integration with traditional banking systems. For startups and smaller volumes, Safe Multisig plus a custom custody workflow is significantly cheaper. We can help you choose the optimal solution if you are unsure.

Get a free consultation on Fireblocks integration — we will assess your project and propose an implementation plan. Contact us to discuss details. Request a one-month Sandbox demo account.

We develop crypto wallets turnkey — from custodial solutions for fintech to smart contract accounts on EIP-4337. 5+ years in blockchain development, 40+ projects implemented. Let's examine which architecture to choose for your task and why MPC or Account Abstraction solve the private key problem that MetaMask and classic HD wallets could not close.

Why are classic wallets dangerous for business?

A seed phrase in a browser extension is the only way to restore access. For retail users, this is a barrier to entry (lost phrase = lost money). For corporate treasuries, it is incompatible with compliance (KYC/AML, role model, multisignature). Any single key leak compromises all funds. These risks are built into the architecture, not poor UX.

We eliminate them at the protocol level: MPC wallets (key never fully assembled), smart contract wallets (authorization logic in code), hardware HSM for institutional storage. Details below.

What is the real difference between custodial and non-custodial?

Custodial — the provider stores the private key. User authenticates via email/password/OAuth. Recovery is trivial, KYC/AML built-in. For centralized financial applications, often the only regulatory acceptable option. Risk: single point of failure (e.g., Bitfinex hack — $72M, FTX — $600M+ client funds).

Non-custodial — keys are with the user. Provider has no access to funds. Storage responsibility falls on the user. For 99% of people, this model is unworkable without additional protection — hence MPC.

MPC wallets: the key that doesn't exist

Multi-Party Computation (MPC) is a cryptographic protocol that allows multiple parties to jointly sign a transaction without revealing their partial secrets. The private key never exists in its assembled form.

Standard scheme: 2-of-3 MPC between user (share on device), provider server, and backup cloud storage. Transaction is signed by any two of three parties. Lost phone — recovery via server + cloud. Server compromised — attacker holds only one share, signing impossible.

TSS (Threshold Signature Scheme) is a concrete implementation of MPC for ECDSA/EdDSA. Algorithms: GG18, GG20, CGGMP21 (the latter is faster and has better security proofs). Libraries: tss-lib (Go, from Binance), multi-party-sig (Go, from Coinbase), ZenGo-X/multi-party-ecdsa (Rust).

MPC requires no on-chain changes — to the blockchain, the signature looks like a normal single-key signature. This saves gas and keeps the key management scheme confidential (not published in chain) — unlike multisig.

Account Abstraction (EIP-4337): smart contract as wallet

EIP-4337 completely changes the model: instead of EOA (Externally Owned Account), a smart contract Account is used. Authorization logic is in contract code, not in protocol cryptography. This opens up arbitrary signing logic, social recovery, session keys, sponsored transactions, and batch operations.

How the EIP-4337 stack works:

User → UserOperation → Bundler → EntryPoint contract → Account contract
                                          ↑
                                    Paymaster (optional, pays gas)

UserOperation — a new type of object (not an L1 transaction). Bundler collects UserOps from an alternative mempool, packs them into one transaction, and sends to EntryPoint. EntryPoint calls validateUserOp on the Account contract — Account decides if the signature is valid.

Practical capabilities:

Social recovery. The contract stores a list of guardians (other addresses or a service). Lost key — guardians vote for replacement. Argent has used this scheme since 2020.

Session keys. A temporary key with limited rights: interaction only with a specific contract, until a certain date, up to a certain amount. For GameFi and dApps — user does not sign every micro-transaction.

Paymaster. A third-party contract pays gas for the user. Onboarding pattern: user does not hold ETH, gas is sponsored by dApp or taken from ERC-20 tokens.

Implementations: Safe{Core} Protocol, Biconomy SDK (Stackup), ZeroDev (Kernel), Alchemy (Rundler bundler). EntryPoint v0.6/v0.7 is deployed and active on Ethereum mainnet, Polygon, Arbitrum, Optimism. We guarantee compatibility with the latest contract versions.

What is a Hardware Security Module for corporate wallets?

For treasuries and institutional storage: HSM (Hardware Security Module). The key is generated and never leaves the secure chip. Signing happens inside the HSM. Hardware attestation is supported. Solutions used: AWS CloudHSM, Azure Dedicated HSM, Thales Luna, YubiHSM 2 (for small volumes). Integration via PKCS#11 or cloud-specific API.

A combination of HSM + MPC is optimal for institutional use: key shares are stored in HSMs on different servers/jurisdictions, signing via TSS. This ensures compliance with regulatory requirements (e.g., for crypto custodians).

Integration with dApps: WalletConnect and standards

Any wallet must be able to interact with dApps. Standard: WalletConnect v2 (Sign API): QR code or deep link, peer-to-peer encrypted channel via relay server. For browser extensions: EIP-1193 (Ethereum Provider API).

On the frontend, we use wagmi + viem — one interface for MetaMask, WalletConnect, Coinbase Wallet, injected providers. For Account Abstraction: EIP-5792 (wallet capabilities) and EIP-7677 (paymaster service).

Development process

1. Threat model — who is the user (B2C, B2B, institutional), what operations, what is the acceptable risk model. Architecture depends on this.
2. Selection and design of key storage scheme — MPC, HSM, multisig, or a combination.
3. Development of Account contract (if EIP-4337) or integration of MPC library.
4. Backend — MPC coordination, session management, paymaster service (if needed).
5. Mobile/browser application — UI with WalletConnect integration, biometrics, QR.
6. Integration with dApps — EIP-1193, WalletConnect v2.
7. Audit of contracts and cryptographic implementations — mandatory step. MPC libraries have known vulnerabilities (GG18 susceptible to attack with malicious participant without abort protocol). We use libraries with up-to-date security reviews (CGGMP21). Experience passing audits with Certik, Hacken, Trail of Bits — we have certificates.

What is included in the work (deliverables)

• Source code of smart contracts (Solidity/Rust) with documentation
• Backend MPC coordination service (Go or Rust) with API
• Mobile application (iOS/Android) or browser extension
• Integration with WalletConnect, Ledger/Trezor (if required)
• Preparation for security audit (vulnerability report)
• Administrator and user documentation
• Access to repository, CI/CD, monitoring (Tenderly, Etherscan API)
• Training of your team (2-3 sessions)
• Post-launch support — 1 month

Timeline and cost

Cost is calculated individually for your project. We will estimate within one day — contact us by email or Telegram. We provide a guarantee on code and timeline.

Typical mistakes in crypto wallet development (and how to avoid them)

• Using outdated MPC libraries — GG18 without abort protocol. Choose CGGMP21 or tss-lib with up-to-date audit reports.
• Tight coupling to a single blockchain — not abstracting for L2/sidechains. Use viem/wagmi for cross-chain.
• Ignoring MEV attacks — when using multisig without timelocks. Add tx simulation (Tenderly) and sandwiching protection.
• Lack of fallback recovery mechanism — for Account Abstraction, not setting up social recovery. Include from the first release.

We eliminate these pitfalls at the design stage — for each project, we create a threat model and security checklist.

Need a reliable wallet with no compromises? Get a consultation from our architect — we will analyze your task and propose an architecture with a precise estimate. Leave a request — we will respond within a day.