Glossary Entry

What is Hardware-Hybrid Custody?

Hardware-Hybrid Custody stores one MPC key share on physical hardware and distributes remaining shares across the MPC network, preventing cloud-based attacks from moving funds.

Overview

Hardware-Hybrid Custody stores one MPC key share on physical hardware and distributes remaining shares across the MPC network, preventing cloud-based attacks from moving funds.

DeAgenticAI’s Agentic Control Plane enforces cryptographic policy over AI agent authority — separating what an agent can do from what it is authorized to do — in Web3 and enterprise financial environments. Hardware-Hybrid Custody is the institutional security layer within that stack that closes a specific residual risk in cloud-native MPC deployments: the scenario in which an attacker compromises enough cloud-hosted signing nodes to reach a signing threshold without ever breaching a physical perimeter.

How does it work?

  1. 1

    Hardware Key Share — At provisioning, one key share is generated and written to a physical hardware security device. This share does not leave the device, is not replicated to cloud nodes, and is not accessible through any network interface. Physical custody of the device is a direct component of the signing model — not a disaster recovery measure.

  2. 2

    Distributed MPC Shares — The remaining key shares are distributed across the MPC signing node network. No individual node holds sufficient key material to sign independently. A threshold signature requires a qualifying quorum of MPC shares combined with the hardware share — both conditions must be met for the ceremony to complete.

  3. 3

    Attack Surface Change — In a standard cloud MPC deployment, the complete attack surface is: any t-of-n cloud nodes. In a Hardware-Hybrid Custody deployment, the attack surface is: any subset of cloud nodes meeting the MPC quorum threshold, and the physical hardware device. Even complete compromise of every node in the MPC network cannot produce a valid signature without the hardware-held share. An attacker must achieve cloud-scale compromise and physical breach simultaneously.

  4. 4

    Connection to Intent-Evaluated MPC — Hardware-Hybrid Custody operates at Layer 6 of the ACP stack, directly below the Intent-Evaluated MPC layer at Layer 7. Both operate as part of the MPC signing ceremony: Hardware-Hybrid Custody provides the physical key share that must participate in the threshold signature, while Intent-Evaluated MPC requires each signing node to independently verify the policy authorization hash before contributing a partial signature. The two layers form a dual-verification architecture — neither alone can produce a valid signature. [/glossary/intent-evaluated-mpc/ — link when live]

Why does this matter?

Hardware-Hybrid Custody closes the residual risk that remains in fully cloud-hosted MPC systems: if enough cloud nodes are compromised to reach threshold, funds can be moved without any physical breach. By requiring one key share from a physically held hardware device, DeAgenticAI adds a second trust domain that cloud compromise alone cannot satisfy.

For institutions managing tokenised real-world assets and on-chain treasury operations, this changes custody from “secure if the cloud perimeter holds” to “secure even if cloud infrastructure is breached.” A valid signature requires both the MPC quorum and the hardware-held share, so attackers must achieve cloud-scale compromise and physical access at the same time.

Hardware-Hybrid Custody also preserves automation for governed AI-agent execution. It is not a manual approval model for every transaction; it is a cryptographic boundary at the key layer. Policy-governed autonomous workflows can continue, while the physical share enforces a hard stop against cloud-only key exfiltration and unilateral signing.

Inside the Agentic Control Plane, this layer works with upstream controls like Intent Sanitization and Policy DSL, and with downstream signing enforcement in Intent-Evaluated MPC. Together they provide defense in depth: identity and intent checks, policy verification, and physical-key participation in the final signature ceremony.

Frequently Asked Questions

What is Hardware-Hybrid Custody?

Hardware-Hybrid Custody is DeAgenticAI's institutional security model in which one MPC key share is stored on a physical hardware device — Ledger, YubiKey, or HSM — while remaining shares are distributed across the MPC signing node network. A valid signature requires both the cloud MPC quorum and the hardware-held share. No cloud-based attack can produce a valid signature without also achieving a physical breach of the hardware device.

How is Hardware-Hybrid Custody different from standard cloud MPC?

In standard cloud MPC, all key shares reside on network-accessible nodes. An attacker who compromises enough nodes to meet the signing threshold can produce a valid signature entirely from cloud infrastructure — no physical breach required. Hardware-Hybrid Custody removes this possibility by placing one share on a physical device outside the cloud perimeter. Complete compromise of every MPC node in the network is not sufficient to sign without the hardware share.

Can AI agents sign autonomously under Hardware-Hybrid Custody?

Yes. Hardware-Hybrid Custody is designed for agent-compatible automated signing. The hardware device participates in the multi-party signing ceremony as part of the automated execution flow — institutions do not manually approve each individual agent transaction. The physical custody requirement enforces a security boundary at the key layer, not a manual approval gate at the transaction layer.

How does Hardware-Hybrid Custody relate to Intent-Evaluated MPC?

The two layers operate as a dual-verification architecture within the ACP. Intent-Evaluated MPC at Layer 7 requires signing nodes to verify the policy authorization hash before contributing partial signatures. Hardware-Hybrid Custody at Layer 6 requires the physical key share to participate in the threshold signature ceremony. An agent proposal must satisfy both: policy compliance verified by IEMPC, and physical key contribution by Hardware-Hybrid Custody.

Shape the Control Layer for Agentic AI

Our early access is invite-only. Join the design partner waitlist to track DeAgenticAI's progress and shape governed autonomous execution with our team. No marketing fluff-just infrastructure updates.

By joining, you agree to receive updates about our platform. No spam, ever.