How do MCP servers work with embedded wallets like Privy or Openfort?
Category:Blockchain & Web3
Quick Answer
Embedded wallets with MPC key sharding serve as a secure signing layer for MCP agents — the server never touches actual key material. Providers like Privy (75M+ accounts), Openfort (smart accounts), and Para (passkey-centric, cross-chain) authorize transactions without exposing full private keys.
Detailed Answer
The Convergence of Two Trends
Embedded wallets — wallets auto-provisioned inside applications with no seed phrases — are the natural key management layer for MCP agents.
How It Works
Instead of giving an MCP server a raw private key (custodial model):
- MCP server crafts the transaction
- Sends signing request to embedded wallet SDK
- Wallet uses MPC (Multi-Party Computation) or Shamir's Secret Sharing
- Neither the app nor the provider holds the full key
- Transaction signed and broadcast
Provider Comparison
| Provider | Key Technology | Scale | Best For |
|---|---|---|---|
| Privy (Stripe) | MPC key sharding | 75M+ accounts | Enterprise, fiat rails |
| Openfort | Smart accounts, self-hostable | Growing | Gaming, self-custody |
| Para | Passkey-centric | Cross-chain | Multi-chain agents |
Benefits for MCP Agents
- No raw key exposure — MPC splits key across parties
- Programmable policies — spending limits, whitelists
- Cross-chain support — one wallet, multiple networks
- Gas abstraction — agent doesn't need native tokens
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