Smart contract wallet

An ordinary account on Ethereum, and on the networks built like it, is controlled by one private key: whoever has it can move everything. A smart contract wallet is a contract account, a program on the network, and it has no private key of its own. Its code decides what counts as permission: signatures from two keys out of three, as in a multisig wallet; more signatures for large amounts; payments only to addresses you trust; a way back in if you lose a key; or a passkey, on networks that can check its signatures.

That’s how multisig works for digital dollars on these networks. Bitcoin works differently: there, a wallet’s rules are written into the script behind each address, and no program runs the wallet.

The code is part of the lock

Because the code holds the money, a transaction that changes the code can hand it over, so the signers have to know exactly what they’re approving. In February 2025, Bybit’s signers approved what their wallet app showed as a routine transfer. Code planted through a developer’s computer at the company that made the app had changed what reached their hardware wallets, in a form no person could read, and what they signed replaced the code running the wallet with the attackers’ own. About 1.46 billion dollars went, according to Elliptic, and the FBI attributed the theft to North Korea.

So with a smart contract wallet, ask about the code as well as the keys: who can change it, who has reviewed it, and whether you can see what a transaction does before you sign it.