Commerceblock’s Mercury Wallet: Transfer Funds Quickly and Securely Without Relying on the Blockchain

•Commerceblock’s Mercury Wallet was introduced last year as an implementation of both statechains and CoinSwaps.
•The wallet was the first to implement a new second-layer scaling solution, providing a new mixing tool.
•The statechain utilizes an ECDSA-MPC address, where the private key is sharded between the user and the operator. A timelocked, pre-signed withdrawal transaction is created and signed, with the operator before sending funds to the new address.

Commerceblock’s Mercury Wallet was launched last year with the goal of introducing a new level of scalability and privacy to the cryptocurrency space. The wallet was the first to implement both statechains and CoinSwaps, two cutting-edge solutions that allow users to transfer funds securely and quickly without needing to transact on-chain.

Statechains are an off-chain mechanism for transferring funds freely between anyone without needing to use the blockchain. To initiate a statechain, the original owner/user collaborates with a statechain operator to construct an ECDSA-MPC address. This address is secured by a private key that is sharded between the user and the operator, creating a two-part key. A timelocked, pre-signed withdrawal transaction is then created and signed by the operator, before sending the funds to the new address. Neither side fully controls the private key, and the user has a pre-signed transaction that allows them to unilaterally take the coins back after the timelock.

When the user wishes to transfer the statechain, they notify the operator who then collaborates with the receiver. The receiver and operator generate a new set of private key shares that correspond with the same address, and generate a new pre-signed transaction with a lower timelock than the last one, and then the operator deletes their old keyshare. The way the cryptography works, the operator’s new keyshare will only work with the new user’s keyshare, so if they delete the old one, it is not even possible for them to collaborate with the old user to spend the coins.

The wallet also implements CoinSwaps, a new design that allows users to mix their funds multiple times without needing to transact on-chain. CoinSwaps are based on the idea of atomic-swaps, where two parties can exchange coins directly without the need for a third-party intermediary. This allows users to mix their coins multiple times without having to wait for each transaction to clear.

Overall, the introduction of Commerceblock’s Mercury Wallet has provided users with a new level of scalability and privacy. By leveraging both statechains and CoinSwaps, users can transfer funds securely and quickly without needing to rely on the blockchain, providing a new level of flexibility and convenience.