Decaying Multisig
A decaying multisig wallet reduces the number of required signers over time. The idea is that if you become incapacitated or lose access to some keys, your funds eventually become recoverable with fewer signatures. This sounds great in theory.
I first heard about decaying multisig in a Bitcoin course put on by Anthony Pompliano and Kenny DeGiglio early last year. The course was instructing about miniscript, and mentioned that you could create a decaying multisig wallet using miniscript's time-locking features. It sounded like a neat way to add an extra layer of security and recovery options.
The Tools
Nunchuk creates a nice decaying multisig wallet with three hardware signing devices. The setup wizard walks you through the process smoothly.
Liana also handles this quite nicely with its own approach to time-locked recovery paths.
The Problem: No Interoperability
Here's where things fall apart: the descriptors these wizards build are not interoperable with each other. You can't take a wallet created in Nunchuk and manage it in Liana, or vice versa.
Worse, bringing these descriptors into Sparrow doesn't work either. Sparrow doesn't support decaying multisig with miniscript yet, despite community requests:
My Recommendation
I do not recommend exotic decaying multisig wallet construction at this time, unfortunately. When only proprietary wallet software supports it, it defeats the purpose of sovereign Bitcoin custody. If the one tool that can access your funds disappears or breaks, you're in trouble.
Stick with standard multisig setups that multiple wallets can handle until the ecosystem matures. Generate the multisig descriptors yourself and ensure they are compatible with widely used software. This way, you maintain control and flexibility over your funds without risking lockout. You can easily just examine the address lists, and see if they are the same between different wallet software providers.
Need Help with Your Bitcoin Custody Setup?
Choosing the right multisig configuration for your situation can be tricky. I offer consulting services to help you design a secure, practical custody solution that won't leave you locked out of your own funds. Get in touch to discuss your needs.