The term 3-of-3 refers to a specific type of multisignature wallet configuration. In this setup, three private keys are created, and all three keys must be used to authorize a transaction. This approach enhances security by requiring consensus among multiple parties before any funds can be moved.For instance, a company might generate a 3-of-3 wallet where one key is held by each executive. Every executive must approve and sign a transaction for it to be executed. This prevents any single individual from having full control over the funds, reducing the risk of fraud or misappropriation.While 3-of-3 setups offer strong security, they can also lead to complications. If one party is unavailable, it can be impossible to access the funds or complete transactions. Therefore, this arrangement is often used in situations where highest security is paramount and where all involved parties are consistently available.