#11
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Staking key chain for HD wallets

Created on  by Sebastien Guillemot,  and Matthias Benkort

Abstract

Starting with the Shelley hardfork, Cardano makes use of both the UTXO model and the account model. To support both transaction models from the same master key, we allocate a new chain for CIP1852

Terminology

Meaning of account

The term "account" is unfortunately an overloaded term so we clarify all its uses here

1) "Account" as a BIP44 derivation level

BIP44 uses the term "account" as one derivation level to mean the following

This level splits the key space into independent user identities, so the wallet never mixes the coins across different accounts. To differentiate this from other usage, we sometimes refer to it as an account' (the bip32 notation) or a BIP44 Account.

2) "Account" as a transaction model

Blockchains like Ethereum does not use the UTXO model and instead uses the Account model for transactions.

Motivation

Generally it's best to only use a cryptographic key for a single purpose, and so it's best to make the staking key be separate from any key used for UTXO addresses.

Specification

Recall that CIP1852 specifies the following derivation path

m / purpose' / coin_type' / account' / chain / address_index

We set chain=2 to indicate the staking key chain. Keys in this chain MUST follow the accounting model for transactions and SHOULD be used for reward addresses

address_index value

We RECOMMEND wallets only use address_index=0 for compatibility with existing software. This also avoids the need for staking key discovery.

Wallets that use multiple staking keys are REQUIRED to use sequential indexing with no gaps. This is to make detection of mangle addresses (addresses where the payment key belongs to the user, but the staking key doesn't) easier.

Note: an observer looking at the blockchain will be able to tell if two staking keys belong to the same user if they are generated from the same wallet with different address_index values because the payment keys inside the base addresses will be the same.

Test vectors

recovery phrase

prevent company field green slot measure chief hero apple task eagle sunset endorse dress seed

private key (including chaincode) for m / 1852' / 1815' / 0' / 2 / 0

b8ab42f1aacbcdb3ae858e3a3df88142b3ed27a2d3f432024e0d943fc1e597442d57545d84c8db2820b11509d944093bc605350e60c533b8886a405bd59eed6dcf356648fe9e9219d83e989c8ff5b5b337e2897b6554c1ab4e636de791fe5427

reward address (with network_id=1)

stake1uy8ykk8dzmeqxm05znz65nhr80m0k3gxnjvdngf8azh6sjc6hyh36

This CIP is licensed under CC-BY-4.0