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HD (Hierarchy for Deterministic) Stake Pool Cold Keys for Cardano

Created on  by Rafael Korbas

Abstract

CIP-1852 establishes how Shelley-era hierarchical deterministic (HD) wallets should derive their keys. This document is a follow-up of this CIP specifying how stake pool cold keys should be derived.

Motivation

(Hierarchical) deterministic derivation of stake pool cold keys enables their restorability from a seed and most importantly, their management on hardware wallet devices. This in turn mitigates man-in-the middle attacks to which pool operators would otherwise be vulnerable if they managed their stake pool cold keys on a device not specifically hardened against alteration of the data to be signed/serialized without operator's explicit consent.

Specification

Using 1853' as the purpose field, we define the following derivation path structure for stake pool cold keys.

m / purpose' / coin_type' / usecase' / cold_key_index'

Example: m / 1853' / 1815' / 0' / 0'

Here the usecase is currently fixed to 0'.

Given that stake pool cold keys are cryptographically the same as wallet keys already covered in CIP-1852, the master node and subsequent child keys derivation MUST be implemented in the same way as specified for wallets in CIP-1852.

Rationale

Why introducing a new purpose?

Stake pools are not wallets and the core concept of "accounts" is not applicable to them, nor are they supposed to be related to a user's wallet in any meaningful way. Therefore treating stake pool cold keys as another "chain" within CIP-1852 specification would rather be a deviation from CIP-1852 than its logical extension. Hence we establish a separate purpose and path structure for stake pool cold keys, having their specifics and differences from standard "wallet" keys in mind.

Why keeping coin_type in the path?

coin_type is kept in order to remain consistent with the "parent" CIP-1852 and also to leave space for the possibility that some Cardano hard-fork/clone in the future would reuse this specification to derive their own stake pool cold keys.

usecase field

Similarly as we have the chain path component in CIP-1852 paths for different types of wallet keys, it's plausible that in the future, there could be multiple varieties of stake pools. One such example of a possible future extension of this CIP could be pools managed by a group of operators instead of a single operator, for which a separate set of stake pool cold keys, driven by this parameter, could make sense both from logical and security perspective.

Hardened derivation at cold_key_index

Each stake pool is supposed to be managed separately so there is currently no incentive to connect them via a parent public key.

Hardened derivation at usecase

We chose hardened derivation at the usecase index as there is no incentive to mix the stake pool cold keys with other potential usecases and if there was such incentive, it would most likely be more appropriate to create a separate usecase/purpose for that.

This CIP is licensed under CC-BY-4.0