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README.md

CIP Title Status Category Authors Implementors Discussions Created License
1855
Forging policy keys for HD Wallets
Proposed
Wallets
Samuel Leathers <samuel.leathers@iohk.io>
John Lotoski <john.lotoski@iohk.io>
Michael Bishop <michael.bishop@iohk.io>
David Arnold <david.arnold@iohk.io>
2021-06-02
CC-BY-4.0

Abstract

This document describes how to derive forging policy keys used for minting/burning tokens.

Motivation: why is this CIP necessary?

Forging tokens is derived from a script policy. The script policy includes hashes of keys needed to forge new tokens and must be witnessed by these keys in such a way as the script stipulates. This CIP defines the derivation path at wich parties are expected to derive such keys.

Specification

Term Definition
HD Hierarchical Deterministic, refers to wallets as described in BIP-0032.

HD Derivation

We consider the following HD derivation paths similarly to CIP-1852:

m / purpose' / coin_type' / policy_ix'

To associate policy keys to a wallet, we reserve however purpose=1855' for policy keys for forging tokens. The coin type remains coin_type=1815' to identify Ada as registered in SLIP-0044. We use a hardened index for each policy key as derivation is not needed.

We can summarize the various paths and their respective domain in the following table:

purpose coin_type policy_ix
1855' 1815' [2^31 .. 2^32-1]

CIP-0005 prefixes

To distinguish such keys & derived material in the human readable prefix of the bech32 representation, we introduce the following prefixes for insertion into CIP-0005:

Keys

Prefix Meaning Contents
policy_sk CIP-1855's policy private key Ed25519 private key
policy_vk CIP-1855's policy public key Ed25519 public key

Hashes

Prefix Meaning Contents
policy_vkh CIP-1855's Policy verification key hash blake2b_224 digest of a policy verification key

Examples

  • m/1855’/1815’/0’
  • m/1855’/1815’/1’
  • m/1855’/1815’/2’

Rationale: how does this CIP achieve its goals?

  • ERC20 Converter IOHK is developing needs to keep track of policy keys. Rather than having randomly generated policy keys, a policy key can be associated with a mnemonic which is easier to backup.

  • A 3rd party may want to have multiple tokens tied to same mnemonic, so we allow an index to specify the token.

  • Contrary to CIP 1852, we don't use the role and index levels of the derivation path, since index is expressed at the 3rd level and no roles for policy signing keys are currently anticipated.

  • No prefixes are defined for extended keys, since currently this CIP does not define further derivations.

  • We use a different purpose for mainly two reasons:

    • It prevents mixing up standard wallets with policy keys used for forging.

    • Using a different purpose also fits well the use-case on hardware wallets who can still rely on a single root seed to manage many types of wallets.

Related Work

Description Link
BIP-0032 - HD Wallets https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki
CIP-5 - Common Bech32 Prefixes https://github.com/cardano-foundation/CIPs/tree/master/CIP-0005
CIP-1852 - Cardano HD Wallets https://github.com/cardano-foundation/CIPs/tree/master/CIP-1852
A Formal Specification of the Cardano Ledger https://github.com/input-output-hk/cardano-ledger/releases/latest/download/shelley-ledger.pdf

Path to Active

Acceptance Criteria

  • Standardisation of this derivation path among three wallets as of the Shelley ledger era.

Implementation Plan

  • Common agreement on the above Motivation, Rationale and Specification during the planning of Cardano's Shelley release.

Copyright

This CIP is licensed under CC-BY-4.0.