alknet/docs/architecture/crates/vault/mnemonic-derivation.md

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Mnemonic and Key Derivation

BIP39 mnemonic generation, SLIP-0010 Ed25519 HD key derivation, BIP-0032 secp256k1 derivation (feature-gated), and the derivation path constants that alknet uses.

What

The vault derives keys from a single root: a BIP39 mnemonic. From one mnemonic, all self-generated secrets are derived on demand via hierarchical deterministic (HD) derivation. This is the same model as cryptocurrency wallets — one seed phrase, many derived keys.

Two derivation schemes are supported:

Scheme	Curve	Standard	Paths	Feature
SLIP-0010	Ed25519	HMAC-SHA512 with "ed25519 seed"	Hardened only	default
BIP-0032	secp256k1	HMAC-SHA512 with "Bitcoin seed"	Hardened + unhardened	secp256k1

Ed25519 is the default — it's what alknet's TLS identity (ADR-010), SSH host keys, and signing keys use. secp256k1 is feature-gated for Ethereum signing (the standard Ethereum path m/44'/60'/0'/0/0 requires unhardened indices, which SLIP-0010 cannot handle).

Why HD Derivation

HD derivation lets one seed produce an unlimited number of keys at deterministic paths. This means:

• No key storage: keys are derived on demand, not stored. The vault caches derived keys for performance, but the cache is rebuildable from the seed.
• Reproducible across nodes: the same mnemonic on a different node produces the same keys. A backup node derives the same identity key.
• Domain separation: different paths produce different keys. The identity key, SSH host key, encryption key, and signing keys are all cryptographically independent despite coming from one seed.
• Auditable derivation: the path records what a key is for. m/74'/0'/0'/0' is the identity key; m/74'/0'/1'/0' is the SSH host key. The path is the documentation.

BIP39 Mnemonic

The root of trust is a BIP39 mnemonic seed phrase. The vault generates, validates, and derives seeds from mnemonics.

pub struct Mnemonic {
    phrase: String,  // zeroized on drop
}

impl Mnemonic {
    pub fn generate(word_count: usize) -> Result<Self, MnemonicError>;
    pub fn from_phrase(phrase: &str, language: Language) -> Result<Self, MnemonicError>;
    pub fn to_seed(&self, passphrase: Option<&str>) -> Seed;
    pub fn phrase(&self) -> &str;
}

• generate(word_count): Generate a new random mnemonic. Supported word counts: 12, 15, 18, 21, 24. The mnemonic is the root of trust — store it securely.
• from_phrase(phrase, language): Restore from an existing phrase. Validates against the BIP39 word list and checksum.
• to_seed(passphrase): Derive the 64-byte master seed. The passphrase is the optional BIP39 password extension (the "25th word"). Different passphrases produce different seeds.
• phrase(): Return the phrase string. Handle with care — this is the root of trust.

Mnemonic implements Zeroize and Drop — the phrase is zeroized before deallocation. Only English is supported (matching the BIP39 reference and the majority of wallet software).

Seed

#[derive(Clone, Zeroize)]
#[zeroize(drop)]
pub struct Seed {
    bytes: Vec<u8>,  // 64 bytes, zeroized on drop
}

The 64-byte seed from which all HD keys are derived. Zeroized on drop. This is the input to SLIP-0010 / BIP-0032 master key derivation.

SLIP-0010 Ed25519 Derivation

The default derivation scheme. SLIP-0010 specifies Ed25519 HD key derivation using HMAC-SHA512 with the key "ed25519 seed".

pub fn derive_path_from_seed(seed: &[u8], path: &str) -> Result<ExtendedPrivKey, DerivationError>;

Master key derivation

The master key is derived from the seed via HMAC-SHA512:

HMAC-SHA512(key = "ed25519 seed", data = seed)
  → first 32 bytes: private key (kL)
  → next 32 bytes: chain code

The ed25519-bip32 crate handles the extended key format (kL || kR || chain code). The vault extracts the first 32 bytes as the private key and the public key (32 bytes) via XPrv::public().

Child derivation

SLIP-0010 Ed25519 supports hardened child derivation only. Every child index must have the ' (or h) suffix, meaning index + 0x80000000. Unhardened indices are rejected by the derivation logic (Ed25519 cannot support them because public key derivation is not possible without the private key).

Path parsing

pub fn parse_derivation_path(path: &str) -> Result<Vec<u32>, DerivationError>;

Parses paths like m/74'/0'/0'/0' into child indices. The m prefix is required. Hardened indices have ' or h suffix; unhardened indices are allowed in the parser (for BIP-0032 paths) but Ed25519 derivation will fail on them.

ExtendedPrivKey

#[derive(Clone, Zeroize)]
#[zeroize(drop)]
pub struct ExtendedPrivKey {
    private_key: Vec<u8>,   // 32 bytes
    public_key: Vec<u8>,    // 32 bytes
    chain_code: Vec<u8>,    // 32 bytes
    path: String,           // the path that produced this key
}

The result of SLIP-0010 derivation. Zeroized on drop. Accessors return slices — the caller copies what it needs.

BIP-0032 secp256k1 Derivation (Ethereum)

Feature-gated behind secp256k1. Implements BIP-0032 HD key derivation for the secp256k1 curve, used for Ethereum signing keys.

#[cfg(feature = "secp256k1")]
pub fn derive_secp256k1_path(seed: &[u8], path: &str) -> Result<Secp256k1ExtendedPrivKey, DerivationError>;

Unlike SLIP-0010 (Ed25519), BIP-0032 supports both hardened and unhardened child derivation. The standard Ethereum path m/44'/60'/0'/0/0 uses unhardened indices for the last two levels.

Why a separate module

SLIP-0010 and BIP-0032 differ in:

Aspect	SLIP-0010 (Ed25519)	BIP-0032 (secp256k1)
HMAC key	"ed25519 seed"	"Bitcoin seed"
Child derivation	Hardened only	Hardened + unhardened
Public key size	32 bytes	33 bytes (compressed)
Public derivation	Not possible	Possible (unhardened)

The secp256k1 crate is a heavy dependency (it includes a C library for curve operations). Feature-gating it keeps the default vault lightweight — nodes that don't need Ethereum signing don't pay the cost.

When the feature is disabled, derive_ethereum_key returns VaultServiceError::UnsupportedKeyType.

Derivation Paths

alknet reserves the 74' coin type (unallocated per SLIP-0044) for its keys. Well-known paths are constants in the PATHS module:

pub mod PATHS {
    pub const IDENTITY: &str = "m/74'/0'/0'/0'";       // Primary identity keypair
    pub const DEVICE_PREFIX: &str = "m/74'/0'/0'";      // Worker/device identity prefix
    pub const SSH_HOST: &str = "m/74'/0'/1'/0'";        // SSH host key
    pub const ENCRYPTION: &str = "m/74'/2'/0'/0'";     // AES-256-GCM encryption key
    pub const ETHEREUM: &str = "m/44'/60'/0'/0/0";     // Ethereum signing key (secp256k1)
}

Helper functions construct parameterized paths:

pub fn device_path(index: u32) -> String;           // m/74'/0'/0'/{index}'
pub fn site_password_path(site_hash: &str) -> String; // m/74'/1'/0'/{site_hash}'

Path semantics

Path	Purpose	Key type	Used by
m/74'/0'/0'/0'	Primary node identity (Ed25519)	Ed25519	TLS raw key (ADR-010), node identity
m/74'/0'/0'/{n}'	Worker/device identity	Ed25519	Multi-device nodes, workers
m/74'/0'/1'/0'	SSH host key	Ed25519	SSH handler
m/74'/1'/0'/{hash}'	Site-specific deterministic password	Ed25519 bytes	Per-site passwords (not cached)
m/74'/2'/0'/0'	Encryption key for external credentials	AES-256-GCM	Credential encryption (see encryption.md)
m/44'/60'/0'/0/0	Ethereum signing key	secp256k1	Ethereum signing (feature-gated)

Path namespace discipline

The 74' coin type is alknet's namespace. Sub-paths follow a convention:

Account (/X')	Purpose
0'	Identity keys (node, devices, SSH)
1'	Deterministic passwords
2'	Encryption keys (external credentials)

New key purposes should allocate a new account index, not reuse an existing one. This prevents cross-purpose key collisions.

The 74' coin type is a one-way door

The 74' coin type is committed — once keys are derived at m/74'/..., changing the coin type breaks every existing key. Every node's identity, SSH host key, and encryption key is derived at a 74'-rooted path. This is effectively a one-way door per ADR-009: reversal requires re-deriving every key from the seed at a new coin type and re-deploying all nodes. The reservation is documented inline rather than in a separate ADR because it is a single, self-evident commitment (the coin type is the alknet namespace; there is no alternative to evaluate). The SLIP-0044 registry lists 74' as unallocated, so there is no collision risk with other projects.

Key Types

#[derive(Debug, Clone, Serialize, Deserialize, PartialEq, Eq)]
pub enum KeyType {
    Ed25519,      // SLIP-0010 derivation
    Aes256Gcm,    // Symmetric key (derived from seed, used for encryption)
    Secp256k1,    // BIP-0032 derivation (Ethereum, feature-gated)
}

KeyType tags DerivedKey (see protocol.md) and CachedKey (see service.md) so consumers know what they received without inspecting byte lengths.

Determinism

Derivation is deterministic: the same mnemonic + passphrase + path always produces the same key. This is verified by regression tests in tests/test_vectors.rs against the BIP39 "abandon...about" test vector.

Passphrase sensitivity

Different passphrases produce different seeds and therefore different keys. The passphrase is a legitimate access-control mechanism: two operators with the same mnemonic but different passphrases get different keysets. The vault does not enforce a passphrase policy — that's an assembly-layer concern.

Design Decisions

Decision	ADR	Summary
Vault is standalone	ADR-018	Zero alknet crate dependencies
HD derivation (not stored keys)	—	One seed, many keys, no key storage
74' coin type reserved for alknet	—	SLIP-0044 unallocated; alknet namespace
secp256k1 feature-gated	—	Heavy dep; only needed for Ethereum
Hardened-only for Ed25519	SLIP-0010	Ed25519 cannot do public derivation

Open Questions

See open-questions.md for full details.

• OQ-20 (resolved by ADR-020): Encryption key derivation — HD derivation from seed, not PBKDF2. The salt field is unused in v2. See encryption.md.

References

• BIP39 — mnemonic seed phrases
• SLIP-0010 — Ed25519 HD derivation
• BIP-0032 — secp256k1 HD derivation
• SLIP-0044 — registered coin types (74' is unallocated)
• Implementation: crates/alknet-vault/src/mnemonic.rs, crates/alknet-vault/src/derivation.rs, crates/alknet-vault/src/ethereum.rs
• Test vectors: crates/alknet-vault/tests/test_vectors.rs