Fundamentally, a cryptocurrency wallet is simply a very large secret number, called a “private key.” A private key can generate a corresponding “public key” (think of it as the address) that can be attached to a transaction and mathematically signed. Anyone who receives this signed transaction can mathematically verify its signature was made by the same private key that generated the attached public key.
But modern mnenomic phrase and hardware wallets take this idea further. Using a set of carefully designed standards, they can generate an infinite number of public keys, and by extension, addresses, and can even organize the addresses into accounts, all using the same private key. Wallets that conform to these conventions are called "Hierarchical Deterministic" or HD wallets for short.
If you use an HD wallet to store your crypto assets, you will encounter the phrase “derivation path.” Simply put, a derivation path defines a consistent method for generating the same set of accounts and wallets for a given private key even if you switch to another device or wallet provider.
To avoid confusion (e.g., using the same wallet address on multiple cryptocurrency networks), most popular cryptocurrency communities have established a conventional derivation path to be used exclusively by that cryptocurrency network. Some wallet providers have additional constraints, for example, on the Ethereum network, the Ledger and Ledger Live wallets use different derivation paths than the conventional Ethereum derivation path.
Here are some examples of derivation paths:
The number 44 in the derivation path stands for BIP-44, which is one of the foundational Bitcoin Improvement Proposals that defines hierarchical deterministic wallets.
#Derivation path for the Ethereum mainnet network m/44'/60'/0'/0/0 Derivation path for Ledger on the Ethereum mainnet network m'/44'/60'/0' Derivation path for Ledger Live on the Ethereum mainnet network m'/44'/60' # Derivation path for the RSK mainnet network m'/44'/137'/0'/0 # Derivation path for the RSK testnet network m/44'/37310'/0'/0
TLDR: your funds are safu!
Unfortunately, wallet providers do not always include the conventional derivation path for a given cryptocurrency network, or they may provide it via an update after a user has already generated addresses with a different derivation path. For example, Nifty wallets used Ethereum’s derivation path until version 5. And Metamask similarly didn’t offer the option to select a custom derivation path for a custom network until version 8.
Within the Sovryn dapp, a user who moves to another wallet using their mnemonic phrase, or tries to directly connect using a hardware wallet, may be unable to load the same set of addresses they previously used, resulting in fear over loss of funds.
If the above scenario describes your situation, don't panic, your funds are safe. You can download an older version of one of the aforementioned wallets and then use that wallet to connect to Sovryn, or transfer your assets to another address generated with a conventional derivation path.
How big? Big. Probability of Seed Phrase Collision Brute Forcing ↩︎
Although a public key is not actually an address, it is used to generate an address. For more information on how this works for Bitcoin, see Technical background of version 1 Bitcoin addresses
. Other chains have different conventions along the same theme. ↩︎
A string of syntactic words. ↩︎