Add ERC: HD wallet In Treasury Management

[elizabethxiaoyu]

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[eip-review-bot]

File ERCS/erc-7908.md

Requires 1 more reviewers from @g11tech, @SamWilsn, @xinbenlv

[elizabethxiaoyu]

Discuss To：https://ethereum-magicians.org/t/new-erc-deterministic-account-hierarchy-in-treasury-management/23073
Look forward to your comments~

[bomanaps]

The current calculation method in this proposal is (89-90):

entity_hash = sha256(f"ENTITY:{entity}".encode()).digest()  
entity_index = (int.from_bytes(entity_hash[:4], "big") % 2**31) + 2**31

Some problems to this:

Range Limitation: looking at line 104 it states indices must be in the range [2^31, 2^32-1] for hardened derivation, the modulo operation unnecessarily restricts the possible values, reducing entropy.
Entropy Loss: Taking the modulo of the hash value with 2^31 means we're only using approximately 30 bits of entropy from the original 32 bits (4 bytes), potentially increasing collision risk.
Implementation Inconsistency: The code example uses % 2^31 which in Python would be interpreted as a bitwise XOR operation rather than exponentiation (should be % 2**31)?

[elizabethxiaoyu]

Thank you for your comments, I have optimized logic in the last pr: remain 32 bits to decrease collision risk and modify typo

[bomanaps]

What happens if the parent public key is compromised?

[elizabethxiaoyu]

The design of unreinforced derivation makes it possible for the parent private key to be derived once both of the following conditions are met:

1. The parent public key (xpub) and chain code are known (xpub is public).
2. A child private key is leaked.
   but convenience and risk need to balance~ and risk notify has been added in chapter "Security Considerations"

[bomanaps]

Suggested change

	This proposal aims to provide a standardized method for on-chain treasury management of institutional assets, ensuring
	secure private key generation, hierarchical management, and departmental permission isolation while supporting asset
	security and transaction efficiency in multi-chain environments. By defining a unified derivation path and security
	mechanisms, this proposal offers an efficient and secure solution for treasury management.
	This proposal aims to provide a standardized method for on-chain treasury management of institutional assets, ensuring secure private key generation, hierarchical management, and departmental permission isolation while supporting asset security and transaction efficiency in multi-chain environments. By defining a unified derivation path and security mechanisms, this proposal offers an efficient and secure solution for treasury management.

[elizabethxiaoyu]

updated

[bomanaps]

Suggested change

	With the rapid development of blockchain and DeFi, secure management of on-chain assets has become critical. Traditional
	private key management struggles to meet the security demands of large organizations in complex scenarios, where
	hierarchical key management, permission controls, and multi-signature mechanisms are essential. This proposal provides a
	standardized solution for institutional treasury management, ensuring asset security and transaction efficiency.
	With the rapid development of blockchain and DeFi, secure management of on-chain assets has become critical. Traditional private key management struggles to meet the security demands of large organizations in complex scenarios, where hierarchical key management, permission controls, and multi-signature mechanisms are essential. This proposal provides a standardized solution for institutional treasury management, ensuring asset security and transaction efficiency.

[elizabethxiaoyu]

updated

[bomanaps]

Suggested change

	For treasury managers, hierarchical deterministic wallet management is more convenient, but it requires additional
	consideration of protective measures for the master key, such as schemes for splitting and storing mnemonic phrases or
	master keys.
	For treasury managers, hierarchical deterministic wallet management is more convenient, but it requires additional consideration of protective measures for the master key, such as schemes for splitting and storing mnemonic phrases or master keys.

[elizabethxiaoyu]

updated

[elizabethxiaoyu]

@eip-review-bot can scan again?

[github-actions]

The commit cf60b35 (as a parent of 7f90365) contains errors.
Please inspect the Run Summary for details.

[elizabethxiaoyu]

@eip-review-bot @g11tech @SamWilsn @xinbenlv , could you kindly review this pull request? All checks have been successfully completed. Thank you!

[SamWilsn]

Friendly reminder to keep technical discussion on the discussion thread and not on the pull requests. Discussions here should only be for formatting and editorial comments. It's too easy to lose context across pull requests otherwise.

[elizabethxiaoyu]

Friendly reminder to keep technical discussion on the discussion thread and not on the pull requests. Discussions here should only be for formatting and editorial comments. It's too easy to lose context across pull requests otherwise.

Hi,SamWilsn @SamWilsn , can kindly help to pass merge request? I have already passed all auto checks. Thank you very much~