Keys

Cardano typically makes use of BIP32 HD private keys and software implementations of the protocol follow consistent patterns to construct keys within the system

Payment Keys

• Control spending of ADA
• Used to create Payment Addresses
• Typically derived at HD path of m/1852'/1815'/0'/0/<index>
  • Applications often generate new payment keys when sending and receiving to avoid address re-use as a security best practise

Stake Keys

• Control delegation (choosing a stake pool)
• Own the reward address where staking rewards accumulate
• Have permission to withdraw staking rewards
• When linked to a Payment Address, the balance of said Payment Address is included in the staked balance
• Can be linked with multiple Payment Addresses
• Typically derived at HD path of m/1852'/1815'/0'/2/0
  • Notice that this derivation path is fixed, meaning it is constant for all addresses within a wallet

Addresses

Base Addresses

• Generated from an underlying Payment Key and Stake Key
  • ADA sitting in one of these addresses is counted towards the staked ADA balance (assuming the Stake Key is active and delegated)
• Supports spending and staking
• Most common wallet address type.

Enterprise Address

• Generated from only an underlying Payment Key
  • ADA sitting in one of these addresses does not count towards staking

Reward Address (Stake Address)

• Represents the reward account for staking rewards
• Does not hold regular ADA UTXO's, only rewards which can be withdrawn by spending into UTXO's