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PIP-41: Address Recovery

Recovering Addresses after Wallet Recovery

Authors	Pactus Development Team [info@pactus.org]
Discussion	View Discussion PIP-41
Category	Core
Created	2025-03-22

Abstract #

This proposal enables automatic recovery of used addresses when restoring a wallet from a mnemonic phrase.

Motivation #

Problem #

Right now, when a wallet is recovered using a mnemonic phrase, it cannot automatically restore all previously used or balance-holding addresses. Users must manually create addresses, which is not efficient. This can also cause problems, especially if there is a gap in address usage.

Solution #

This proposal suggests recovering addresses that have activity on the blockchain. An address is considered active if it is indexed in the blockchain database; otherwise, it is considered inactive or empty. Account activity can be determined using the GetAccount API.

Specification #

When recovering a wallet from an external source (e.g., mnemonic phrase), the software should follow these steps:

1. Set recovered_count = 1.
2. Set inactive_count = 0.
3. Derive the first address.
4. Loop:
   • Check if the address’s public key is indexed in the blockchain.
   • If indexed (active):
     • Add inactive_count to recovered_count.
     • Reset inactive_count = 1.
   • If not indexed (inactive):
     • Increase inactive_count by 1.
     • If inactive_count > 8, break the loop.
   • Derive the next address.

After finding all recoverable addresses, the software should recover all addresses up to the total number of recovered addresses.

Limitation #

Users cannot automatically recover a used address if it is separated by more than 8 inactive or empty addresses. In this case, the user needs to manually create addresses until they reach the desired one.

Backward Compatibility #

This change is backward-compatible.

Reference #

BIP-44: Multi-Account Hierarchy for Deterministic Wallets - Account Discovery

Copyright

Copyright and related rights waived via CC0.