# Hierarchical keys

BIP-0044 defines a logical hierarchy for deterministic wallets. This is a common standard that is used directly (or used as inspiration) by countless projects in the cryptocurrency sphere.

Such a standard allows end users to move between different wallet software trivially, and thus sets down a framework for a more cohesive ecosystem to grow.

The standard has 5 levels part of its path:

m / 44' / coin_type' / account' / change / address_index


EIP-0003: Deterministic Wallet Standard attempts to define a specific coin_type for the Ergo ecosystem, as well as a policy for how wallets use the change level.

## Coin Type

Registered coin_types can be found in SLIP-0044

We will be using the word ergo summed based on the numerical values of the ASCII characters for the coin_type. As shown below, this means that our coin_type is 429.

101 + 114 + 103 + 111 = 429

Thus our path will look as such:

m / 44' / 429' / account' / change / address_index


And the first default key pair for an Ergo wallet will be:

m / 44' / 429' / 0' / 0 / 0


## Change

In BIP-44 the constant 0 is used for the external addresses and constant 1 for internal addresses (aka change addresses).

For EIP-3, we instead do not use constant 1 at all. Thus we do not support internal/change addresses, but only external addresses.

As such all wallets supporting EIP-3 should have any change within a transaction go back to the address using constant 0.

This decision was made to simplify the experience for end-users and solidify a cohesive standard for wallets to target in the Ergo ecosystem. A full-blown privacy-preserving mixer is already available within the ecosystem, ErgoMix, and thus the pseudo-anonymity provided by internal addresses is not particularly vital.

That said, in the future new wallets are more than welcome to create a new EIP for wallets that may wish to support internal addresses as well as an alternate standard (if valuable use cases arise).

Ergo node uses a secret root key (derived from seed) for the change address. After switching to EIP-3, supported by CoinBarn and Yoroi around that time, the node switched to the same change address as in the wallets, thus deriving an address corresponding to m/44’/429’/0’/0/0. (originally m/1/2)

Navigate to localhost:9053/swagger#/wallet/walletDeriveKey
"derivationPath": "m/44'/429'/0'/0/0"