Workaround for Hardware Wallet Users in Lisk Desktop v2.1.0
Today, with the release of Lisk Desktop v2.1.0 we are introducing a workaround to access LSK tokens on both Ledger and Trezor hardware wallets which were stuck so far. This blog post describes the workaround implemented in Lisk Desktop v2.1.0.
On the 21st of August we migrated the Lisk Mainnet to v3 which introduced numerous improvements to Lisk, such as multisignature accounts, a new address system, a new DPoS consensus algorithm or a dynamic fee system.
In order to meet internal deadlines we had to focus our development resources on delivering these new improvements. This resulted in Lisk Desktop v2.0.0 which supports all improvements introduced by Lisk v3. However, we also had to make the compromise to temporarily discontinue the Ledger and Trezor hardware wallet support.
We have taken your feedback very seriously and put a high priority on reinstating hardware wallet support in Lisk Desktop. Therefore, with Lisk Desktop v2.2.0 we are working towards adding the full support back in for Ledger hardware wallets, while Trezor hardware wallet support is still pending with an expected release early next year. Here we are collaborating closely with the hardware wallet manufacturers and our dear community member Hirish.
What is a Hardware Wallet?
A hardware wallet is a physical device which encrypts and stores your private keys to access various crypto assets. Due to your private keys not having to be stored directly on your computer, hardware wallets have the advantage of providing an extra layer of protection against malware and other forms of cyber attacks. That’s why they grew in popularity and in recent years became a standard to access crypto assets securely and safely.
The Workaround Explained
With Lisk Desktop v2.1.0, we are very happy to provide an option to users who urgently need to access their LSK tokens.
The workaround involves inserting your recovery passphrase (also called seed phrase or recovery seed, consisting of 12-24 words) from your Ledger or Trezor hardware wallet directly into Lisk Desktop. By setting a new custom derivation path on the sign-in page this grants access to your LSK tokens.
Here we have to highlight that it’s generally not recommended to insert your recovery passphrase from the hardware wallets anywhere outside of your hardware wallets - ever! That’s why this is labeled as a workaround and we recommend for those who don’t need to urgently access their LSK tokens to wait for a later Lisk Desktop version.
What is the Derivation Path?
Your account address is determined from your passphrase, this involves a specific cryptographic algorithm. To learn more about that please read our research blog post about our new Lisk ID system. Part of this algorithm is the derivation path which can be distinct for different wallet providers.
A derivation path may look like this:
Lisk Desktop v2.1.0 now allows the user to set a derivation path to access their LSK tokens on Ledger and Trezor hardware wallets.
How to Use the New Derivation Path Feature
Lisk Desktop v2.1.0 now allows the user to set a custom derivation path to access their LSK tokens on Ledger and Trezor hardware wallets right on the sign-in page. For that you have to tick the box "Enable recovery phrase mode (optional)". If you are required to customize your derivation path you also have to tick the box "Modify derivation path (optional)". Please see the screenshot below.
For the majority of users the derivation path should be the default choice given in Lisk Desktop (as above), if this is not the case please head to Lisk.chat to receive further support.
The only thing you now need to do is to type in your hardware wallet recovery passphrase into the fields and press on "Sign in". In case your recovery passphrase is longer than 12 words simply press space after the 12th words and another 12 fields will appear.
Is this a Permanent Solution?
No. This is a temporary solution designed to enable users to access their funds in cases where they urgently require to do so. We are working towards adding the full support back in for Ledger hardware wallets in Lisk Desktop v2.2.0, with Trezor support still pending with an expected release early next year. Here we are collaborating closely with the hardware wallet manufacturers and our dear community member Hirish.
The recovery phrase and the derived private keys holding your crypto are stored on the hardware wallet and should generally never be entered into an internet-connected device, but only be backed up offline, e.g. on paper. The reason is that an internet-connected device may be compromised with malware and entering your recovery phrase on such a device can result in the loss of your funds.
In order to bridge the time until Lisk Desktop supports hardware wallets again, we now support entering your recovery phrase and entering the custom derivation path used by hardware wallet vendors. Please be aware that entering your recovery phrase is generally not recommended, as stated above, and this may put your funds at risk in case your computer is compromised.
Note that in case you store multiple different cryptocurrencies on your hardware wallet and cannot guarantee the security of your computer, we would advise you to move all funds except LSK tokens to a different address generated from a hardware wallet with a different recovery phrase before entering your recovery phrase into Lisk Desktop. This ensures that these funds are not at risk in case your computer is compromised.