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Smart Wallets

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What is a Smart Wallet?

• Is derived deterministically from a Bitcoin signature
• Supports gasless transactions via account abstraction
• Enables session-based authorization for secure operations
• Provides multi-chain support with the same derivation

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How Derivation Works

1. User signs a deterministic message with their Bitcoin wallet
2. The signature is used to derive EVM private keys
3. A smart account address is computed from these keys
4. The same BTC wallet always produces the same smart account

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Signing Message Format

Sign this message to access your SatsTerminal Borrow Account.

Loan Wallet #0

This signature will be used to derive your secure Smart Account keys.

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Multi-Index Architecture

// Platform wallet (index 0) - created during setup()
await sdk.setup();

// Loan wallet (index 1) - created for first loan
await sdk.executeBorrow(firstQuote);

// Loan wallet (index 2) - created for second loan
await sdk.executeBorrow(secondQuote);

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Why Multiple Wallets?

1. Isolation - Each loan’s collateral is isolated
2. Clarity - Clear separation of funds
3. Security - Compromised loan doesn’t affect others
4. Tracking - Easier transaction history per loan

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Signature Caching

// First call - prompts for signature
await sdk.setup(); // User signs message

// Subsequent calls - uses cached signature
await sdk.startNewLoan(); // No prompt if signature cached

@satsterminal/borrow/wallet_0_signature
@satsterminal/borrow/wallet_1_signature

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Clearing Cached Signatures

// Clear all cached signatures
sdk.clearSession();

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Smart Account Features

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Gasless Transactions

• Users don’t need ETH for gas
• Gas is paid by the protocol
• Transactions are bundled efficiently

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Session Keys

const session = await sdk.setup();
console.log('Session valid until:', new Date(session.activeSession.validUntil * 1000));

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Cross-Chain Support

// Same BTC wallet, different chains
const sdkArb = new BorrowSDK({ apiKey, wallet });
const sdkBase = new BorrowSDK({ apiKey, wallet });

// Preload an explicit chain only when you need that chain's account/session context
await sdkArb.setup({ chain: ChainType.ARBITRUM });
await sdkBase.setup();

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Wallet States

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Deployed vs Undeployed

const { userStatus } = await sdk.setup();
console.log('Is deployed:', userStatus.isDeployed);

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Restoring Wallets

// New device - no cached signature
const sdk = new BorrowSDK(config);

// Setup will prompt for signature again
// Same signature = same smart account
await sdk.setup();

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Security Considerations

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Signature Security

• Signatures are stored locally (browser localStorage or provided storage)
• Never transmitted except for initial derivation
• Can be cleared via clearSession()

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Smart Account Security

• Controlled only by the derived keys
• Session keys have limited scope and expiry
• Multi-sig upgrades possible (future)

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Best Practices

1. Clear sessions on logout - Call clearSession() when user disconnects
2. Use secure storage - Provide encrypted storage in production
3. Monitor session expiry - Refresh sessions before they expire
4. Validate addresses - Always verify smart account addresses match expectations