# Introduction Hello guys! Welcome to the second development update on my journey as an Ethereum Protocol Fellow. In this update, I will provide insights into the progress I've made on two significant projects: [Improving bip32 hdkey (Nested Key Generation)](https://gist.github.com/paulmillr/a3f2c2aa3cbc70d3457685a85621225a) and my exploration of the [FHE-DKSAP (Fully Homomorphic Encryption - Dual Key Stealth Address Protocol)](https://ethresear.ch/t/fhe-dksap-fully-homomorphic-encryption-based-dual-key-stealth-address-protocol/16213) to enhance transaction anonymity. Additionally, I will touch upon my personal interest in learning Nim and my hobbyist exploration of the verkle tree during my fellowship. ## Part 1: Improving Bip32 HDKey (Nested Key Generation) ### 1.1 Understanding the Fundamentals I learnt the fundamentals of BIP32, which explains how master keys and master chain code are created from a BIP39 seed. Here is a rough image of my note showing a diagram of BIP32 Child Key Derivation (CKD) ![](https://hackmd.io/_uploads/B1zvmfmo3.jpg) ### 1.2 Notes and Documentation I have maintained detailed notes throughout this research process, and these notes will be summarized and uploaded later in the week to the [notes](https://github.com/eth-protocol-fellows/cohort-four/tree/master/notes) directory within the cohort-four repository. ### 1.3 Specification for Implementation The next phase for me will be working on crafting a specification for the implementation of the proposed bip32 hd key improvements. This specification will include a technical approach, methodologies, and expected outcomes. ## Part 2: Exploring FHE-DKSAP for Enhanced Transaction Anonymity ### 2.1 In-depth Research on FHE-DKSAP I also read the work of some other fellow (Mason) on Stealth Addresses. His project is titled FHE-DKSAP (Fully Homomorphic Encryption - Dual Key Stealth Address). I understand some of the schemes discussed but I am new to Fully Homomorphic Encryption (FHE). There are lot of keys exposed in this proposal that I am not comfortable with, so I am going to read more on FHE to understand the underlying technology and be certain that it is not compromised. I also believe there is a lot to explore within this project and it's definitely something I would be contributing to. ## Part 3: Identifying Contribution Areas While the Ethereum fellowship offers numerous exciting projects to contribute to, I acknowledge the significance of maintaining focused efforts. For the time being, I intend to concentrate on key aspects of both bip32 hd key improvements and FHE-DKSAP, ensuring meaningful and impactful contributions to both projects. ### 3.1 Learning Nim and Exploring Verkle tree Although my primary focus remains on the 2 projects stated above, I would be learning Nim and exploring Verkle trees more as an hobby. This will help satisfy my curiosity and expand my knowledge. ## Conclusion My dedication lies in making significant contributions to the **improvement of bip32 hd key** and **FHE-DKSAP**.