Yubikey Cardano Wallet

[Proposal setup] Proposal title

Please provide your proposal title

Yubikey Cardano Wallet

[Proposal Summary] Budget Information

Enter the amount of funding you are requesting in ADA

15000

[Proposal Summary] Time

Please specify how many months you expect your project to last

3

[Proposal Summary] Translation Information

Please indicate if your proposal has been auto-translated

No

Original Language

en

[Proposal Summary] Problem Statement

What is the problem you want to solve?

Cardano users must choose between costly, less convenient hardware wallets or less secure software wallets. YubiKey offers a secure, portable, affordable alternative.

[Proposal Summary] Supporting Documentation

Supporting links

• https://docs.yubico.com/hardware/yubikey/yk-tech-manual/5.7-firmware-specifics.html#piv-enhancements
,
• https://github.com/akonior/yubikey-cardano-wallet

[Proposal Summary] Project Dependencies

Does your project have any dependencies on other organizations, technical or otherwise?

No

Describe any dependencies or write 'No dependencies'

No dependencies

[Proposal Summary] Project Open Source

Will your project's outputs be fully open source?

Yes

License and Additional Information

The project already has a working proof of concept https://github.com/akonior/yubikey-cardano-wallet with a prototype that successfully executed a test transaction on the Cardano Preview network (Happy Path). The full code will be released on GitHub under the Apache 2.0 license, accompanied by complete documentation and step-by-step tutorials so developers can set up and use the library with minimal effort.

[Theme Selection] Theme

Please choose the most relevant theme and tag related to the outcomes of your proposal

Authentication

[Campaign Category] Category Questions

Mention your open source license and describe your open source license rationale.

License: Apache License 2.0

I chose Apache 2.0 because it is a widely adopted, permissive license that encourages community contributions and broad adoption. It allows both open-source and commercial use without copyleft restrictions, while providing clear terms, attribution requirements, and an explicit patent grant to protect developers and users. This makes it ideal for tools and SDKs intended to integrate widely across the Cardano ecosystem. Apache 2.0 is also a popular license in blockchain projects, including within the Cardano ecosystem, which makes it a natural fit for this project.

How do you make sure your source code is accessible to the public from project start, and people are informed?

• The project repository will be created on GitHub and made public from the start.
• Development will follow a “small steps” approach with regular commits.
• I usually work in small chunks, making 1–2 pull requests per day.
• Project updates, discussions, progress notes, and milestones will be shared openly on Github.
• A short tutorial and demo will be published on YouTube.

How will you provide high quality documentation?

• A clear and structured README in the main repository with a quick start guide.
• A dedicated /docs folder with detailed documentation for each component.
• A YouTube demo and tutorial to showcase usage and simplify onboarding.

[Your Project and Solution] Solution

Please describe your proposed solution and how it addresses the problem

Current Context

• With the recent YubiKey firmware update (v5.7), native EdDSA support was introduced in the PIV module, matching the signature scheme used by Cardano https://docs.yubico.com/hardware/yubikey/yk-tech-manual/5.7-firmware-specifics.html#piv-enhancements
• A working proof-of-concept has already demonstrated that YubiKey can successfully sign Cardano transactions using EdDSA. Here is a transaction singned by YubiKey https://preview.cardanoscan.io/transaction/52415277f3beca2acd3efcc4b0af327469b49deee06596990971e4f2a6208107
• YubiKey Nano offers a unique balance of convenience and security: it can remain permanently connected while still requiring a physical touch for each signature.

Proposed Solution

Develop a lightweight Command Line Tool (in Rust or Python) that enables:

• Generating and importing EdDSA keys into YubiKey.
• Preparing and hashing Cardano transactions.
• Sending transaction hashes to YubiKey for signing.
• Assembling the final signed transaction, ready for submission to the Cardano network.

[Your Project and Solution] Impact

Please define the positive impact your project will have on the wider Cardano community

This project expands the security options for managing private keys in Cardano. Today, users must choose between fully featured but less convenient hardware wallets (Ledger, Trezor) or less secure software wallets. By introducing YubiKey as a third option, the project creates a secure and convenient middle ground: private keys are stored in the YubiKey’s secure enclave, while signing requires a physical touch and PIN entry. This improves accessibility, lowers the entry barrier for secure key management, and empowers the community with greater flexibility and choice in how they protect their assets.

[Your Project and Solution] Capabilities & Feasibility

What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

I have a long history of working on open-source projects with active contributions on GitHub https://github.com/akonior. My capability is demonstrated by co-developing the https://github.com/vlayer-xyz/vlayer framework, a production-level blockchain tool, as well as https://github.com/zkworks-xyz/Quetzal, a zero-knowledge wallet using WebAuthn with Apple Touch ID and Face ID. The feasibility of this proposal is further validated by an existing working prototype https://github.com/akonior/yubikey-cardano-wallet that already signs Cardano transactions with YubiKey https://preview.cardanoscan.io/transaction/52415277f3beca2acd3efcc4b0af327469b49deee06596990971e4f2a6208107

[Milestones] Project Milestones

Milestone Title

Research & Design

Milestone Outputs

• Research YubiKey PIV EDDSA capabilities (incl. PIN, Touch Policy).
• Explore feasibility of OpenPGP/APDU signing.
• Report on PIV features and documentation.
• Initial PoC for signing raw bytes with YubiKey.

Acceptance Criteria

• A detailed documentation report has been prepared, covering research findings and usage instructions.
• Successful signing with YubiKey EDDSA has been demonstrated on raw data, validating the feasibility of secure Cardano transaction signing.

Evidence of Completion

• Report has been published in the project repository (docs/), including detailed explanations
• Demo code / PoC scripts are provided to showcase functionality and verify feasibility.

Delivery Month

1

Cost

5000

Progress

30 %

Milestone Title

CLI Implementation

Milestone Outputs

Develop Command Line Tool for key management:

• Import/generate EDDSA keys on YubiKey.
• Configure PIN / Touch Policy.
• Support key import (raw private key, BIP-32 seed)
• Unit tests + developer documentation.

Acceptance Criteria

• The CLI tool is capable of generating, importing, and listing keys stored on a YubiKey.
• Both PIN authentication and Touch Policy have been successfully configured and verified, confirming secure operation.

Evidence of Completion

• The CLI tool has been released on GitHub
• A complete test suite included, along with clear setup instructions and usage guidelines for developers and users.

Delivery Month

2

Cost

5000

Progress

60 %

Milestone Title

Cardano Transaction Signing

Milestone Outputs

• Implement transaction hashing (Blake2b) in CLI.
• Sign Cardano transaction hashes with YubiKey.
• Return fully signed transaction (ready for submission).
• Optional: investigate pycardano integration.
• Final documentation, tutorial (YouTube), and full test coverage.

Acceptance Criteria

• The CLI successfully signs Cardano transactions, producing valid, broadcastable outputs.
• Comprehensive documentation and tutorials are provided to ensure easy adoption and integration by the community.

Evidence of Completion

• Signed transaction verified on Cardano Preview/Testnet/Mainnet.
• Docs/tutorials published in GitHub repo and YouTube.

Delivery Month

3

Cost

5000

Progress

100 %

[Final Pitch] Budget & Costs

Please provide a cost breakdown of the proposed work and resources

I plan to work on this project over a period of three months. The scope includes not only development but also research of YubiKey capabilities, documentation review, and testing of low-level options such as OpenPGP via APDU commands. Work will cover implementation, integration, testing, and full documentation. The requested budget is 5,000 ADA per month for 3 months (total: 15,000 ADA).

[Final Pitch] Value for Money

How does the cost of the project represent value for the Cardano ecosystem?

This project extends key management options in the Cardano ecosystem by enabling YubiKey, a widely adopted and affordable device, to serve as a secure hardware wallet. Many users already own YubiKeys, so this solution increases security and accessibility without requiring the purchase of additional hardware. It also provides existing YubiKey owners with a new, meaningful use case, delivering high value at a relatively low cost.

[Required Acknowledgements] Consent & Confirmation

Terms and Conditions:

Yes