The Wallet is Empty After Restoring: Derivation Path Explained

Let's say you've finished restoring your wallet, but it appears completely empty, even though the mnemonic was correct. That's why you have to know about derivation paths. Spoiler alert: your funds are still safe, and you will access them by the end of this guide.

What Is a Derivation Path?

When restoring a wallet, most users expect to enter their recovery phrase and immediately see all of their assets. Usually, that's exactly what happens. Sometimes, however, the wallet appears empty even though the recovery phrase is correct. In many cases, the reason is the derivation path.

A derivation path is a set of instructions that tells a wallet how to generate addresses from a recovery phrase. One recovery phrase can generate many valid wallet addresses. The derivation path determines which ones your wallet displays.

Think of the recovery phrase as a recipe book. The derivation path tells the wallet which recipe to use. The recovery phrase consists of 12 to 24 words and a lot of encryption. To decrypt it, the wallet uses a specific set of rules. Using the wrong recipe doesn't destroy the ingredients, but something different will appear.

Why Do Derivation Paths Matter?

Changing the derivation path does not create a new wallet or move your crypto. It tells Guarda or another wallet where to look for addresses that already belong to your recovery phrase. If the derivation path is “wrong” for your wallet, you’ll see the different set of valid addresses created from the same recovery phrase.

Your cryptocurrency is still on the blockchain. But the wallet did not look for the correct set of addresses.

When Should You Change the Derivation Path?

Most Guarda users never need to change derivation settings. Advanced derivation settings becomes useful to

• restore a wallet created in another application;
• import a Ledger or another hardware wallet;
• recover an older wallet;
• restore a recovery phrase but seeing no expected balances;
• try to locate addresses that don't appear automatically.

If you're creating a new wallet in Guarda, you normally don't need to change anything.

How to Change the Derivation Path in Guarda

Advanced derivation settings are available on Web, Desktop, and Mobile versions of Guarda.

During the wallet creation or recovery/import process:

On Mobile

1. Select the cryptocurrency you want to restore.
2. Open Advanced Import Settings.
3. Choose or enter the required derivation path.
4. Continue importing the wallet as usual.

On Web, Browser Extension, and Desktop

1. Select the cryptocurrency you want to restore.
2. Open Advanced Settings.
3. Choose or enter the required derivation path.
4. Continue importing the wallet as usual.

When the selected derivation path matches the one originally used to create the wallet, Guarda displays the correct addresses and balances.

If you're unsure which derivation path was originally used, contact Guarda Support. We'll help you identify the correct settings as soon as possible.