derive_key · Tenzro Ledger MCP: Risk & Policy

WHAT IT DOES

What derive_key does on Tenzro Ledger MCP

AI agents invoke derive_key to trigger actions in Tenzro Ledger MCP. What it does depends on the arguments the agent supplies, and its effects often reach beyond the immediate call — builds kicked off, notifications sent, workflows started.

WHY IT NEEDS A POLICY

Why derive_key needs a policy

Key derivation is a cryptographic operation that generates new key material from a seed. It is not a simple read (it produces new derived keys), not a write in the traditional sense, but an execution of a cryptographic process. Misuse could expose or generate cryptographic keys used for signing, authentication, or financial operations in this wallet/payments/staking context, making the blast radius high.

From the tool's definition 'Derive a child key from a seed using the given derivation path'

Attacks that exploit this kind of access

Recommended rule Ready

Verdict

derive_key Rate-limited

derive_key stays usable, but rate-capped — a runaway agent can't fire it dozens of times a minute. Everything else on the server is denied unless you say otherwise.

View as policy code

policy.json

{
  "version": "1",
  "default": "deny",
  "tools": {
    "derive_key": {
      "limits": [
        {
          "counter": "derive_key_rate",
          "window": "minute",
          "max": 10,
          "scope": "grant"
        }
      ]
    }
  }
}

RATE-LIMIT THIS TOOL →

Instant setup, no code required.

PolicyLayer is an MCP gateway: every tool call is checked against your rule before it reaches Tenzro Ledger MCP, so you can run agents against it safely.

FAQ

Questions about derive_key

What does the derive_key tool do? +

Derive a child key from a seed using the given derivation path. It is categorised as a Execute tool in the Tenzro Ledger MCP MCP Server, which means it can trigger actions or run processes. Use rate limits and argument validation.

How do I enforce a policy on derive_key? +

Register the Tenzro Ledger MCP server in PolicyLayer and add a rule for derive_key: allow, deny, rate-limit, or require approval. Point your MCP client at the PolicyLayer proxy URL and the rule is enforced on every call, before it reaches Tenzro Ledger MCP. Nothing to install.

What risk level is derive_key? +

derive_key is a Execute tool with high risk. Execute tools should be rate-limited and have argument validation enabled.

Can I rate-limit derive_key? +

Yes. Add a rate_limit block to the derive_key rule in your PolicyLayer policy. For example, setting max: 10 and window: 60 limits the tool to 10 calls per minute. Rate limits are tracked per agent session and reset automatically.

How do I block derive_key completely? +

Set action: deny in the PolicyLayer policy for derive_key. The AI agent will receive a policy violation error and cannot call the tool. You can also include a reason field to explain why the tool is blocked.

What MCP server provides derive_key? +

derive_key is provided by the Tenzro Ledger MCP server (https://canton-mcp.tenzro.network/mcp). PolicyLayer sits as a proxy in front of this server to enforce policies before tool calls reach the server.