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When you install any browser extension, you are granting it access to parts of your browsing environment. The Rabby wallet extension requests specific permissions to function as a non-custodial Web3 wallet—but those same permissions can feel opaque to users who are understandably cautious about what an application can see or control. Understanding why each permission exists, what it actually enables, and how to verify that the extension respects its bounds is essential for making an informed decision about adopting the tool for managing your cryptocurrency and digital assets.

Rabby does not hold your private keys on remote servers, which means you retain full control of your funds. However, that client-side architecture requires certain read and write access to your browser environment so the wallet can detect transactions, display your balances, and request your approval before signing anything. The distinction between what a permission appears to allow and what it actually does in practice is sharper than many users realize. A permission to read web page content, for instance, does not automatically grant access to your passwords or browsing history; it means the extension can analyze the page you are currently viewing to detect Web3 interactions.

What the rabby wallet extension permission model actually controls

Browser extension permissions are declared in a manifest file and enforced by the browser itself, not by the extension developer alone. When you install a Rabby wallet extension, you see a list of requested permissions that varies slightly by browser but generally includes access to tabs, active tab content, scripting capabilities, and storage. Each permission is narrower and more specific than many users assume. “Access to your data on all websites” does not mean the extension can read your email or bank passwords; it means the extension can analyze the DOM (document object model) of any web page to detect dApp interactions, contract interactions, and transaction requests.

The Rabby wallet extension needs to see what you are doing on Web3 sites because that is where transaction requests originate. When you interact with a decentralized application built on Ethereum, Polygon, Arbitrum, Avalanche, Fantom, or another EVM-compatible blockchain, the dApp sends a request to your wallet to sign a transaction or approve a smart contract. Without permission to read page content, the extension would have no way to know that a transaction request was pending. The extension must also be able to inject its own code into the page so it can intercept those requests and show you a signing preview—a critical security feature that prevents you from approving transactions you do not understand.

Storage permissions, by contrast, allow the wallet to save your encrypted private key material and preferences locally on your device. This is essential for a non-custodial wallet because the alternative would be to regenerate or retrieve your keys from a remote server every time you wanted to sign a transaction, which would defeat the purpose of client-side key management. The encryption happens on your device before anything is written to storage, so the browser’s storage API itself does not expose your unencrypted keys. Your device password, biometric security, and the wallet’s own encryption layer all work together to protect what is stored.

Scripting permissions are often the permission that raises the most concern. “Execute scripts” sounds powerful because it is: the extension can run code in the context of web pages you visit. That code does exactly one thing for Rabby: it allows the wallet to communicate between the page and the extension’s background service worker. A dApp needs a way to ask your wallet to sign something; your wallet needs a way to tell the dApp whether you approved it. That communication channel requires script injection. Without it, the wallet would be invisible to dApps, and you would have no way to transact.

Why a decentralized wallet needs broad but limited access

A fully decentralized wallet, like Rabby, operates under a constraint that centralized services do not face. A traditional centralized exchange or custodian holds your keys on their servers and communicates with blockchains on your behalf. They can afford narrower permissions and simpler architectures because they control the entire stack. A decentralized wallet, by definition, does not hold your keys. Instead, it runs on your device and must communicate with blockchains and dApps through your browser.

That architecture is why the Rabby wallet extension must request access to multiple chains simultaneously. You might hold assets on Ethereum, Arbitrum, Polygon, Avalanche, Fantom, and several others. The wallet needs to query balances, listen for new transactions, and monitor gas prices across all of them. A permission to “communicate with ethereum.org and polygon.rpc.example.com” would be more granular, but it would also break every time a new chain was added or a node URL changed. Instead, the extension requests permission to communicate with any remote host—but it restricts those communications to blockchain RPC calls, which are standardized and transparent. You can open your browser’s developer tools and watch exactly what data is being sent to blockchain nodes.

Multi-chain support is one of the core design principles of the Rabby wallet extension. Supporting Ethereum and numerous EVM-compatible blockchains means the wallet must be flexible about which networks it can reach. A more restrictive permission model would require you to reinstall the extension or grant new permissions every time a new blockchain was added. Instead, Rabby asks for broad network access once, then enforces restrictions through code and user controls. The difference between what a permission nominally allows and what the application actually does is enforced by transparency: you can inspect the extension’s code, monitor its network traffic, and observe its behavior through your browser’s debugging tools.

Hardware wallet compatibility adds another layer to the permission model. If you connect a Ledger, Trezor, or other hardware wallet to Rabby, the extension must be able to communicate with the hardware device through your browser’s WebHID or WebUSB API. Those are additional permissions that only activate when you choose to use a hardware wallet. The default Rabby installation does not require hardware access; that permission is requested only when you explicitly set up a hardware wallet connection. This principle—requesting permissions on demand rather than upfront—is a privacy and security best practice that Rabby follows consistently.

Transaction signing preview and what permissions make it possible

One of the most valuable features of the Rabby wallet extension is its transaction simulation and signing preview. Before you approve any transaction, you see what tokens you are sending, what you are receiving, what the fee will be, and whether the transaction is likely to fail. That feature prevents countless mistakes and exploits. A user might be tricked into approving a contract that drains their wallet, or they might accidentally swap into the wrong token, or they might not realize the gas fee is unusually high. The signing preview catches these errors by showing you exactly what is about to happen.

That capability requires the wallet to parse the transaction data being sent to your device, simulate it against the current blockchain state, and display the results in human-readable form. Simulation requires access to blockchain data and the ability to run transactions locally without actually broadcasting them. The permission model allows this because the extension can communicate with blockchain RPC nodes and perform these calculations without ever exposing your private key or sending anything to the network. The signing preview is read-only: it examines and displays, but does not commit anything until you explicitly approve.

The same permissions that enable transaction preview also protect you from a category of attack called “permission confusion” or “token approval theft.” When you interact with a decentralized exchange or liquidity protocol, you often need to approve the protocol to spend a specific token on your behalf. Many users approve unlimited amounts because they do not read the approval carefully or because they do not understand what they are authorizing. Rabby’s signing preview highlights approval transactions and shows you exactly how many tokens are being approved and to which address. That transparency is only possible because the wallet has permission to read and analyze the transaction data being sent to you.

Privacy and transaction security work together here. The biometric security and private key encryption that protect your wallet do not prevent you from making a bad decision if you do not have complete information. The signing preview—enabled by the wallet’s permissions to read and analyze page content—gives you the information you need to make an informed choice. Without those permissions, the wallet would have to rely on you to understand raw transaction data, which is impractical for most users.

Storage, encryption, and offline security across browser syncing

When you set up the Rabby wallet extension, you create or import a wallet and choose a password. That password is used to encrypt your private key material using a cryptographic algorithm before it is ever written to disk. The extension’s storage permission allows it to save that encrypted data to your browser’s local storage—which means the data is tied to your device and your browser profile. If you switch browsers, create a new browser profile, or use a different device, you cannot access your wallet without reimporting or restoring from a recovery phrase.

This design is a deliberate security choice. Storing encrypted private keys locally and requiring a password to decrypt them means you are not vulnerable to a compromise of a cloud service or a cloud backup. Your Google Drive, iCloud, or Microsoft OneDrive cannot leak your cryptocurrency keys because they are not stored there. The tradeoff is that you must remember your password, secure your recovery phrase, and manage backups yourself. Those responsibilities fall entirely on you, which is why a decentralized wallet emphasizes that users are responsible for fund security, not the wallet provider.

Biometric security—fingerprint or face recognition—adds a second layer on top of the password encryption. When you enable biometric authentication for the Rabby wallet extension, your device’s biometric system verifies your identity, and only then does the extension decrypt your private key to sign a transaction. The biometric data itself is not stored by the wallet; it is handled by your device’s secure enclave or trusted platform module. The wallet simply leverages the authentication decision made by your operating system. This means you get strong authentication without the wallet ever seeing your biometric data.

Offline storage of your recovery phrase is even more critical. A recovery phrase is a human-readable backup of your private key, typically 12 or 24 words in a specific order. If you lose access to the Rabby wallet extension—by uninstalling it, losing the device, or forgetting your password—you can restore your wallet using the recovery phrase, provided you have saved it in a secure location. The wallet cannot help you recover this phrase if it is lost, which is why security guidance is unambiguous: write it down by hand on paper, store the paper in a physically secure location, and never photograph it or type it into a digital device.

Comparing permissions across browsers and managing granularity

The Rabby wallet extension is available for Chrome, Brave, Edge, and Firefox, but the permission systems differ slightly across these browsers. Chrome is typically the most permissive; it allows extensions broad network access and scripting capabilities. Firefox has historically been stricter with permissions and requires more explicit declarations. Edge generally follows Chrome’s model. These differences matter because they affect what Rabby must request and how transparently the permission list is presented to you.

On Chrome and Edge, you will see permissions grouped into categories: “can access your data on all websites,” “can read and change your settings for any website,” and “can communicate with cooperating websites.” On Firefox, the permission list is more granular and includes specific declarations about which protocols the extension can use. Neither approach is objectively superior; they reflect different philosophies about the tradeoff between transparency and usability. A more granular list can be more informative, but it can also be so detailed that most users do not read it carefully.

Browser-specific constraints also affect how the Rabby wallet extension handles certain features. For example, WebHID support for hardware wallets is available on Chrome, Edge, and newer versions of Firefox, but not on Brave (which requires a different approach). These variations mean that the full feature set might not be available on every browser. Checking the official rabby wallet extension documentation for your specific browser ensures you understand what features are available and what permissions will be requested.

You can also inspect permissions after installation. In Chrome and Edge, open the extension menu, find Rabby, click the details or “manage extension” button, and review the permissions listed on the extension’s detail page. This shows you exactly what the extension declared in its manifest. If you want to restrict specific permissions—for instance, if you want to prevent the extension from running on certain websites—most browsers allow you to set custom permissions rules. These granular controls are a browser feature, not a Rabby feature, but they give you additional leverage over how the extension behaves in your environment.

Monitoring wallet activity and detecting unusual permission use

The fact that the Rabby wallet extension is non-custodial and open-source gives you tools to verify that it is behaving as documented. Open your browser’s developer tools (F12 on most systems) and navigate to the “Network” tab. When you interact with a blockchain network through Rabby, you will see HTTP or WebSocket requests being sent to RPC nodes. You can inspect these requests and confirm that they are legitimate RPC calls—queries for balance, transaction status, contract data—rather than suspicious transmissions of your private key or wallet address to unknown servers.

The extension’s background service worker can also be inspected in the developer tools. In Chrome, navigate to `chrome://extensions/`, find Rabby, click “details,” then click “background page” (if available) or use the service worker section to see what code is running. You can set breakpoints, watch variables, and trace execution. This level of inspection is far beyond what most users will do, but it is available to security-conscious users and auditors. If you suspect unusual behavior, you have tools to investigate.

Permission creep—where an application gradually requests or uses more permissions than it initially declared—is a known security concern with browser extensions. You can detect this by reviewing the manifest.json file directly. The extension folder is typically located in a predictable place on your system; on Windows it is usually `%LocalAppData%\Google\Chrome\User Data\Default\Extensions\` followed by the extension’s ID. Inside the extension folder, open the manifest.json file in a text editor. The “permissions” array lists everything the extension declared it would use. If you download a new version and the permissions list has grown without explanation, that is a signal to investigate or update your configuration.

These monitoring techniques work because the Rabby wallet extension operates in your browser, not on a remote server. Unlike a mobile app that runs in a proprietary sandbox, a browser extension runs in an environment you can inspect. That transparency is part of what makes browser-based wallets valuable for security-conscious users, even though it requires more engagement than simply trusting an application provider.

Best practices for managing wallet extension permissions and security

The most important permission to think about is not necessarily the most restrictive one. It is the one that aligns your threat model with your behavior. If you only use the Rabby wallet extension for occasional transactions, you might create a separate browser profile or even a separate browser installation dedicated to crypto activity. This approach limits the extension’s exposure to your other browsing habits and reduces the number of websites the extension needs to access. That is more granular control than the extension’s own permission system can offer.

Keep the Rabby wallet extension updated. New versions often include security patches, bug fixes, and improvements to the signing preview and transaction simulation. Updates do not change your wallet—they are applied to the extension code—but they can close vulnerabilities or improve the accuracy of transaction analysis. Most browsers update extensions automatically, but you can manually check for updates by navigating to the extensions page and clicking “Update extensions now.”

Treat your recovery phrase as your highest-priority secret. The permissions that the Rabby wallet extension requests are designed to protect your private key from being stolen during normal use, but they do not protect you from losing your device or forgetting your password. The recovery phrase is the fallback. If you write it down, keep the paper in a physically secure location—a safe deposit box, a safe bolted to the floor, or another arrangement that would make it difficult for someone to steal it casually. Do not photograph it, email it, or store it on a computer that connects to the internet.

Use biometric security in the wallet as a convenience feature, not as a replacement for a strong password. The password encrypts your key material at rest; the biometric authentication is an additional check before decryption. Both matter. If you use only biometric authentication and someone steals your device, they might be able to unlock your wallet by forcing your fingerprint or using other techniques. If you use only a password and your device is compromised by malware, the malware could capture your password as you type it. Combined, they raise the cost of attack on both fronts.

Finally, understand that the Rabby wallet extension is a tool, not a guarantee. It can help you manage cryptocurrency and digital assets across multiple blockchains, but no application can protect you from human error, phishing, or social engineering. The signing preview prevents you from approving transactions you do not understand, but it cannot prevent you from being tricked into visiting a phishing site where an attacker is impersonating a legitimate dApp. Wallet security is always a combination of application design, device security, user behavior, and threat awareness.

A user downloads a Rabby wallet extension, generates a recovery phrase, and stores it in what they believe is a secure location. Weeks later, malware on the same computer reads that seed phrase from a text file, or a browser cache leak exposes it during synchronization. The private keys derived from that phrase are now compromised, and the attacker has access to every account the wallet controls. This scenario is not theoretical; it happens frequently enough that understanding the failure modes of recovery phrases in any self-custodial wallet, including Rabby, is essential before deciding how to store and protect assets.

A different user purchases a hardware wallet, connects it to their Rabby wallet extension, and adds a passphrase that transforms the derivation path and thus creates an entirely separate set of accounts from the ones derived by the recovery phrase alone. Even if the hardware device is physically stolen or the Rabby extension is compromised, that passphrase-protected layer remains inaccessible without knowledge of the additional secret. The comparison between these two approaches—a recovery phrase kept locally versus a passphrase-protected hardware wallet integrated with Rabby—reveals fundamental differences in how secrets are stored, accessed, and exposed to risk.

How recovery phrases in Rabby create persistent risk

When a user creates a new wallet in the Rabby wallet extension, the application generates a recovery phrase—typically twelve or twenty-four words that encode the master seed from which all private keys are derived. This phrase is presented once, on screen, and the user is instructed to write it down and store it securely. From that point forward, the recovery phrase is the root secret. Anyone with access to it can regenerate every private key, restore every account, and transfer every asset without triggering any signature request or hardware authorization.

The fundamental problem is that the recovery phrase must be stored somewhere, and that storage location becomes an attack surface. If it is written on paper and kept in a home safe, it is protected against digital compromise but vulnerable to physical theft, fire, or family members who find it. If it is stored in a digital file—encrypted or not—that file lives on a device with an operating system that may have vulnerabilities, background processes that leak memory, or malware that searches for secrets. A browser extension like Rabby runs inside a browser process, which means the device and browser are both part of the threat model.

The Rabby wallet extension itself does not store the recovery phrase automatically; the user is responsible for backing it up. However, once the phrase is created and displayed in the browser, the window during which it exists in application memory, clipboard history, browser cache, or temporary files creates a window of exposure. If a user copies the phrase to the clipboard to paste it into a password manager, that clipboard may be visible to other applications or logged by system utilities. If the phrase is typed into a text editor on the same machine where the Rabby extension runs, that editor’s autosave, temporary files, or search index may retain the secret long after the document appears to be deleted.

Device compromise is the scenario where recovery phrase storage fails most decisively. Keyloggers, screen capture malware, and clipboard monitors do not need physical access to the device—they can operate remotely if the machine is connected to the internet and vulnerable to infection. A user who believes their recovery phrase is secure because it is written down may not realize that the act of typing it to restore the wallet, importing it into a new extension, or even looking at a photograph of the written words could expose it to a compromised camera or OCR-enabled malware. The recovery phrase’s protection depends almost entirely on the security of every device and location it has ever touched.

Hardware wallet integration eliminates single-secret dependency

A hardware wallet changes the architecture by keeping the master seed completely offline and requiring a physical signing step for every transaction. The Rabby wallet extension can display balances and prepare transactions, but it cannot move funds without confirmation from the hardware device itself. This separation means that compromising the browser extension, the Rabby wallet extension software, or even the computer hosting it does not grant access to the private keys. The attacker would need the hardware device, and even then, would need either the PIN code that protects the device or the recovery phrase that was generated and stored on the device.

Adding a passphrase to the hardware wallet creates a second secret that is not derived from the recovery phrase and is never stored on the device in plaintext. Instead, it is combined with the master seed during key derivation. Each unique passphrase produces a completely different set of accounts and keys from the same physical device. This means that even if an attacker steals the hardware wallet and discovers the PIN, they cannot access the passphrase-protected accounts without knowing the passphrase itself. The passphrase must be entered through the hardware wallet during the signing process or configured in the Rabby wallet extension before connecting to the device.

The security gain is substantial: the attacker now faces a two-factor problem. They have the hardware device, but they lack the passphrase. The passphrase can be short—even a four-digit code provides 10,000 possibilities—and it does not need to be randomly generated from a word list. It is something the user can remember without writing it down, which eliminates the need to store a second secret physically. This is why users often choose passphrases over recovery phrases: a passphrase can exist solely in memory, requiring no backup medium and creating no written artifact that could be photographed, scanned, or stolen.

Why Rabby wallet extension hardware integration matters

The Rabby wallet extension supports direct integration with hardware wallets including Ledger, Trezor, and others through standard protocols. This integration is important because it allows a user to benefit from hardware security without needing to switch applications or manually copy addresses back and forth. The extension can display the hardware wallet’s accounts, preview transactions before sending them to the device for signing, and interpret transaction risks through Rabby’s built-in security checks.

Those security checks—pre-sign validation, network state verification, and risk alerts—operate on the computer but do not require access to private keys. They can warn the user that a transaction is sending funds to an address that is not in the contact list, that a contract interaction could drain the wallet, or that the network has been changed unexpectedly. These checks are only as good as the integrity of the Rabby wallet extension itself, but they run before the hardware device is asked to sign, giving the user a chance to catch obvious mistakes before they are irreversible.

The combination of Rabby’s transaction simulation and a hardware wallet’s isolation is more robust than either alone. The simulation catches user error on the computer; the hardware device’s isolation ensures that even if the computer is fully compromised, the attacker cannot sign transactions without physical access and potentially a second authentication factor. The recovery phrase that was generated on the hardware wallet during setup is protected by the same isolation. It was never exposed to the browser or extension, and it should be stored completely separately from the device itself.

Failure mode analysis: device loss and theft scenarios

Consider a user who has generated a recovery phrase for their Rabby wallet extension and stored it on a piece of paper in a desk drawer. If the computer hosting the Rabby wallet extension is stolen or destroyed, the user can restore their wallet on a new device by entering the recovery phrase. The time-to-recovery is limited by how quickly they can access the written backup and how quickly they can authenticate to the new device. However, the risk is that during the restoration process, the phrase must be entered into the new Rabby wallet extension. If that new installation is itself compromised—if the user unknowingly downloaded a fake version or if the legitimate extension has a vulnerability—the recovery phrase could be stolen during restoration.

A hardware wallet changes this scenario substantially. If the hardware device is stolen, the attacker has the device but not the PIN or passphrase. The recovery phrase was written down during hardware wallet setup and is stored separately; the thief does not have it. Recovery involves purchasing a replacement hardware wallet, entering the recovery phrase to restore the accounts on that new device, and confirming that the passphrases produce the correct accounts. The main vulnerability is not the hardware device itself but the backup location where the recovery phrase was stored.

For a user who stores the hardware wallet recovery phrase in a safe deposit box and the passphrase in memory, the attack now requires either discovering the passphrase (10,000 or more possibilities, depending on length) or gaining access to two physical locations. A thief with the stolen hardware device has limited options. They could attempt PIN guessing (usually locked after 3–5 incorrect entries), but they cannot bypass the passphrase protection even if they successfully guess the PIN. The passphrase is not stored on the device and cannot be extracted from it; it only affects the key derivation when entered during signing.

The hybrid approach: Rabby with hardware wallet and memory-only passphrase

The most practical setup for higher-value holdings combines the Rabby wallet extension with a hardware wallet and a passphrase that is never written down. The workflow is as follows: the hardware wallet generates a recovery phrase during initialization, which is written down and stored offline, away from any device. A passphrase is created—often a short phrase that is easy to remember but not guessable through dictionary attack. That passphrase is never stored, written, or transmitted. Instead, it exists only in the user’s memory and is entered into the Rabby wallet extension during hardware wallet connection, or entered on the hardware device itself if the device supports passphrase entry through its interface.

The advantage of this approach is that compromise of any single component leaves the funds inaccessible. The Rabby wallet extension running on the computer can be fully compromised by malware, and the attacker cannot access the funds because they lack the passphrase and do not have the hardware device. The hardware device can be stolen, and without the passphrase, the attacker cannot use it to sign transactions. The computer can be lost or destroyed, but recovery is possible by connecting the hardware device to a new computer and entering the passphrase to access the accounts.

This setup does require the user to remember the passphrase, which creates a risk of forgetting it. Unlike a recovery phrase that can be written down, a forgotten passphrase usually cannot be recovered—there is no backup, and no support team can override the derivation. This is why users should choose a passphrase they are confident they will remember under stress, not a random string of characters. Common advice is to use a memorable phrase that is not a dictionary entry, personal information, or anything that appears in common word lists. Testing the passphrase on a small transaction, or on a testnet, before moving significant funds is also prudent.

When recovery phrases fail more often than users expect

Recovery phrases fail not only when they are stolen but when they are lost, misplaced, or impossible to read after years of storage. A piece of paper kept in a desk drawer can fade, be damaged by moisture, or be discarded during a move. A recovery phrase stored in a password manager can be lost if the password manager account is compromised or if the backup is not replicated across multiple locations. A recovery phrase photographed and stored in cloud photos can be compromised if the cloud account is breached.

The redundancy problem is subtle: storing only one copy of the recovery phrase creates a single point of failure. Storing multiple copies creates multiple attack surfaces. A user who keeps one copy at home and one copy in a safe deposit box must make sure both copies are identical and both remain protected. A user who shares a copy with a trusted family member has given that family member the ability to access all accounts—and has also made the phrase vulnerable to that family member’s own security practices, which may be poor.

Hardware wallet recovery phrases, when properly stored, face the same trade-off. The difference is that a hardware wallet recovery phrase can be stored more conservatively because the passphrase is the actual secret that must be remembered daily. The recovery phrase is needed only in the rare event that the hardware device is damaged and must be restored. This asymmetry—keeping the recovery phrase as an offline backup while using a passphrase as the active protection—allows stronger overall security than keeping a recovery phrase as the only secret.

Integrating Rabby with multiple hardware wallet types

Users who want to diversify across multiple hardware wallet brands can connect several devices to the same Rabby wallet extension. A user might have both a Ledger device (for desktop use) and a Trezor device (for travel), both protected by different passphrases and both integrated with Rabby. This creates redundancy: if one device is lost or damaged, the other can still be used, and both can ultimately be restored from their respective recovery phrases. The passphrases, if remembered and different for each device, provide independent protection.

The complication is that connecting multiple hardware wallets to the Rabby wallet extension requires careful account management. The extension can show accounts from both devices, but the user should be clear about which account belongs to which device and which passphrase unlocks which accounts. Mixing them up—trying to sign a transaction from a Ledger account using the Trezor device—will fail, and repeated failures could be confusing or create delays when funds are needed quickly.

A simpler approach is to use one hardware wallet as primary and another as a backup. The primary device holds the accounts used for regular transactions, while the backup device is initialized with the same recovery phrase and passphrase, stored separately, and used only if the primary device is lost or fails. This requires that the user copy the recovery phrase to two physical locations and remember two identical passphrases, which is more difficult than a single passphrase approach but provides full redundancy without the account-tracking complexity.

Setting up Rabby with security best practices in practice

The first step is to download the Rabby wallet extension from the official source only—rabby.io or the official Chrome Web Store entry. Downloading from any other location risks installing malware disguised as the legitimate rabby wallet extension, which could steal private keys, seed phrases, or passphrases before the user even realizes they have the wrong software. Checking the extension ID and verifying that the URL is correct prevents this common attack.

Once the legitimate extension is installed, the user should purchase a hardware wallet from an official retailer or directly from the manufacturer. Hardware wallets should never be purchased from secondary markets unless the buyer can verify that the device has never been initialized, which is usually indicated by sealed packaging and tamper-evident seals. An already-initialized device could be running modified firmware, and the recovery phrase could have been logged by the previous owner.

During hardware wallet setup, the device will generate a recovery phrase. This phrase should be written down by hand on paper, not typed or photographed. The paper should be stored in a physically secure location such as a safe deposit box or a home safe, not in a drawer or on a desk. A second copy, if made, should be stored in a different location. The passphrase should be chosen next—a memorable phrase that is at least twelve characters long and includes upper and lower case letters, numbers, or special characters if the device supports it. The passphrase should never be written down, and it should be different from any existing password used elsewhere.

After the hardware wallet is initialized, it can be connected to the computer and paired with the Rabby wallet extension. The extension will detect the device and allow the user to view accounts derived from the recovery phrase plus passphrase. A small test transaction—sending a small amount of an EVM-compatible token to the wallet—should be performed to verify that the setup is correct before moving significant funds. The test transaction confirms that the recovery phrase, passphrase, and hardware integration are all working correctly.

What to do if a recovery phrase or passphrase is compromised

If a user suspects that their Rabby wallet extension recovery phrase has been exposed, the correct action is to move all funds to a new wallet immediately. This new wallet should use a new recovery phrase generated on a fresh hardware wallet or fresh Rabby installation, and the old recovery phrase should be considered permanently compromised. All accounts derived from the old phrase become vulnerable, and the attacker could move funds at any moment if they have access to the internet and the ability to sign transactions.

If the passphrase protecting a hardware wallet is compromised, the risk is more limited because the attacker also needs the hardware device. However, if both the device and the passphrase are compromised, the user must move funds to a new wallet. A new hardware wallet should be purchased, a new recovery phrase generated, and a new passphrase created. The old hardware wallet should be considered permanently compromised and destroyed or securely wiped if the device supports reset functionality.

Recovery from either scenario requires transferring funds from the compromised wallet to a new one. This requires gas fees and creates a transaction on the public Ethereum network and on any other EVM chains where funds were held. The transaction is visible to anyone, but it does ensure that funds are moved to security that the attacker cannot access. Speed is important: the longer a compromised wallet remains active, the longer an attacker has to notice it and drain the funds. Most users who discover compromise act within hours, which is fast enough to move funds before theft occurs in most cases.