Quantus-Network · illuzen · Feb 15, 2026 · Nov 28, 2025 · Nov 29, 2025 · Dec 12, 2025
diff --git a/Cargo.lock b/Cargo.lock
diff --git a/Cargo.toml b/Cargo.toml
@@ -12,7 +12,6 @@ members = [
 	"client/network",
 	"miner-api",
 	"node",
-	"pallets/balances",
 	"pallets/mining-rewards",
 	"pallets/multisig",
 	"pallets/qpow",
@@ -75,7 +74,7 @@ lazy_static = { version = "1.5.0", default-features = false, features = [
 	"spin_no_std",
 ] }
 libp2p = { version = "0.54.1" }
-libp2p-identity = { git = "https://github.com/Quantus-Network/qp-libp2p-identity", tag = "v0.2.11_patch_qp_rusty_crystals_dilithium_2_0" }
+libp2p-identity = { git = "https://github.com/Quantus-Network/qp-libp2p-identity", tag = "v0.2.11_patch_qp_rusty_crystals_dilithium_2_1" }
 linked_hash_set = { version = "0.1.4" }
 log = { version = "0.4.22", default-features = false }
 memory-db = { version = "0.34.0", default-features = false }
@@ -130,7 +129,7 @@ wasm-timer = { version = "0.2.5" }
 zeroize = { version = "1.7.0", default-features = false }
 
 # Own dependencies
-pallet-balances = { path = "./pallets/balances", default-features = false }
+pallet-balances = { version = "42.0.0", default-features = false }
 pallet-mining-rewards = { path = "./pallets/mining-rewards", default-features = false }
 pallet-multisig = { path = "./pallets/multisig", default-features = false }
 pallet-qpow = { path = "./pallets/qpow", default-features = false }
@@ -149,18 +148,19 @@ sp-consensus-pow = { path = "./primitives/consensus/pow", default-features = fal
 sp-consensus-qpow = { path = "./primitives/consensus/qpow", default-features = false }
 
 # Quantus network dependencies
-qp-poseidon = { version = "1.0.1", default-features = false }
-qp-poseidon-core = { version = "1.0.1", default-features = false, features = ["p3"] }
-qp-rusty-crystals-dilithium = { version = "2.0.0", default-features = false }
-qp-rusty-crystals-hdwallet = { version = "1.0.0" }
-qp-wormhole-circuit = { version = "0.1.2", default-features = false }
-qp-wormhole-circuit-builder = { version = "0.1.2", default-features = false }
-qp-wormhole-verifier = { version = "0.1.2", default-features = false, features = [
-	"no_random",
-] }
-qp-zk-circuits-common = { version = "0.1.2", default-features = false, features = [
-	"no_random",
+qp-plonky2 = { version = "1.1.3", default-features = false }
+qp-poseidon = { version = "1.0.7", default-features = false }
+qp-poseidon-core = { version = "1.0.7", package = "qp-poseidon-core", default-features = false, features = [
+	"p2",
+	"p3",
 ] }
+qp-rusty-crystals-dilithium = { version = "2.1.0", default-features = false }
+qp-rusty-crystals-hdwallet = { version = "1.3.0" }
+qp-wormhole-circuit = { version = "1.0.5", default-features = false }
+qp-wormhole-circuit-builder = { version = "1.0.5", default-features = false }
+qp-wormhole-prover = { version = "1.0.5", default-features = false }
+qp-wormhole-verifier = { version = "1.0.5", default-features = false }
+qp-zk-circuits-common = { version = "1.0.5", default-features = false }
 
 # polkadot-sdk dependencies
 frame-benchmarking = { version = "41.0.0", default-features = false }
@@ -233,14 +233,13 @@ substrate-test-utils = { version = "3.0.0", default-features = false }
 substrate-wasm-builder = { version = "27.0.0", default-features = false }
 
 [patch.crates-io]
-libp2p-identity = { git = "https://github.com/Quantus-Network/qp-libp2p-identity", tag = "v0.2.11_patch_qp_rusty_crystals_dilithium_2_0" }
+libp2p-identity = { git = "https://github.com/Quantus-Network/qp-libp2p-identity", tag = "v0.2.11_patch_qp_rusty_crystals_dilithium_2_1" }
 libp2p-noise = { git = "https://github.com/Quantus-Network/qp-libp2p-noise", tag = "v0.45.10" }
 sc-cli = { path = "./client/cli" }
 sc-network = { path = "client/network" }
 sp-state-machine = { path = "./primitives/state-machine" }
 sp-trie = { path = "./primitives/trie" }
 
-
 [profile.release]
 opt-level = 3
 panic = "unwind"

diff --git a/MINING.md b/MINING.md
@@ -2,6 +2,15 @@
 
 Get started mining on the Quantus Network testnet in minutes.
 
+## Important: Wormhole Address System
+
+**⚠️ Mining rewards are automatically sent to wormhole addresses derived from your preimage.**
+
+- You provide a 32-byte preimage when starting mining
+- The system derives your wormhole address using Poseidon hashing
+- All mining rewards are sent to this derived wormhole address
+- This ensures all miners use privacy-preserving wormhole addresses
+
 ## System Requirements
 
 ### Minimum Requirements
@@ -32,17 +41,17 @@ If you prefer manual installation or the script doesn't work for your system:
    ./quantus-node key generate-node-key --file ~/.quantus/node_key.p2p
    ```
 
-3. **Generate Rewards Address**
+3. **Generate Wormhole Address & Preimage**
+
    ```bash
-   ./quantus-node key quantus
+   ./quantus-node key quantus --scheme wormhole
    ```
-
-  The address is in the output like this:
-```sh
-...
-Address: qzpjg55HuN2vLdQerpZwhsGfRn6b4pc8uh4bdEgsYbJNeu8rn
-...
-```
+
+   This generates a wormhole key pair and shows:
+   - `Address`: Your wormhole address (where rewards will be sent)
+   - `inner_hash`: Your 32-byte preimage (use this for mining)
+
+   **Save the preimage** - you'll need it for the `--rewards-address` parameter.
 
 4. **Run the node (Dirac testnet)**
 
@@ -52,10 +61,12 @@ Minimal command - see --help for many more options
     --validator \
     --chain dirac \
     --node-key-file ~/.quantus/node_key.p2p \
-    --rewards-address <COPIED_REWARDS_ADDRESS> \
+    --rewards-preimage <YOUR_PREIMAGE_FROM_STEP_3> \
     --max-blocks-per-request 64 \
     --sync full
 ```
+
+**Note:** Use the `inner_hash` from step 3 as your `--rewards-preimage`. The node will derive your wormhole address and log it on startup.
 ### Docker Installation
 
 For users who prefer containerized deployment or have only Docker installed:
@@ -92,23 +103,20 @@ docker run --rm --platform linux/amd64 \
 Replace `quantus-node:v0.0.4` with your desired image (e.g., `ghcr.io/quantus-network/quantus-node:latest`).
 This command saves `node_key.p2p` into your local `./quantus_node_data` directory.
 
-**Step 3: Generate and Save Your Rewards Address**
+**Step 3: Generate Your Wormhole Address**
 
-Run the following command to generate your unique rewards address:
 ```bash
 # If on Apple Silicon, you may need to add --platform linux/amd64
-docker run --rm ghcr.io/quantus-network/quantus-node:latest key quantus
+docker run --rm ghcr.io/quantus-network/quantus-node:latest key quantus --scheme wormhole
 ```
-Replace `quantus-node:v0.0.4` with your desired image.
-This command will display your secret phrase, public key, address, and seed.
-**Important: Securely back up your secret phrase!**
-Next, **copy the displayed `Address`.
+
+This generates a wormhole key pair. Save the `inner_hash` value - this is your preimage for mining.
 
 **Step 4: Run the Validator Node**
 
-Now, run the Docker container with all the necessary parameters:
 ```bash
 # If on Apple Silicon, you may need to add --platform linux/amd64
+# Replace YOUR_PREIMAGE with the inner_hash from step 3
 docker run -d \
   --name quantus-node \
   --restart unless-stopped \
@@ -120,7 +128,7 @@ docker run -d \
   --base-path /var/lib/quantus \
   --chain dirac \
   --node-key-file /var/lib/quantus/node_key.p2p \
-  --rewards-address <COPIED_REWARDS_ADDRESS>
+  --rewards-preimage <YOUR_PREIMAGE>
 ```
 
 *Note for Apple Silicon (M1/M2/M3) users:* As mentioned above, if you are using an `amd64` based Docker image on an ARM-based Mac, you will likely need to add the `--platform linux/amd64` flag to your `docker run` commands.
@@ -190,14 +198,57 @@ docker run -d \
 - Docker 20.10+ or compatible runtime
 - All other system requirements same as binary installation
 
+## External Miner Setup
+
+For high-performance mining, you can offload the QPoW mining process to a separate service, freeing up node resources.
+
+### Prerequisites
+
+1. **Build Node:**
+   ```bash
+   # From workspace root
+   cargo build --release -p quantus-node
+   ```
+
+2. **Get External Miner:**
+   ```bash
+   git clone https://github.com/Quantus-Network/quantus-miner
+   cd quantus-miner
+   cargo build --release
+   ```
+
+### Setup with Wormhole Addresses
+
+1. **Generate Your Wormhole Address**:
+   ```bash
+   ./quantus-node key quantus --scheme wormhole
+   ```
+   Save the `inner_hash` value.
+
+2. **Start External Miner** (in separate terminal):
+   ```bash
+   RUST_LOG=info ./target/release/quantus-miner
+   ```
+   *(Default: `http://127.0.0.1:9833`)*
+
+3. **Start Node with External Miner** (in another terminal):
+   ```bash
+   # Replace <YOUR_PREIMAGE> with the inner_hash from step 1
+   RUST_LOG=info,sc_consensus_pow=debug ./target/release/quantus-node \
+    --validator \
+    --chain dirac \
+    --external-miner-url http://127.0.0.1:9833 \
+    --rewards-preimage <YOUR_PREIMAGE>
+   ```
+
 ## Configuration Options
 
 ### Node Parameters
 
 | Parameter | Description | Default |
 |-----------|-------------|---------|
 | `--node-key-file` | Path to P2P identity file | Required |
-| `--rewards-address` | Path to rewards address file | Required |
+| `--rewards-preimage` | Wormhole preimage (inner_hash from key generation) | Required |
 | `--chain` | Chain specification | `dirac` |
 | `--port` | P2P networking port | `30333` |
 | `--prometheus-port` | Metrics endpoint port | `9616` |
@@ -234,14 +285,18 @@ curl -H "Content-Type: application/json" \
 
 ### Check Mining Rewards
 
-**View Balance**
+**View Balance at Your Wormhole Address**
 ```bash
-# Replace YOUR_ADDRESS with your rewards address
+# Replace YOUR_WORMHOLE_ADDRESS with your wormhole address from key generation
 curl -H "Content-Type: application/json" \
-  -d '{"jsonrpc":"2.0","id":1,"method":"faucet_getAccountInfo","params":["YOUR_ADDRESS"]}' \
+  -d '{"jsonrpc":"2.0","id":1,"method":"faucet_getAccountInfo","params":["YOUR_WORMHOLE_ADDRESS"]}' \
   http://localhost:9944
 ```
 
+**Find Your Wormhole Address**
+- From key generation: Use the `Address` field from `./quantus-node key quantus --scheme wormhole`
+- From node logs: Check startup logs for "Mining rewards will be sent to wormhole address"
+
 ## Testnet Information
 
 - **Chain**: Dirac Testnet
@@ -268,9 +323,14 @@ quantus-node purge-chain --chain dirac
 
 **Mining Not Working**
 1. Check that `--validator` flag is present
-2. Verify rewards address file exists and contains valid address
+2. Verify your preimage from `inner_hash` field in key generation
 3. Ensure node is synchronized (check logs for "Imported #XXXX")
 
+**Wormhole Address Issues**
+1. **Can't find rewards**: Check the `Address` field from your key generation
+2. **Invalid preimage**: Use the exact `inner_hash` value from key generation  
+3. **Wrong address**: Rewards go to the wormhole address, not the preimage
+
 **Connection Issues**
 1. Check firewall settings (allow port 30333)
 2. Verify internet connection
@@ -302,9 +362,11 @@ curl -H "Content-Type: application/json" \
 
 ## Mining Economics
 
-### Rewards Structure
+### Wormhole Address Rewards System
 
-- **Block Rewards**: Earned by successfully mining blocks
+- **Automatic Wormhole Addresses**: All mining rewards go to your wormhole address
+- **Privacy by Design**: Your reward address is derived from your preimage
+- **Block Rewards**: Earned by successfully mining blocks  
 - **Transaction Fees**: Collected from transactions in mined blocks
 - **Network Incentives**: Additional rewards for network participation
 
@@ -320,9 +382,9 @@ Mining performance depends on:
 
 ### Key Management
 
-- **Backup Your Keys**: Store copies of your node identity and rewards keys safely
-- **Secure Storage**: Keep private keys in encrypted storage
-- **Regular Rotation**: Consider rotating keys periodically for enhanced security
+- **Backup Your Keys**: Securely store your wormhole key pair from key generation
+- **Backup Node Keys**: Store copies of your node identity keys safely  
+- **Secure Storage**: Keep preimages and private keys in encrypted storage
 
 ### Node Security
 
@@ -341,8 +403,8 @@ This is testnet software for testing purposes only:
 ## Next Steps
 
 1. **Join the Community**: Connect with other miners and developers
-2. **Monitor Performance**: Track your mining efficiency and rewards
-3. **Experiment**: Try different configurations and optimizations
+2. **Monitor Performance**: Track your mining efficiency and rewards at your wormhole address
+3. **Experiment**: Try different configurations and optimizations  
 4. **Contribute**: Help improve the network by reporting issues and feedback
 
 Happy mining! 🚀

diff --git a/README.md b/README.md
@@ -57,17 +57,9 @@ bip39 wordlist.
 
 Seed must be a 64-character hex string
 
----
-
-### Rewards address
+## Mining
 
-By providing the optional `--rewards-address` parameter, the node will start sending mining and transaction rewards
-after each block confirmation by the runtime.
-If this address is not specified, rewards will not be minted.
-
-```shell
-./quantus-node --chain local --validator --rewards-address <NODE_OPERATOR_ADDRESS>
-```
+For complete mining setup instructions, including wormhole address requirements and external miner configuration, see [MINING.md](MINING.md).
 
 ## Local dev run
 
@@ -81,44 +73,6 @@ If this address is not specified, rewards will not be minted.
 ./target/release/quantus-node --dev
 ```
 
-## Run with External Miner
-
----
-
-This node supports offloading the QPoW mining process to a separate service, freeing up node resources.
-
-Any service that adheres to the API spec below can be used as miner by the node. We provide a sample implementation in
-the 'miner' crate.
-
-API classes are defined in the 'resonance-miner-api' crate.
-
-**API Spec:
-** [openapi.yaml](https://gitlab.com/resonance-network/backbone/-/blob/b37c4fcdb749ddddc747915b79149e29f537e92f/external-miner/api/openapi.yaml)
-
-1. **Build Node & Miner:**
-   ```bash
-   # From workspace root
-   cargo build --release -p quantus-node
-   ```
-
-2. **Run External Miner:** (In a separate terminal)
-   ```bash
-   git clone https://github.com/Quantus-Network/quantus-miner
-   cd quantus-miner
-   cargo build --release
-   RUST_LOG=info ./target/release/quantus-miner
-   ```
-   *(Listens on `http://127.0.0.1:9833` by default)*
-
-3. **Run Node:** (In another terminal)
-   ```bash
-   # From workspace root (replace <YOUR_REWARDS_ADDRESS>)
-   RUST_LOG=info,sc_consensus_pow=debug ./target/release/quantus-node \
-    --dev \
-    --external-miner-url http://127.0.0.1:9833 \
-    --rewards-address <YOUR_REWARDS_ADDRESS>
-   ```
-
 ## Multinode local run
 
 ---

diff --git a/client/cli/src/commands/generate_node_key.rs b/client/cli/src/commands/generate_node_key.rs
@@ -21,7 +21,7 @@
 use crate::{build_network_key_dir_or_default, Error, NODE_KEY_DILITHIUM_FILE};
 use clap::{Args, Parser};
 use libp2p_identity::PublicKey;
-use qp_rusty_crystals_dilithium::ml_dsa_87::Keypair;
+use qp_rusty_crystals_dilithium::{ml_dsa_87::Keypair, SensitiveBytes32};
 use sc_service::BasePath;
 use sp_core::blake2_256;
 use std::{
@@ -116,8 +116,9 @@ fn generate_key(
 	default_base_path: bool,
 	executable_name: Option<&String>,
 ) -> Result<(), Error> {
-	let hashed_timestamp = hash_current_time_to_hex();
-	let keypair = Keypair::generate(&hashed_timestamp);
+	let mut hashed_timestamp = hash_current_time_to_hex();
+	let entropy = SensitiveBytes32::from(&mut hashed_timestamp);
+	let keypair = Keypair::generate(entropy);
 
 	let file_data = if bin {
 		keypair.to_bytes().to_vec()