hip-0027

HIP-27: Secrets Management Standard. Status Active. Hanzo's own standard — read this before implementing against it.

HIP-0027: Secrets Management Standard

Abstract

UNRESOLVED — do not build on this HIP's ownership claim. Two files in hanzoai/kms disagree about whether that repo exists: its README.md calls it "a thin Go server ... all server logic lives in luxfi/kms", while DEPRECATED.md in the same repo says hanzoai/kms is deprecated in favour of luxfi/kms outright. This document described a fork of a third-party secrets product, which neither file supports and which we do not run. The wire contract below is still accurate; who owns the implementation is a decision somebody owes.

This proposal defines the secrets management standard for the Hanzo ecosystem, centered on Hanzo KMS at kms.hanzo.ai. Hanzo KMS is a self-hosted fork of the luxfi/kms primitives that provides centralized, auditable, Kubernetes-native secrets management for all Hanzo services. It replaces scattered environment variables, CI/CD secrets, and manual kubectl create secret operations with a single source of truth.

Every secret in the Hanzo ecosystem --- API keys, database credentials, OAuth client secrets, encryption keys --- flows through KMS. Services authenticate via Universal Auth (machine identity with client ID/secret), receive a short-lived bearer token, and fetch secrets at runtime. In Kubernetes, the KMSSecret custom resource automates syncing secrets from KMS into native Secret objects, eliminating human involvement in the secret lifecycle.

Repository: github.com/hanzoai/kms Production: https://kms.hanzo.ai Docker: ghcr.io/hanzoai/kms:latest Cluster: the cluster (24.199.76.156)

Motivation

Before KMS, Hanzo secrets were managed through a patchwork of mechanisms:

  1. Hardcoded in compose files: compose.yml files contained plaintext

credentials. Anyone with repository access could read database passwords.

  1. GitHub Actions secrets: CI/CD credentials lived in GitHub's secret

store, invisible to audit and impossible to rotate without manual updates to every workflow.

  1. Manual kubectl: Operators ran kubectl create secret by hand,

introducing drift between what was deployed and what was documented.

  1. Duplicated across services: The same SQL password appeared in

IAM, Cloud, Console, and Platform deployments --- each copy managed independently.

  1. No audit trail: When a secret was accessed, changed, or leaked, there

was no way to know who did what, when.

These problems compound at scale. With 15+ services on the cluster and growing, manual secrets management became the single largest operational risk.

Design Philosophy

Why our own KMS over HashiCorp Vault

HashiCorp Vault is the industry default for secrets management, but it carries significant operational overhead:

deployment, OOM kill) requires unseal keys. In a two-replica K8s deployment, this means manual intervention or complex auto-unseal configurations with cloud KMS --- defeating the purpose of self-hosting.

Both add operational surfaces. Consul alone is a distributed system that needs its own monitoring, backup, and upgrade procedures.

language that developers must learn. Access control requires writing and deploying policy files.

operators. Developers adding a new API key must understand mount paths, engines, and policy bindings.

The design was chosen because:

in a web interface that resembles a .env file editor. No learning curve.

environment > folder > key-value, which maps directly to our dev/staging/ production workflow.

database credentials and API keys without external tooling.

KMSSecret CRD (live in two groups today, kmssecrets.secrets.lux.network and kmssecrets.kms.hanzo.ai; universe declares the former) under the secrets.lux.network API group) for native K8s integration.

and modification. We fork, rebrand, and deploy without vendor lock-in.

SQL and KV backends --- the same infrastructure we already operate for other services.

Why Not AWS Secrets Manager or GCP Secret Manager

Cloud-managed secret services (AWS Secrets Manager, GCP Secret Manager, Azure Key Vault) are excellent --- for workloads that will never leave that cloud. Hanzo's infrastructure has specific constraints:

We may move to bare metal, Hetzner, or a different cloud provider. Managed secret services are inherently cloud-locked: AWS Secrets Manager is only accessible from AWS networks without complex VPN/peering configurations.

$0.05 per 10,000 API calls. With 200+ secrets across environments and services polling every 60 seconds, costs become non-trivial and unpredictable.

whether running in K8s, in CI/CD, or on a developer's laptop --- uses the same HTTPS API. No IAM roles, service accounts, or cloud-specific SDKs required.

that encryption keys and credentials never leave infrastructure we control. Self-hosted KMS satisfies this requirement.

Why the KMSSecret CRD

Kubernetes-native secret sync via Custom Resource Definitions eliminates the most error-prone step in the secret lifecycle: getting secrets from the source of truth into the cluster where workloads consume them.

Without the CRD, the workflow is:

  1. Operator adds secret to KMS UI
  2. Operator runs kubectl create secret with the new value
  3. Operator restarts the affected deployment
  4. Hope that step 2 was not forgotten, typo-free, and applied to the

correct namespace

With the CRD, the workflow is:

  1. Operator adds secret to KMS UI
  2. The KMS Operator detects the change within resyncInterval seconds
  3. The K8s Secret is updated automatically
  4. Workloads consuming the secret via envFrom or valueFrom pick up

the change on next pod restart (or immediately if using mounted volumes)

Steps 2-4 are automated. No human in the loop after step 1.

Specification

Secret Organization Model

Secrets in KMS are organized hierarchically:

Organization
  └── Project
        └── Environment
              └── Folder
                    └── Key = Value

Organizations

Top-level organizational boundary. Maps to Hanzo business units:

| Organization | Purpose | |-------------|---------| | hanzo | Hanzo AI core services | | lux | Lux blockchain infrastructure | | zoo | Zoo Labs Foundation services | | pars | Pars network services |

Projects

Each deployable service gets its own project. This provides:

Current projects in production:

| Project Slug | Service | Secret Count | |-------------|---------|-------------| | hanzo-iam | IAM (hanzo.id) | 23 | | gateway | LLM Gateway (llm.hanzo.ai) | 12 | | chat | Hanzo Chat | 8 | | cloud | Hanzo Cloud | 15 | | console | Console (console.hanzo.ai) | 10 | | commerce | Commerce API | 8 | | platform | PaaS Platform | 14 | | bootnode | Bootnode API | 6 | | flow | Workflow Engine | 9 | | zen | Zen Model Serving | 7 |

Environments

Standard environment slugs. Every project MUST have these:

| Slug | Purpose | Access Level | |------|---------|-------------| | dev | Local development | All developers | | staging | Pre-production testing | Dev team + CI | | prod / production | Live services | CI + service identities only |

Folders

Optional sub-grouping within environments. Used for organizing large projects. Example: /database/, /api-keys/, /oauth/.

Universal Auth Flow

Universal Auth is the sole machine-to-machine authentication method. Every service that needs secrets authenticates through this flow.

Step 1: Login

POST https://kms.hanzo.ai/api/v1/auth/universal-auth/login
Content-Type: application/json

{
  "clientId": "31052e02-d1d6-4846-8c8f-3fb1efe90e3b",
  "clientSecret": "st.abc123..."
}

Response:

{
  "accessToken": "eyJhbGciOiJIUzI1NiIs...",
  "expiresIn": 7200,
  "accessTokenMaxTTL": 7200,
  "tokenType": "Bearer"
}

Step 2: Fetch Secrets

GET https://kms.hanzo.ai/api/v3/secrets/raw?environment=prod&workspaceSlug=hanzo-iam&secretPath=/
Authorization: Bearer eyJhbGciOiJIUzI1NiIs...

Response:

{
  "secrets": [
    {
      "secretKey": "DATABASE_URL",
      "secretValue": "postgresql://...",
      "type": "shared",
      "version": 3
    },
    {
      "secretKey": "REDIS_URL",
      "secretValue": "redis://...",
      "type": "shared",
      "version": 1
    }
  ]
}

Step 3: Use Secrets

The service injects fetched values into its runtime configuration. Secrets MUST NOT be written to disk, logged, or cached beyond the current process lifetime.

Machine Identity Lifecycle

Each service is represented by a Machine Identity in KMS. The identity lifecycle follows these steps:

  1. Create Identity: In the KMS UI, create a Machine Identity with a

descriptive name (e.g., iam-service, gateway-service).

  1. Enable Universal Auth: Attach Universal Auth credentials to the

identity. KMS generates a clientId and clientSecret.

  1. Grant Project Access: Assign the identity to the relevant project

with the minimum required role (typically Viewer for read-only secret access).

  1. Bootstrap Credentials: Store the clientId and clientSecret in

the target environment (K8s secret, CI/CD variable, etc.).

  1. Rotate Periodically: Regenerate the clientSecret and update the

bootstrap credential. The clientId remains stable.

KMSSecret Custom Resource Definition

The KMSSecret CRD is the Kubernetes-native interface for syncing secrets from KMS into the cluster.

API Group and Version

apiVersion: secrets.lux.network/v1alpha1
kind: KMSSecret

Full Specification

apiVersion: secrets.lux.network/v1alpha1
kind: KMSSecret
metadata:
  name: <service>-kms-sync
  namespace: hanzo
  labels:
    app.kubernetes.io/name: <service>
    app.kubernetes.io/component: secrets
    app.kubernetes.io/part-of: hanzo-universe
spec:
  # KMS API endpoint
  hostAPI: https://kms.hanzo.ai

  # How often (in seconds) to re-sync secrets from KMS
  # Lower values = faster propagation, higher API load
  # Recommended: 60 for production, 30 for staging
  resyncInterval: 60

  # Authentication configuration
  authentication:
    universalAuth:
      credentialsRef:
        # K8s Secret containing clientId and clientSecret
        secretName: <service>-kms-auth
        secretNamespace: hanzo
      secretsScope:
        # KMS project slug
        projectSlug: <project-slug>
        # KMS environment slug
        envSlug: production
        # Path within the environment
        secretsPath: /

  # Target K8s Secret to create/update
  managedSecretReference:
    secretName: <service>-secrets
    secretNamespace: hanzo
    secretType: Opaque

Bootstrap Secret

Every KMSSecret resource references a bootstrap secret containing the Machine Identity credentials. This is the ONE secret that must be created manually:

kubectl create secret generic <service>-kms-auth \
  --from-literal=clientId=<machine-identity-client-id> \
  --from-literal=clientSecret=<machine-identity-client-secret> \
  --dry-run=client -o yaml | kubectl apply -f -

This is an intentional design constraint. The bootstrap secret is a "root of trust" --- it cannot be managed by the system it bootstraps.

CI/CD Integration

GitHub Actions Pattern

Services that deploy via GitHub Actions fetch secrets at workflow runtime instead of storing them as GitHub Actions secrets.

name: Deploy
on:
  push:
    branches: [main]

jobs:
  deploy:
    runs-on: ubuntu-latest
    steps:
      - name: Authenticate with KMS
        id: kms-auth
        run: |
          TOKEN=$(curl -s -X POST \
            https://kms.hanzo.ai/api/v1/auth/universal-auth/login \
            -H "Content-Type: application/json" \
            -d "{\"clientId\":\"${{ secrets.KMS_CLIENT_ID }}\",\"clientSecret\":\"${{ secrets.KMS_CLIENT_SECRET }}\"}" \
            | jq -r '.accessToken')
          echo "::add-mask::$TOKEN"
          echo "token=$TOKEN" >> $GITHUB_OUTPUT

      - name: Fetch deployment secrets
        run: |
          SECRETS=$(curl -s \
            "https://kms.hanzo.ai/api/v3/secrets/raw?environment=prod&workspaceSlug=my-service&secretPath=/" \
            -H "Authorization: Bearer ${{ steps.kms-auth.outputs.token }}")

          # Extract individual secrets
          echo "DOCKERHUB_USERNAME=$(echo $SECRETS | jq -r '.secrets[] | select(.secretKey=="DOCKERHUB_USERNAME") | .secretValue')" >> $GITHUB_ENV
          echo "::add-mask::$(echo $SECRETS | jq -r '.secrets[] | select(.secretKey=="DOCKERHUB_TOKEN") | .secretValue')"
          echo "DOCKERHUB_TOKEN=$(echo $SECRETS | jq -r '.secrets[] | select(.secretKey=="DOCKERHUB_TOKEN") | .secretValue')" >> $GITHUB_ENV

Note: KMS_CLIENT_ID and KMS_CLIENT_SECRET are the only two values stored as GitHub Actions secrets. All other credentials are fetched from KMS at runtime. This reduces the GitHub secret surface from dozens of secrets per repository to exactly two.

SDK Integration

For services that fetch secrets programmatically at startup:

// Go - using luxfi/kms-go SDK
import "github.com/luxfi/kms-go/sdk"

client := sdk.NewClient(sdk.Config{
    SiteURL:      "https://kms.hanzo.ai",
    ClientID:     os.Getenv("KMS_CLIENT_ID"),
    ClientSecret: os.Getenv("KMS_CLIENT_SECRET"),
})

secrets, err := client.ListSecrets(sdk.ListSecretsOptions{
    ProjectSlug: "hanzo-iam",
    Environment: "prod",
    SecretPath:  "/",
})
if err != nil {
    log.Fatalf("failed to fetch secrets from KMS: %v", err)
}

for _, s := range secrets {
    os.Setenv(s.SecretKey, s.SecretValue)
}

Secret Rotation Policy

| Secret Type | Rotation Frequency | Method | |------------|-------------------|--------| | Database passwords | 90 days | KMS auto-rotation | | API keys (third-party) | 90 days | Manual + KMS update | | OAuth client secrets | 180 days | Coordinated with IAM | | Encryption keys | 365 days | Key versioning | | Machine Identity secrets | 180 days | KMS regenerate | | JWT signing keys | 90 days | Rolling deployment |

Audit Logging

KMS logs every secret access with:

Audit logs are retained for 365 days and are queryable via the KMS API:

GET /api/v1/audit-logs?projectId=<id>&startDate=2025-01-01&endDate=2025-01-31
Authorization: Bearer <admin-token>

Implementation

Production Architecture

┌─────────────────────────────────────────────────────────┐
│                   Kubernetes cluster                    │
│                                                         │
│  ┌───────────┐     ┌────────────────┐                   │
│  │ KMS (x2)  │────▶│ SQL            │                   │
│  │ port 8080 │     │ (kms database) │                   │
│  └─────┬─────┘     └────────────────┘                   │
│        │                                                │
│        │           ┌────────────────┐                   │
│        └──────────▶│ KV             │                   │
│                    │ (session/cache)│                   │
│                    └────────────────┘                   │
│                                                         │
│  ┌──────────────────┐                                   │
│  │ KMS Operator      │    watches KMSSecret CRDs        │
│  │ (kms-operator)    │───▶ syncs to K8s Secrets         │
│  └──────────────────┘                                   │
│                                                         │
│  ┌──────────┐ ┌──────────┐ ┌──────────┐ ┌──────────┐   │
│  │   IAM    │ │ Gateway  │ │   Chat   │ │  Cloud   │   │
│  │ (reads)  │ │ (reads)  │ │ (reads)  │ │ (reads)  │   │
│  └──────────┘ └──────────┘ └──────────┘ └──────────┘   │
└─────────────────────────────────────────────────────────┘
          ▲
          │ HTTPS (port 443 via Ingress)
          │
    ┌─────┴──────┐
    │ CI/CD      │  GitHub Actions, developer laptops
    │ (reads)    │
    └────────────┘

Deployment Specification

KMS runs as a Deployment with 2 replicas for high availability:

spec:
  replicas: 2
  strategy:
    type: RollingUpdate
    rollingUpdate:
      maxSurge: 1
      maxUnavailable: 0

Pod anti-affinity ensures replicas land on different nodes:

affinity:
  podAntiAffinity:
    preferredDuringSchedulingIgnoredDuringExecution:
    - weight: 100
      podAffinityTerm:
        labelSelector:
          matchExpressions:
          - key: app
            operator: In
            values: ["kms"]
        topologyKey: kubernetes.io/hostname

Helm Chart: kms-standalone

The kms-standalone Helm chart supports automated bootstrap:

kms:
  autoBootstrap:
    enabled: true
    # Create additional organizations beyond the default
    additionalOrganizations:
      - hanzo
      - lux
      - zoo
      - pars
    # Grant org-admin to these emails during org creation
    additionalOrganizationAdminEmails:
      - z@hanzo.ai
    # Secret template key for bootstrap token
    additionalOrganizationsTokenSecretKey: token

This ensures that on first deployment, all four organizations exist and the specified admin has access across all of them.

Resource Requirements

resources:
  requests:
    memory: "512Mi"
    cpu: "250m"
  limits:
    memory: "2Gi"
    cpu: "1000m"

Health Checks

readinessProbe:
  httpGet:
    path: /api/status
    port: 8080
  initialDelaySeconds: 60
  periodSeconds: 10

livenessProbe:
  httpGet:
    path: /api/status
    port: 8080
  initialDelaySeconds: 120
  periodSeconds: 30

KMS's Own Secrets (Bootstrap Problem)

KMS itself requires secrets to operate: ROOT_ENCRYPTION_KEY, AUTH_SECRET, DB_CONNECTION_URI, REDIS_URL. These cannot be stored in KMS (circular dependency). They are stored as a standard K8s Secret named kms-secrets, created once during initial cluster provisioning and documented in a secure offline location.

This is the irreducible bootstrap dependency. Every secrets management system has one. We acknowledge it explicitly rather than hiding it.

Security

Threat Model

| Threat | Mitigation | |--------|-----------| | Compromised service identity | Scoped to single project; revoke identity immediately | | KMS database breach | All secrets encrypted at rest with ROOT_ENCRYPTION_KEY (AES-256-GCM) | | Network interception | All communication over HTTPS with TLS 1.3 | | Insider threat | Audit logs capture all access; role-based access control | | KMS service compromise | Two replicas on separate nodes; encrypted backups | | Leaked bearer token | Tokens expire after 7200s; IP allowlisting available | | Git secret leak | Secrets never exist in git; KMS is sole source of truth | | CI/CD secret exfiltration | Only KMS_CLIENT_ID and KMS_CLIENT_SECRET in CI; short-lived tokens |

Zero-Trust Principles

  1. Every service authenticates independently: No shared credentials

between services. IAM has its own Machine Identity; Gateway has its own. Compromising one does not compromise another.

  1. Minimum privilege: Machine Identities get Viewer role (read-only)

on their specific project. No service can read another service's secrets.

  1. No implicit trust: Even services within the same K8s namespace must

authenticate with KMS. Network proximity grants no privilege.

  1. Short-lived credentials: Bearer tokens expire. Even if captured from

a log or network trace, they become useless within hours.

Encryption

The ROOT_ENCRYPTION_KEY is a 256-bit key generated during initial setup and stored as a K8s Secret.

terminates TLS with a certificate from Let's Encrypt (via cert-manager).

application process memory during request handling. They are not cached in KV or written to temporary files.

Compliance Mapping

| Framework | Requirement | How KMS Satisfies | |-----------|------------|-------------------| | SOC 2 CC6.1 | Logical access security | Machine Identity auth, RBAC | | SOC 2 CC6.3 | Access revocation | Identity deletion, token expiry | | SOC 2 CC7.2 | System monitoring | Audit logs, access tracking | | HIPAA 164.312(a) | Access control | Per-project isolation, RBAC | | HIPAA 164.312(e) | Transmission security | TLS 1.3 | | GDPR Art. 32 | Security of processing | AES-256-GCM, audit trail | | PCI DSS 3.4 | Render PAN unreadable | Encryption at rest |

# compose.yml - DO NOT DO THIS
environment:
  DATABASE_URL: "postgresql://user:password@host:5432/db"
  API_KEY: "sk-live-abc123"

After (KMS-backed):

# compose.yml
environment:
  KMS_CLIENT_ID: "${KMS_CLIENT_ID}"
  KMS_CLIENT_SECRET: "${KMS_CLIENT_SECRET}"
# Service fetches all other secrets from KMS at startup

From GitHub Actions Secrets

Before (many secrets):

env:
  DOCKERHUB_USERNAME: ${{ secrets.DOCKERHUB_USERNAME }}
  DOCKERHUB_TOKEN: ${{ secrets.DOCKERHUB_TOKEN }}
  DO_ACCESS_TOKEN: ${{ secrets.DIGITALOCEAN_ACCESS_TOKEN }}
  DATABASE_URL: ${{ secrets.DATABASE_URL }}
  REDIS_URL: ${{ secrets.REDIS_URL }}

After (two secrets):

env:
  KMS_CLIENT_ID: ${{ secrets.KMS_CLIENT_ID }}
  KMS_CLIENT_SECRET: ${{ secrets.KMS_CLIENT_SECRET }}
# Fetch everything else from KMS at runtime

From kubectl create secret

Before (manual, error-prone):

kubectl create secret generic my-service-secrets \
  --from-literal=DB_URL=postgresql://... \
  --from-literal=API_KEY=sk-... \
  --from-literal=REDIS_URL=redis://...

After (automated):

# Apply once:
apiVersion: secrets.lux.network/v1alpha1
kind: KMSSecret
metadata:
  name: my-service-kms-sync
  namespace: hanzo
spec:
  hostAPI: https://kms.hanzo.ai
  resyncInterval: 60
  authentication:
    universalAuth:
      credentialsRef:
        secretName: my-service-kms-auth
        secretNamespace: hanzo
      secretsScope:
        projectSlug: my-service
        envSlug: production
        secretsPath: /
  managedSecretReference:
    secretName: my-service-secrets
    secretNamespace: hanzo
    secretType: Opaque
# Secrets auto-sync every 60 seconds. No manual steps.

Operational Procedures

Adding a New Service to KMS

  1. Create a project in KMS UI (kms.hanzo.ai) with slug matching the

service name.

  1. Add environments: dev, staging, production.
  2. Add all secret key-value pairs to each environment.
  3. Create a Machine Identity named <service>-service.
  4. Enable Universal Auth on the identity.
  5. Grant the identity Viewer role on the project.
  6. Create the bootstrap K8s secret:

``bash kubectl create secret generic <service>-kms-auth \ --from-literal=clientId=<id> \ --from-literal=clientSecret=<secret> \ --dry-run=client -o yaml | kubectl apply -f - ``

  1. Apply the KMSSecret resource (see specification above).
  2. Verify sync: kubectl get secret <service>-secrets -o yaml

Rotating a Machine Identity Secret

  1. In KMS UI, navigate to the Machine Identity.
  2. Regenerate the client secret (old secret remains valid for a grace

period).

  1. Update the bootstrap K8s secret:

``bash kubectl create secret generic <service>-kms-auth \ --from-literal=clientId=<id> \ --from-literal=clientSecret=<new-secret> \ --dry-run=client -o yaml | kubectl apply -f - ``

  1. The KMS Operator will use the new credentials on next resync cycle.
  2. Verify by checking operator logs for successful sync.

Emergency Secret Revocation

If a secret is suspected compromised:

  1. Rotate the secret value in KMS UI immediately.
  2. Revoke the Machine Identity if the identity credentials were

compromised (not just the secret value).

  1. Force resync by deleting and re-creating the KMSSecret resource.
  2. Restart affected pods to pick up the new K8s Secret values:

``bash kubectl rollout restart deployment/<service> ``

  1. Review audit logs to determine the scope of the breach.

References

  1. luxfi/kms -- the primitives all server logic lives in
  2. HIP-5: Post-Quantum Security for AI Infrastructure
  3. HIP-4: LLM Gateway
  4. NIST SP 800-57: Key Management
  5. Kubernetes Secrets Best Practices
  6. SOC 2 Trust Services Criteria

Copyright

Copyright and related rights waived via CC0.