Extended private keys are defined in BIP32¹ and are used to recover funds in case of a loss, but recovering a wallet using just the extended private keys is a tricky process and can sometimes fail to recover all the funds as some metadata can be missing. The current implemenation also has a weakness in which there is a limit to the incoming payment requests, handing out more than 20 incoming payment requests could lead to destruction of funds.

To remedy this issue, an early draft of a new serialization/encoding format for extended public and private keys was proposed on the Bitcoin-dev channel.