How do cryptocurrency exchanges actually utilize HD wallets?
I know HD wallets are now the industry standard. I also understand that “HD” refers to the technology of the wallet itself, so HD wallets can be either omnibus or personal wallets. That said, I don’t understand how this actually works and where the limitations apply. Specifically:
I understand that exchanges may use omnibus wallets for operational efficiency. For example, internal netting can be performed between clients on the omnibus to save on-chain gas costs. However, if each client has its own subkey pair and therefore an address within the omniverse, can cryptocurrencies move to different subkey pairs within the HD wallet? If not, how is internal netting performed? So does this mean I can receive cryptocurrency with 1 subkey pair and merge/send it from another address?
Can the master private key move the cryptocurrency of all child/grandchild key pairs at once? Or does it simply exist as a means to derive child/grandchild private keys?
Do exchanges typically generate a new public key to create an address for each client in the omniverse, or do clients sometimes share the same key pair as well as the entire HD wallet?
If subkey pair A receives 1 BTC and subkey pair 2 receives 2 BTC, then the HD wallet will contain 3 BTC according to the master public key. That means if I want to send 3 BTC in a single transaction, can I do that? So which address will the 3 BTC originate from? (Subkey pair A, subkey pair B, master public key, or new public key?)
Thank you in advance. I appreciate that there are several questions here that may not be well known.
