I've gotten a couple of questions asking how our key derivation function works. The technique is very similar to that described in RFC 2898, also known as PKCS #5. There are two key derivation functions (KDF) documented in this RFC – PBKDF1 and PBKDF2. Our KDF implementation is very similar to PBKDF1 (section 5.1), with the following changes:
So we're not absolutely using a completely standard KDF, but it's close – and stronger than the standard.