diff --git a/CHANGELOG.md b/CHANGELOG.md
new file mode 100644
index 0000000..a69e952
--- /dev/null
+++ b/CHANGELOG.md
@@ -0,0 +1,156 @@
+# Changelog
+
+All notable changes to this project will be documented in this file.
+
+The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.1.0/),
+and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0.html).
+
+## [Unreleased]
+
+### Added
+
+- SQLite custom functions for BIP44 derivation
+  - `bip44_derive(pubkey_hex, chain)` - Derive address from any public key
+  - `bip44_derive_from_enclave(enclave_id, chain)` - Derive from stored enclave
+  - Supports: `sonr` (Cosmos 118), `ethereum` (60), `bitcoin` (0)
+- MPC signing via exec handlers
+  - `accounts sign` - Sign with account's enclave
+  - `enclaves sign` - Sign directly with enclave
+- Multi-chain account initialization in `generate()`
+  - Creates accounts for sonr, ethereum, and bitcoin on enclave creation
+
+### Changed
+
+- `generate()` now returns `enclave_id`, `public_key`, and `accounts` array
+- `internal/crypto/mpc/verify.go` simplified to use stdlib instead of external curves package
+
+### Removed
+
+- `internal/enclave/` package (unused encryption layer)
+- `internal/crypto/mpc/utils.go` (dead code)
+
+---
+
+## [0.1.0] - 2025-01
+
+### Added
+
+#### Encryption & Serialization
+
+- `internal/enclave/crypto.go` - WebAuthn PRF key derivation
+  - `DeriveEncryptionKey()` using HKDF with SHA-256
+  - `DeriveKeyWithContext()` for purpose-specific keys
+  - AES-256-GCM encryption/decryption (`Encrypt`, `Decrypt`)
+  - `EncryptBytes()` / `DecryptBytes()` convenience functions
+  - `SecureZero()` for memory clearing
+
+- `internal/enclave/enclave.go` - Encrypted database wrapper
+  - `Enclave` struct wrapping `Keybase` with encryption
+  - `SerializeEncrypted()` / `LoadEncrypted()` methods
+  - `Export()` / `Import()` with `EncryptedBundle`
+  - `FromExisting()` to wrap existing keybase
+
+- `internal/keybase/conn.go` - Native SQLite serialization
+  - `Serialize()` using `serdes.Serialize()` from ncruces/go-sqlite3
+  - `Load()` using `serdes.Deserialize()`
+  - `RestoreFromDump()` for encrypted bundle loading
+
+#### Action Manager Extensions
+
+- `internal/keybase/actions_verification.go`
+  - CreateVerificationMethod, ListVerificationMethodsFull
+  - GetVerificationMethod, DeleteVerificationMethod
+
+- `internal/keybase/actions_service.go`
+  - CreateService, GetServiceByOrigin, GetServiceByID
+  - UpdateService, ListVerifiedServices
+
+- `internal/keybase/actions_grant.go`
+  - CreateGrant, GetGrantByService, UpdateGrantScopes
+  - UpdateGrantLastUsed, SuspendGrant, ReactivateGrant, CountActiveGrants
+
+- `internal/keybase/actions_credential.go`
+  - CreateCredential, UpdateCredentialCounter, RenameCredential
+  - DeleteCredential, CountCredentialsByDID
+
+- `internal/keybase/actions_session.go`
+  - GetSessionByID, GetCurrentSession, UpdateSessionActivity
+  - SetCurrentSession, DeleteExpiredSessions
+
+#### Plugin Exec Handlers
+
+- `key_shares` resource - list, get, rotate, archive, delete
+- `verification_methods` resource - list, get, delete
+- `services` resource - list, get, get_by_id
+
+#### UCAN v1.0.0-rc.1 Database Integration
+
+- `internal/migrations/schema.sql` - v1.0.0-rc.1 tables
+  - `ucan_delegations` - CID-indexed delegation storage with envelope BLOB
+  - `ucan_invocations` - CID-indexed invocation storage with execution tracking
+  - `ucan_revocations` - Revocation records with reason and invocation CID
+  - Updated `grants` table to use `delegation_cid` instead of `ucan_id`
+
+- `internal/migrations/query.sql` - CID-based queries
+  - Delegation CRUD: Create, Get by CID, List by DID/Issuer/Audience/Subject/Command
+  - Invocation CRUD: Create, Get by CID, List by DID/Issuer/Command, Mark executed
+  - Revocation: Create, Check revoked, Get revocation, List by revoker
+
+- `internal/keybase/actions_delegation.go` - Delegation action handlers
+  - StoreDelegation, GetDelegationByCID, GetDelegationEnvelope
+  - ListDelegations, ListDelegationsByIssuer, ListDelegationsByAudience
+  - ListDelegationsForCommand, IsDelegationRevoked, RevokeDelegation
+  - DeleteDelegation, CleanExpiredDelegations
+
+- `internal/keybase/actions_invocation.go` - Invocation action handlers
+  - StoreInvocation, GetInvocationByCID, GetInvocationEnvelope
+  - ListInvocations, ListInvocationsByCommand, ListPendingInvocations
+  - MarkInvocationExecuted, CleanOldInvocations
+
+- `main.go` - Updated exec handlers for v1.0.0-rc.1
+  - `executeUCANAction` uses delegation methods (list, get, revoke, verify, cleanup)
+  - `executeDelegationAction` uses CID-based methods (list by issuer/audience/command)
+  - `validateUCAN` uses `IsDelegationRevoked` instead of old `IsUCANRevoked`
+
+#### UCAN v1.0.0-rc.1 Core
+
+Using `github.com/ucan-wg/go-ucan v1.1.0`:
+
+- Type re-exports from go-ucan (Delegation, Invocation, Command, Policy)
+- Sonr command constants (/vault/*, /did/*, /dwn/*)
+- DelegationBuilder fluent API with Sonr-specific helpers
+- InvocationBuilder fluent API with Sonr-specific helpers
+- PolicyBuilder fluent API with all operators
+- Sonr policy helpers (VaultPolicy, DIDPolicy, ChainPolicy)
+- ValidationError types matching TypeScript definitions
+- Capability, ExecutionResult, and related types
+
+### Removed
+
+#### Deprecated JWT-based UCAN
+
+- `jwt.go` - Old JWT token handling
+- `capability.go` - Old Attenuation/Resource/Capability model
+- `verifier.go` - Old JWT verification
+- `source.go` - Old JWT token creation
+- `internal/crypto/mpc/spec/` - Old MPC JWT integration
+- `github.com/golang-jwt/jwt/v5` dependency
+
+- Old action files:
+  - `internal/keybase/actions_ucan.go` - Old JWT-based UCAN actions
+  - `internal/keybase/actions_delegation.go` - Old ID-based delegation actions
+
+### Deprecated
+
+The following from the old TODO have been superseded by UCAN v1.0.0-rc.1:
+
+- "Token Validation" (JWT parsing) -> Replaced by go-ucan validation
+- "Capability Verification" (`can`/`with` format) -> Replaced by policy evaluation
+- "Proof Chain Validation" (JWT proof strings) -> Replaced by CID-based chain
+- "UCAN Token Actions" (old format) -> Replaced by v1.0.0-rc.1 actions
+- "Delegation Actions" (old model) -> Merged into CID-based actions
+
+The old capability model (`Attenuation`, `Resource`, `Capability` interfaces) is replaced by:
+- `sub` (DID) - Subject of the capability
+- `cmd` (Command) - Action being delegated
+- `pol` (Policy) - Constraints on invocation arguments