diff --git a/packages/app-extension/src/components/Onboarding/pages/CreateOrImportWallet.tsx b/packages/app-extension/src/components/Onboarding/pages/CreateOrImportWallet.tsx
index c932dba33..89c8c798e 100644
--- a/packages/app-extension/src/components/Onboarding/pages/CreateOrImportWallet.tsx
+++ b/packages/app-extension/src/components/Onboarding/pages/CreateOrImportWallet.tsx
@@ -1,4 +1,4 @@
-import { PrimaryButton } from "@coral-xyz/tamagui";
+import { PrimaryButton } from "@coral-xyz/react-common";
 import { Box } from "@mui/material";
 
 import { SubtextParagraph } from "../../common";
@@ -31,7 +31,7 @@ export const CreateOrImportWallet = ({
         <Box sx={{ mb: "16px" }}>
           <PrimaryButton
             label="Create a new wallet"
-            onPress={() => onNext("create")}
+            onClick={() => onNext("create")}
           />
         </Box>
         <SubtextParagraph onClick={() => onNext("import")}>
diff --git a/packages/app-extension/src/components/Onboarding/pages/KeyringTypeSelector.tsx b/packages/app-extension/src/components/Onboarding/pages/KeyringTypeSelector.tsx
index 0288635cf..7563e3fbb 100644
--- a/packages/app-extension/src/components/Onboarding/pages/KeyringTypeSelector.tsx
+++ b/packages/app-extension/src/components/Onboarding/pages/KeyringTypeSelector.tsx
@@ -1,6 +1,11 @@
+import { useState } from "react";
 import type { KeyringType } from "@coral-xyz/common";
 import { toTitleCase } from "@coral-xyz/common";
-import { HardwareWalletIcon, PrimaryButton } from "@coral-xyz/react-common";
+import {
+  HardwareWalletIcon,
+  PrimaryButton,
+  SecondaryButton,
+} from "@coral-xyz/react-common";
 import { Box } from "@mui/material";
 
 import { Header, HeaderIcon, SubtextParagraph } from "../../common";
@@ -12,6 +17,7 @@ export const KeyringTypeSelector = ({
   action: "create" | "import" | "recover" | string;
   onNext: (keyringType: KeyringType) => void;
 }) => {
+  const [showAdvancedOptions, setShowAdvancedOptions] = useState(false);
   return (
     <div
       style={{
@@ -58,23 +64,39 @@ export const KeyringTypeSelector = ({
       >
         <Box style={{ marginBottom: "16px" }}>
           <PrimaryButton
-            label={`${toTitleCase(action)} with recovery phrase`}
+            label={`${toTitleCase(action)} with secret phrase`}
             onClick={() => onNext("mnemonic")}
           />
         </Box>
-        {action === "import" || action === "recover" ? (
-          <Box style={{ marginBottom: "16px" }}>
-            <PrimaryButton
-              label={`${toTitleCase(action)} with private key`}
-              onClick={() => onNext("private-key")}
-            />
-          </Box>
-        ) : null}
-        <SubtextParagraph onClick={() => onNext("ledger")}>
-          {action === "recover"
-            ? "Recover using a hardware wallet"
-            : "I have a hardware wallet"}
-        </SubtextParagraph>
+        {showAdvancedOptions ? (
+          <>
+            {action === "import" || action === "recover" ? (
+              <Box style={{ marginBottom: "16px" }}>
+                <SecondaryButton
+                  label={`${toTitleCase(action)} with private key`}
+                  onClick={() => onNext("private-key")}
+                />
+              </Box>
+            ) : null}
+            <Box style={{ marginBottom: "16px" }}>
+              <SecondaryButton
+                label={
+                  action === "recover"
+                    ? "Recover with hardware wallet"
+                    : "I have a hardware wallet"
+                }
+                onClick={() => onNext("ledger")}
+              />
+            </Box>
+            <SubtextParagraph onClick={() => setShowAdvancedOptions(false)}>
+              Hide advanced options
+            </SubtextParagraph>
+          </>
+        ) : (
+          <SubtextParagraph onClick={() => setShowAdvancedOptions(true)}>
+            Show advanced options
+          </SubtextParagraph>
+        )}
       </Box>
     </div>
   );
diff --git a/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/CreateMnemonic.tsx b/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/CreateMnemonic.tsx
index 285196853..6a0a99b57 100644
--- a/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/CreateMnemonic.tsx
+++ b/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/CreateMnemonic.tsx
@@ -47,11 +47,9 @@ export function CreateOrImportMnemonic({
     },
     "Import recovery phrase": {
       onClick: () =>
-        nav.push("import-from-mnemonic", {
+        nav.push("set-and-sync-mnemonic", {
           blockchain,
           keyringExists,
-          forceSetMnemonic: true,
-          inputMnemonic: true,
         }),
       icon: (props: any) => <ImportedIcon {...props} />,
       detailIcon: <PushDetail />,
diff --git a/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/ImportMnemonic.tsx b/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/ImportMnemonic.tsx
index 910fe764c..0eb189413 100644
--- a/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/ImportMnemonic.tsx
+++ b/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/ImportMnemonic.tsx
@@ -11,11 +11,16 @@ import {
   UI_RPC_METHOD_KEYRING_IMPORT_SECRET_KEY,
   UI_RPC_METHOD_KEYRING_IMPORT_WALLET,
   UI_RPC_METHOD_KEYRING_SET_MNEMONIC,
+  UI_RPC_METHOD_KEYRING_STORE_MNEMONIC_SYNC,
 } from "@coral-xyz/common";
-import { PrimaryButton, TextInput } from "@coral-xyz/react-common";
-import { useBackgroundClient, useRpcRequests } from "@coral-xyz/recoil";
+import { CheckIcon, PrimaryButton, TextInput } from "@coral-xyz/react-common";
+import {
+  useBackgroundClient,
+  useDehydratedWallets,
+  useRpcRequests,
+} from "@coral-xyz/recoil";
 import { useCustomTheme } from "@coral-xyz/themes";
-import { Box } from "@mui/material";
+import { Box, Typography } from "@mui/material";
 
 import { useSteps } from "../../../../hooks/useSteps";
 import { Header } from "../../../common";
@@ -29,6 +34,103 @@ import { useNavigation } from "../../../common/Layout/NavStack";
 
 import { ConfirmCreateWallet } from "./";
 
+// WARNING: this will force set the mnemonic. Only use this if no mnemonic
+//          exists.
+export function ImportMnemonicAutomatic() {
+  const background = useBackgroundClient();
+  const dehydratedWallets = useDehydratedWallets();
+  const [openDrawer, setOpenDrawer] = useState(false);
+  const { close } = useDrawerContext();
+
+  const onSync = async (mnemonic: string) => {
+    await background.request({
+      method: UI_RPC_METHOD_KEYRING_SET_MNEMONIC,
+      params: [mnemonic],
+    });
+    if (dehydratedWallets.length > 0) {
+      await background.request({
+        method: UI_RPC_METHOD_KEYRING_STORE_MNEMONIC_SYNC,
+        params: [dehydratedWallets],
+      });
+    }
+  };
+
+  return (
+    <>
+      <MnemonicInput
+        key="MnemonicInput"
+        buttonLabel="Import"
+        onNext={async (mnemonic) => {
+          onSync(mnemonic);
+          setOpenDrawer(true);
+        }}
+      />
+      <WithMiniDrawer
+        openDrawer={openDrawer}
+        setOpenDrawer={(isOpen: boolean) => {
+          setOpenDrawer(isOpen);
+          if (!isOpen) {
+            close();
+          }
+        }}
+        backdropProps={{
+          style: {
+            opacity: 0.8,
+            background: "#18181b",
+          },
+        }}
+      >
+        <ConfirmWalletSync
+          onClose={() => {
+            setOpenDrawer(false);
+            close();
+          }}
+        />
+      </WithMiniDrawer>
+    </>
+  );
+}
+
+export const ConfirmWalletSync = ({ onClose }: { onClose: () => void }) => {
+  const theme = useCustomTheme();
+  return (
+    <div
+      style={{
+        height: "232px",
+        backgroundColor: theme.custom.colors.bg2,
+        padding: "16px",
+        display: "flex",
+        flexDirection: "column",
+        justifyContent: "space-between",
+      }}
+    >
+      <div>
+        <Typography
+          style={{
+            marginTop: "16px",
+            textAlign: "center",
+            fontWeight: 500,
+            fontSize: "18px",
+            lineHeight: "24px",
+            color: theme.custom.colors.fontColor,
+          }}
+        >
+          Recovery Phrase Set
+        </Typography>
+        <div
+          style={{
+            textAlign: "center",
+            marginTop: "24px",
+          }}
+        >
+          <CheckIcon />
+        </div>
+      </div>
+      <PrimaryButton label="Done" onClick={() => onClose()} />
+    </div>
+  );
+};
+
 export function ImportMnemonic({
   blockchain,
   keyringExists,
@@ -48,6 +150,7 @@ export function ImportMnemonic({
   const { step, nextStep } = useSteps();
   const { close: closeParentDrawer } = useDrawerContext();
   const { signMessageForWallet } = useRpcRequests();
+  const dehydratedWallets = useDehydratedWallets();
 
   const [openDrawer, setOpenDrawer] = useState(false);
   const [mnemonic, setMnemonic] = useState<string | true>(true);
@@ -78,6 +181,15 @@ export function ImportMnemonic({
         method: UI_RPC_METHOD_KEYRING_IMPORT_WALLET,
         params: [signedWalletDescriptor],
       });
+      const walletsToSync = dehydratedWallets.filter(
+        (w) => w.publicKey !== publicKey
+      );
+      if (walletsToSync.length > 0) {
+        await background.request({
+          method: UI_RPC_METHOD_KEYRING_STORE_MNEMONIC_SYNC,
+          params: [walletsToSync],
+        });
+      }
     } else {
       if (!inputMnemonic) {
         if (keyringExists) {
diff --git a/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/index.tsx b/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/index.tsx
index 3f3059bbb..6bba0cad1 100644
--- a/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/index.tsx
+++ b/packages/app-extension/src/components/Unlocked/Settings/AddConnectWallet/index.tsx
@@ -10,6 +10,7 @@ import {
   UI_RPC_METHOD_KEYRING_IMPORT_WALLET,
 } from "@coral-xyz/common";
 import {
+  BackpackMnemonicIcon,
   CheckIcon,
   HardwareIcon,
   ImportedIcon,
@@ -24,6 +25,7 @@ import {
 import {
   useAvatarUrl,
   useBackgroundClient,
+  useEnabledBlockchains,
   useKeyringHasMnemonic,
   useRpcRequests,
   useUser,
@@ -191,64 +193,58 @@ export function AddWalletMenu({ blockchain }: { blockchain: Blockchain }) {
     if (loading) {
       return;
     }
-    if (hasMnemonic) {
-      setOpenDrawer(true);
-      setLoading(true);
-      let newPublicKey;
-      if (!keyringExists || !hasHdPublicKeys) {
-        // No keyring or no existing mnemonic public keys so can't derive next
-        const walletDescriptor = await background.request({
-          method: UI_RPC_METHOD_FIND_WALLET_DESCRIPTOR,
-          params: [blockchain, 0],
-        });
-        const signature = await signMessageForWallet(
-          blockchain,
-          walletDescriptor.publicKey,
-          getAddMessage(walletDescriptor.publicKey),
-          {
-            mnemonic: true,
-            signedWalletDescriptors: [
-              {
-                ...walletDescriptor,
-                signature: "",
-              },
-            ],
-          }
-        );
-        const signedWalletDescriptor = { ...walletDescriptor, signature };
-        if (!keyringExists) {
-          // Keyring doesn't exist, create it
-          await background.request({
-            method: UI_RPC_METHOD_BLOCKCHAIN_KEYRINGS_ADD,
-            params: [
-              {
-                mnemonic: true, // Use the existing mnemonic
-                signedWalletDescriptors: [signedWalletDescriptor],
-              },
-            ],
-          });
-        } else {
-          // Keyring exists but the hd keyring is not initialised, import
-          await background.request({
-            method: UI_RPC_METHOD_KEYRING_IMPORT_WALLET,
-            params: [signedWalletDescriptor],
-          });
+
+    setOpenDrawer(true);
+    setLoading(true);
+    let newPublicKey;
+    if (!keyringExists || !hasHdPublicKeys) {
+      // No keyring or no existing mnemonic public keys so can't derive next
+      const walletDescriptor = await background.request({
+        method: UI_RPC_METHOD_FIND_WALLET_DESCRIPTOR,
+        params: [blockchain, 0],
+      });
+      const signature = await signMessageForWallet(
+        blockchain,
+        walletDescriptor.publicKey,
+        getAddMessage(walletDescriptor.publicKey),
+        {
+          mnemonic: true,
+          signedWalletDescriptors: [
+            {
+              ...walletDescriptor,
+              signature: "",
+            },
+          ],
         }
-        newPublicKey = walletDescriptor.publicKey;
+      );
+      const signedWalletDescriptor = { ...walletDescriptor, signature };
+      if (!keyringExists) {
+        // Keyring doesn't exist, create it
+        await background.request({
+          method: UI_RPC_METHOD_BLOCKCHAIN_KEYRINGS_ADD,
+          params: [
+            {
+              mnemonic: true, // Use the existing mnemonic
+              signedWalletDescriptors: [signedWalletDescriptor],
+            },
+          ],
+        });
       } else {
-        newPublicKey = await background.request({
-          method: UI_RPC_METHOD_KEYRING_DERIVE_WALLET,
-          params: [blockchain],
+        // Keyring exists but the hd keyring is not initialised, import
+        await background.request({
+          method: UI_RPC_METHOD_KEYRING_IMPORT_WALLET,
+          params: [signedWalletDescriptor],
         });
       }
-      setNewPublicKey(newPublicKey);
-      setLoading(false);
+      newPublicKey = walletDescriptor.publicKey;
     } else {
-      nav.push("create-or-import-mnemonic", {
-        blockchain,
-        keyringExists,
+      newPublicKey = await background.request({
+        method: UI_RPC_METHOD_KEYRING_DERIVE_WALLET,
+        params: [blockchain],
       });
     }
+    setNewPublicKey(newPublicKey);
+    setLoading(false);
   };
 
   return (
@@ -268,8 +264,14 @@ export function AddWalletMenu({ blockchain }: { blockchain: Blockchain }) {
         </Box>
         <SettingsList
           menuItems={{
-            "Create a new wallet": {
-              onClick: () => createNewWithPhrase(),
+            [hasMnemonic ? "Create a new wallet" : "Setup recovery phrase"]: {
+              onClick: () =>
+                hasMnemonic
+                  ? createNewWithPhrase()
+                  : nav.push("create-or-import-mnemonic", {
+                      blockchain,
+                      keyringExists,
+                    }),
               icon: (props: any) => <PlusCircleIcon {...props} />,
             },
             "Advanced wallet import": {
@@ -316,22 +318,16 @@ export function RecoverWalletMenu({
   publicKey: string;
 }) {
   const nav = useNavigation();
+  const enabledBlockchains = useEnabledBlockchains();
+  const keyringExists = enabledBlockchains.includes(blockchain);
 
   const recoverMenu = {
-    "Hardware wallet": {
-      onClick: () => {
-        openConnectHardware(blockchain, "search", publicKey);
-        window.close();
-      },
-      icon: (props: any) => <HardwareIcon {...props} />,
-      detailIcon: <PushDetail />,
-    },
     "Other recovery phrase": {
       onClick: () =>
         nav.push("import-from-mnemonic", {
           blockchain,
           inputMnemonic: true,
-          keyringExists: true,
+          keyringExists,
           publicKey,
         }),
       icon: (props: any) => <MnemonicIcon {...props} />,
@@ -346,6 +342,14 @@ export function RecoverWalletMenu({
       icon: (props: any) => <PlusCircleIcon {...props} />,
       detailIcon: <PushDetail />,
     },
+    "Hardware wallet": {
+      onClick: () => {
+        openConnectHardware(blockchain, "search", publicKey);
+        window.close();
+      },
+      icon: (props: any) => <HardwareIcon {...props} />,
+      detailIcon: <PushDetail />,
+    },
   };
 
   return (
diff --git a/packages/app-extension/src/components/Unlocked/Settings/SettingsNavStackDrawer.tsx b/packages/app-extension/src/components/Unlocked/Settings/SettingsNavStackDrawer.tsx
index 140c78592..931e61956 100644
--- a/packages/app-extension/src/components/Unlocked/Settings/SettingsNavStackDrawer.tsx
+++ b/packages/app-extension/src/components/Unlocked/Settings/SettingsNavStackDrawer.tsx
@@ -17,7 +17,10 @@ import {
   CreateOrImportMnemonic,
 } from "./AddConnectWallet/CreateMnemonic";
 import { ImportMenu } from "./AddConnectWallet/ImportMenu";
-import { ImportMnemonic } from "./AddConnectWallet/ImportMnemonic";
+import {
+  ImportMnemonic,
+  ImportMnemonicAutomatic,
+} from "./AddConnectWallet/ImportMnemonic";
 import { ImportSecretKey } from "./AddConnectWallet/ImportSecretKey";
 import { PreferencesAutoLock } from "./Preferences/AutoLock";
 import { PreferencesEthereum } from "./Preferences/Ethereum";
@@ -88,6 +91,10 @@ export function SettingsNavStackDrawer({
             name="import-from-mnemonic"
             component={(props: any) => <ImportMnemonic {...props} />}
           />
+          <NavStackScreen
+            name="set-and-sync-mnemonic"
+            component={(props: any) => <ImportMnemonicAutomatic {...props} />}
+          />
           <NavStackScreen
             name="import-from-secret-key"
             component={(props: any) => <ImportSecretKey {...props} />}
diff --git a/packages/app-extension/src/components/common/WalletList.tsx b/packages/app-extension/src/components/common/WalletList.tsx
index 1c55c3561..aad420e4f 100644
--- a/packages/app-extension/src/components/common/WalletList.tsx
+++ b/packages/app-extension/src/components/common/WalletList.tsx
@@ -48,7 +48,10 @@ import {
   CreateOrImportMnemonic,
 } from "../Unlocked/Settings/AddConnectWallet/CreateMnemonic";
 import { ImportMenu } from "../Unlocked/Settings/AddConnectWallet/ImportMenu";
-import { ImportMnemonic } from "../Unlocked/Settings/AddConnectWallet/ImportMnemonic";
+import {
+  ImportMnemonic,
+  ImportMnemonicAutomatic,
+} from "../Unlocked/Settings/AddConnectWallet/ImportMnemonic";
 import { ImportSecretKey } from "../Unlocked/Settings/AddConnectWallet/ImportSecretKey";
 import { RemoveWallet } from "../Unlocked/Settings/YourAccount/EditWallets/RemoveWallet";
 import { RenameWallet } from "../Unlocked/Settings/YourAccount/EditWallets/RenameWallet";
@@ -254,6 +257,10 @@ function WalletNavStack({
         name="create-or-import-mnemonic"
         component={(props: any) => <CreateOrImportMnemonic {...props} />}
       />
+      <NavStackScreen
+        name="set-and-sync-mnemonic"
+        component={(props: any) => <ImportMnemonicAutomatic {...props} />}
+      />
       <NavStackScreen
         name="import-wallet"
         component={(props: any) => <ImportMenu {...props} />}
diff --git a/packages/background/src/backend/core.ts b/packages/background/src/backend/core.ts
index 296ed9460..0bc29b037 100644
--- a/packages/background/src/backend/core.ts
+++ b/packages/background/src/backend/core.ts
@@ -1241,9 +1241,27 @@ export class Backend {
         mnemonic,
         recoveryPaths
       );
+
+      //
+      // The set of all keys currently in the keyring store. Don't try to sync
+      // a key if it's already client side.
+      //
+      const allLocalKeys = Object.values(
+        await this.keyringStoreReadAllPubkeys()
+      )
+        .map((p) =>
+          p.hdPublicKeys
+            .concat(p.importedPublicKeys)
+            .concat(p.ledgerPublicKeys)
+            .map((p) => p.publicKey)
+        )
+        .reduce((a, b) => a.concat(b), []);
+
       const searchPublicKeys = serverPublicKeys
         .filter((b) => b.blockchain === blockchain)
-        .map((p) => p.publicKey);
+        .map((p) => p.publicKey)
+        .filter((p) => !allLocalKeys.includes(p));
+
       for (const searchPublicKey of searchPublicKeys) {
         const index = publicKeys.findIndex(
           (p: string) => p === searchPublicKey
@@ -1261,11 +1279,23 @@ export class Backend {
             // Doesn't exist, we can create it
           }
           if (blockchainKeyring) {
-            // Exists, just add the missing derivation path
-            const { publicKey, name } =
-              await this.keyringStore.activeUserKeyring
-                .keyringForBlockchain(blockchain)
-                .addDerivationPath(recoveryPaths[index]);
+            let [publicKey, name] = await (async () => {
+              const derivationPath = recoveryPaths[index];
+              if (!blockchainKeyring.hasHdKeyring()) {
+                const [[publicKey, name]] =
+                  await blockchainKeyring.initHdKeyring(mnemonic, [
+                    derivationPath,
+                  ]);
+                return [publicKey, name];
+              } else {
+                // Exists, just add the missing derivation path
+                const { publicKey, name } =
+                  await this.keyringStore.activeUserKeyring
+                    .keyringForBlockchain(blockchain)
+                    .addDerivationPath(derivationPath);
+                return [publicKey, name];
+              }
+            })();
             this.events.emit(BACKEND_EVENT, {
               name: NOTIFICATION_KEYRING_DERIVED_WALLET,
               data: {