BIP32 stands for Bitcoin Improvement Proposal 32. It is a method for generating a sequence of private keys from a single seed. This means that with just one initial seed, multiple private keys can be derived in a hierarchical structure. This provides a convenient way to create and manage a large number of keys without needing to store each one separately.

By using the BIP32 protocol, users can generate a master key from which child keys can be derived. These child keys can then be further divided into grandchild keys and so on, creating a tree-like structure of keys. This hierarchy allows for easier organization and management of keys while maintaining security.

BIP32 also simplifies the process of creating and securing backups, as only the master seed needs to be stored securely. This makes it easier to recover a wallet if it is lost or stolen. Overall, BIP32 improves the usability and security of cryptocurrency wallets by providing a standardized method for key generation and management.