We’ve all been there: another leaked API key, another compromised credential, another midnight emergency call. The traditional approach to cloud security—rotating passwords, managing access keys, praying nobody commits secrets to GitHub—feels like fighting a losing battle. But what if I told you there’s a radically different way to think about this problem, one that eliminates passwords entirely and creates an unbroken chain of hardware-backed trust from your physical key to your serverless functions?
I recently dove into an architecture that connects YubiKey FIDO2 authentication through an OIDC identity provider to HashiCorp Vault, which then provisions AWS Lambda functions via Terraform—and the implications are far more profound than just “passwordless login.” Here are five counter-intuitive insights that completely changed how I think about modern cloud security.
1. Your Lambda Functions Can Prove Their Identity Without Storing Any Secrets
This sounds impossible at first. How can a Lambda function authenticate to retrieve secrets without… having secrets to authenticate with? The traditional approach is a vicious cycle: you need credentials to get credentials.
The breakthrough here is AWS IAM authentication combined with Vault’s AWS auth method. When your Lambda function starts, it can prove its identity using AWS’s IAM signing process—essentially using AWS’s own infrastructure as the authentication mechanism. The Lambda’s IAM role becomes its identity.
Here’s why this matters: zero embedded secrets. No environment variables with tokens, no hardcoded API keys, no encrypted configuration files that still need decryption keys. The Lambda proves “I am this specific IAM role” to Vault, and Vault responds with a short-lived token to access secrets.
“Lambda proves identity to Vault; no embedded secrets.”
This fundamentally inverts the security model. Instead of protecting static credentials, you’re leveraging the cloud provider’s own identity system. It’s elegant, phishing-resistant, and eliminates an entire class of vulnerabilities.
2. FIDO2 Isn’t Just About Logging In—It’s About Creating an Audit Trail from Hardware to Code
When most people think about FIDO2 and YubiKeys, they think “multi-factor authentication” or “passwordless login.” True, but incomplete.
What’s truly revolutionary is that FIDO2 creates a verifiable chain of custody from physical hardware to deployed infrastructure. When you touch your YubiKey to authenticate, you’re not just proving you’re human—you’re creating a cryptographic link between a physical device and the infrastructure changes that follow.
Here’s the flow:
- YubiKey FIDO2 authentication → Dex issues OIDC token
- OIDC token → Vault issues time-limited token
- Vault token → Terraform provisions infrastructure
- Terraform-created IAM role → Lambda authenticates to Vault
- Lambda retrieves secrets for runtime
Every step is auditable. Every step is cryptographically verified. You can trace every deployed Lambda function back to the specific hardware key that authorized the deployment.
In incident response scenarios, this is game-changing. “Which engineer deployed the compromised function?” becomes a forensically answerable question with hardware-backed proof.
3. Infrastructure-as-Code and Secret Management Are Actually the Same Problem
Here’s a subtle insight buried in this architecture: the same Terraform code that provisions your Lambda function also stores the secrets it will consume.
Look at this elegant symmetry:
# secret.tf – Terraform stores the secret in Vault
resource "vault_kv_secret_v2" "api_key" {
mount = "kv"
name = "lambda/api-key"
data_json = jsonencode({
key = "super-secret-api-key-123"
})
}
# lambda.tf – Terraform provisions the Lambda
resource "aws_lambda_function" "demo" {
function_name = "vault-demo"
# ... configuration
}
Traditional approaches separate these concerns: developers write infrastructure code, security teams manage secrets separately, and those two worlds collide in brittle, error-prone ways.
This architecture says: secrets and infrastructure are lifecycle twins. They’re provisioned together, versioned together, and revoked together. When you run terraform apply, you’re establishing the complete security context in one atomic operation.
The implication? Your Git history becomes your security audit log. Every secret rotation, every permission change, every infrastructure modification—all version controlled, all peer reviewed, all traceable.
4. “Zero Trust” Starts With Zero Passwords—Even for Service-to-Service Communication
We hear “zero trust” thrown around constantly, but what does it actually mean? This architecture provides a concrete answer: no entity in the system, human or machine, ever uses a password.
- Humans → YubiKey FIDO2 (cryptographic proof, not knowledge-based)
- Terraform → Short-lived OIDC-issued Vault tokens (expires in ~1 hour)
- Lambda → AWS IAM role authentication (identity bound to execution context)
Even the communication between services is ephemeral. The Vault token Terraform uses expires quickly. The Lambda’s authentication is per-invocation. There are no “service accounts” with static passwords persisting for months.
Why does this matter? Credential theft becomes exponentially harder. Even if an attacker compromises a running Lambda, they get access for that single invocation—no persistent credential to exfiltrate. The blast radius of any compromise shrinks dramatically.
This isn’t theoretical security posturing. This is operational zero trust: every request is authenticated, every token is short-lived, and the entire system degrades gracefully under attack.
5. Code Signing and VPC Isolation Are First-Class Citizens, Not Afterthoughts
Here’s what shocked me most: this implementation doesn’t just demonstrate the happy path—it shows production-grade hardening that most tutorials skip entirely.
The Terraform configuration includes:
- Code signing enforcement: Only cryptographically signed Lambda artifacts can deploy
- VPC attachment: Lambda runs in private subnets with controlled egress
- Dead Letter Queues: Failed invocations are captured for forensic analysis
- Reserved concurrency: Protection against noisy-neighbor effects
- KMS-encrypted DLQ: Even failure logs are encrypted at rest
resource "aws_lambda_code_signing_config" "this" {
allowed_publishers {
signing_profile_version_arns = [aws_signer_signing_profile.lambda.arn]
}
policies {
untrusted_artifact_on_deployment = "Enforce"
}
}
This isn’t security theater—it’s defense in depth baked into the infrastructure definition. You can’t deploy unsigned code. You can’t accidentally expose the Lambda to the public internet. You can’t exceed concurrency limits.
What’s profound is that these protections aren’t bolt-on security tools requiring separate configuration. They’re part of the same Terraform code that deploys the function. Security and functionality are indivisible.
The Real Takeaway: Security Is an Architecture, Not a Feature
If you walked away thinking “this is a cool way to use YubiKeys with Lambda,” you missed the point.
The real insight is architectural: when you eliminate static credentials and create hardware-backed identity chains, security stops being something you add to your system and becomes something your system is built from.
Every component in this architecture—Dex, Vault, Terraform, AWS IAM—plays a role in an unbroken trust chain. Remove any link, and the chain breaks. Add them together, and you get emergent security properties: auditability, revocability, time-bounded access, and hardware-backed proof.
This is the future of cloud security. Not more tools, not more dashboards, but fundamentally different architectural patterns that make the insecure path the hard path.
So here’s my question for you: If you could eliminate every password and API key from your infrastructure tomorrow, what would you do differently? What would you build that’s currently too risky? What experiments would you run?
The tools exist. The patterns are proven. The only question is: are you ready to rethink the fundamentals?
Want to See It In Action?
The complete implementation—including Terraform configurations, Lambda code, Vault policies, and Dex setup—is available on GitHub:
👉 Check out the repository: touch-and-go
Explore the code, try it yourself, and see how hardware-backed authentication chains can transform your cloud security posture. All the components are proof-of-concept-ready and ready to adapt to your infrastructure.
Star the repo if you found this useful, and feel free to open issues or contribute improvements!
https://github.com/w8mej/touch-and-go