diff --git a/lib/wallet/account.js b/lib/wallet/account.js
index caeb9dac..5be77405 100644
--- a/lib/wallet/account.js
+++ b/lib/wallet/account.js
@@ -211,7 +211,7 @@ Account.fromOptions = function fromOptions(db, options) {
  * @const {Number}
  */
 
-Account.MAX_LOOKAHEAD = 5;
+Account.MAX_LOOKAHEAD = 10;
 
 /**
  * Attempt to intialize the account (generating
@@ -794,7 +794,6 @@ Account.prototype.toRaw = function toRaw(writer) {
   p.writeU32(this.network.magic);
   p.writeVarString(this.name, 'ascii');
   p.writeU8(this.initialized ? 1 : 0);
-  p.writeU8(this.watchOnly ? 1 : 0);
   p.writeU8(this.type);
   p.writeU8(this.m);
   p.writeU8(this.n);
@@ -831,7 +830,6 @@ Account.prototype.fromRaw = function fromRaw(data) {
   this.network = Network.fromMagic(p.readU32());
   this.name = p.readVarString('ascii');
   this.initialized = p.readU8() === 1;
-  this.watchOnly = p.readU8() === 1;
   this.type = p.readU8();
   this.m = p.readU8();
   this.n = p.readU8();
diff --git a/lib/wallet/wallet.js b/lib/wallet/wallet.js
index 2cf91b21..e409ec1b 100644
--- a/lib/wallet/wallet.js
+++ b/lib/wallet/wallet.js
@@ -71,6 +71,7 @@ function Wallet(db, options) {
   this.id = null;
   this.master = null;
   this.initialized = false;
+  this.watchOnly = false;
   this.accountDepth = 0;
   this.token = constants.ZERO_HASH;
   this.tokenDepth = 0;
@@ -111,6 +112,11 @@ Wallet.prototype.fromOptions = function fromOptions(options) {
     this.initialized = options.initialized;
   }
 
+  if (options.watchOnly != null) {
+    assert(typeof options.watchOnly === 'boolean');
+    this.watchOnly = options.watchOnly;
+  }
+
   if (options.accountDepth != null) {
     assert(utils.isNumber(options.accountDepth));
     this.accountDepth = options.accountDepth;
@@ -633,7 +639,6 @@ Wallet.prototype._createAccount = co(function* createAccount(options) {
   var passphrase = options.passphrase;
   var timeout = options.timeout;
   var name = options.name;
-  var watchOnly = options.watchOnly === true;
   var key, master, account;
 
   if (typeof options.account === 'string')
@@ -644,7 +649,7 @@ Wallet.prototype._createAccount = co(function* createAccount(options) {
 
   master = yield this.unlock(passphrase, timeout);
 
-  if (watchOnly && options.accountKey) {
+  if (this.watchOnly && options.accountKey) {
     key = options.accountKey;
     if (!HD.isHD(key))
       key = HD.from(key, this.network);
@@ -664,7 +669,7 @@ Wallet.prototype._createAccount = co(function* createAccount(options) {
     keys: options.keys,
     m: options.m,
     n: options.n,
-    watchOnly: watchOnly
+    watchOnly: this.watchOnly
   };
 
   this.start();
@@ -742,6 +747,7 @@ Wallet.prototype.getAccount = co(function* getAccount(account) {
 
   account.wid = this.wid;
   account.id = this.id;
+  account.watchOnly = this.watchOnly;
 
   return account;
 });
@@ -976,6 +982,14 @@ Wallet.prototype._importKey = co(function* importKey(account, ring, passphrase)
   if (account == null)
     account = 0;
 
+  if (!this.watchOnly) {
+    if (!ring.privateKey)
+      throw new Error('Cannot import pubkey into non watch-only wallet.');
+  } else {
+    if (ring.privateKey)
+      throw new Error('Cannot import privkey into watch-only wallet.');
+  }
+
   exists = yield this.getPath(ring.getHash('hex'));
 
   if (exists)
@@ -989,9 +1003,6 @@ Wallet.prototype._importKey = co(function* importKey(account, ring, passphrase)
   if (account.type !== Account.types.PUBKEYHASH)
     throw new Error('Cannot import into non-pkh account.');
 
-  if (!ring.privateKey && !account.watchOnly)
-    throw new Error('Cannot import pubkey into non-watchonly account.');
-
   yield this.unlock(passphrase);
 
   ring = WalletKey.fromRing(account, ring);
@@ -1053,6 +1064,9 @@ Wallet.prototype._importAddress = co(function* importAddress(account, address) {
   if (account == null)
     account = 0;
 
+  if (!this.watchOnly)
+    throw new Error('Cannot import address into non watch-only wallet.');
+
   exists = yield this.getPath(address);
 
   if (exists)
@@ -1066,9 +1080,6 @@ Wallet.prototype._importAddress = co(function* importAddress(account, address) {
   if (account.type !== Account.types.PUBKEYHASH)
     throw new Error('Cannot import into non-pkh account.');
 
-  if (!account.watchOnly)
-    throw new Error('Cannot import address into non-watchonly account.');
-
   path = Path.fromAddress(account, address);
 
   this.start();
@@ -1132,6 +1143,9 @@ Wallet.prototype._fund = co(function* fund(tx, options) {
   if (!this.initialized)
     throw new Error('Wallet is not initialized.');
 
+  if (this.watchOnly)
+    throw new Error('Cannot fund from watch-only wallet.');
+
   if (options.account != null) {
     account = yield this.getAccount(options.account);
     if (!account)
@@ -1595,6 +1609,9 @@ Wallet.prototype.sign = co(function* sign(tx, options) {
   if (typeof options === 'string' || Buffer.isBuffer(options))
     options = { passphrase: options };
 
+  if (this.watchOnly)
+    throw new Error('Cannot sign from a watch-only wallet.');
+
   yield this.unlock(options.passphrase, options.timeout);
 
   rings = yield this.deriveInputs(tx);
@@ -2073,6 +2090,7 @@ Wallet.prototype.toJSON = function toJSON() {
     wid: this.wid,
     id: this.id,
     initialized: this.initialized,
+    watchOnly: this.watchOnly,
     accountDepth: this.accountDepth,
     token: this.token.toString('hex'),
     tokenDepth: this.tokenDepth,
@@ -2090,6 +2108,7 @@ Wallet.prototype.toJSON = function toJSON() {
 Wallet.prototype.fromJSON = function fromJSON(json) {
   assert(utils.isNumber(json.wid));
   assert(typeof json.initialized === 'boolean');
+  assert(typeof json.watchOnly === 'boolean');
   assert(utils.isName(json.id), 'Bad wallet ID.');
   assert(utils.isNumber(json.accountDepth));
   assert(typeof json.token === 'string');
@@ -2100,6 +2119,7 @@ Wallet.prototype.fromJSON = function fromJSON(json) {
   this.wid = json.wid;
   this.id = json.id;
   this.initialized = json.initialized;
+  this.watchOnly = json.watchOnly;
   this.accountDepth = json.accountDepth;
   this.token = new Buffer(json.token, 'hex');
   this.master = MasterKey.fromJSON(json.master);
@@ -2119,6 +2139,7 @@ Wallet.prototype.toRaw = function toRaw(writer) {
   p.writeU32(this.wid);
   p.writeVarString(this.id, 'ascii');
   p.writeU8(this.initialized ? 1 : 0);
+  p.writeU8(this.watchOnly ? 1 : 0);
   p.writeU32(this.accountDepth);
   p.writeBytes(this.token);
   p.writeU32(this.tokenDepth);
@@ -2142,6 +2163,7 @@ Wallet.prototype.fromRaw = function fromRaw(data) {
   this.wid = p.readU32();
   this.id = p.readVarString('ascii');
   this.initialized = p.readU8() === 1;
+  this.watchOnly = p.readU8() === 1;
   this.accountDepth = p.readU32();
   this.token = p.readBytes(32);
   this.tokenDepth = p.readU32();
diff --git a/test/wallet-test.js b/test/wallet-test.js
index 850e0338..fb38943d 100644
--- a/test/wallet-test.js
+++ b/test/wallet-test.js
@@ -946,12 +946,10 @@ describe('Wallet', function() {
   it('should import pubkey', cob(function *() {
     var priv = bcoin.keyring.generate();
     var key = new bcoin.keyring(priv.publicKey);
-    var w = yield walletdb.create();
+    var w = yield walletdb.create({ watchOnly: true });
     var options, k, t1, t2, tx;
 
-    yield w.createAccount({ name: 'watchonly', watchOnly: true });
-
-    yield w.importKey('watchonly', key);
+    yield w.importKey('default', key);
 
     k = yield w.getPath(key.getHash('hex'));
 
@@ -963,12 +961,10 @@ describe('Wallet', function() {
 
   it('should import address', cob(function *() {
     var key = bcoin.keyring.generate();
-    var w = yield walletdb.create();
+    var w = yield walletdb.create({ watchOnly: true });
     var options, k, t1, t2, tx;
 
-    yield w.createAccount({ name: 'watchonly', watchOnly: true });
-
-    yield w.importAddress('watchonly', key.getAddress());
+    yield w.importAddress('default', key.getAddress());
 
     k = yield w.getPath(key.getHash('hex'));