KBAG

Explanation

In Apple's new IMG3 security scheme, they have used something called a KBAG. At the bottom of a firmware file, you will see something that will, on the ASCII side of your hex editor, see "GABK", which is "KBAG" flipped. Look on the hex side and you will the KBAG according to this format:

KBAG Format

KBAG128

typedef struct Unparsed_KBAG_128 {
     int        magic; // string with bits flipped = "KBAG" (magic = 0x4741424B)
     int  tagFullSize; // size of KBAG from beyond that point to the end of it
     int  tagDataSize; // size of KBAG without this 0xC header
     int   cryptState; // 1 if the key and IV in the KBAG are encrypted with the [[GID-Key]]
                       // 2 is used with a second KBAG for the [[S5L8920]], use is unknown.
     int      aesType; // 0x80 = aes128 / 0xc0 = aes192 / 0x100 = aes256
     char   EncIV[16]; // IV for the firmware file, encrypted with the [[GID-Key]]
     char  EncKey[16]; // Key for the firmware file, encrypted with the [[GID-Key]]
} Unparsed_KBAG_AES128;

KBAG192

typedef struct Unparsed_KBAG_AES192 {
     int        magic; // string with bits flipped = "KBAG" (magic = 0x4741424B)
     int     fullSize; // size of KBAG from beyond that point to the end of it
     int  tagDataSize; // size of KBAG without this 0xC header
     int   cryptState; // 1 if the key and IV in the KBAG are encrypted with the [[GID-Key]]
                       // 2 is used with a second KBAG for the [[S5L8920]], use is unknown.
     int      aesType; // 0x80 = aes128 / 0xc0 = aes192 / 0x100 = aes256
     char   EncIV[16]; // IV for the firmware file, encrypted with the [[GID-Key]]
     char  EncKey[24]; // Key for the firmware file, encrypted with the [[GID-Key]]
} Unparsed_KBAG_AES192;

KBAG256

typedef struct Unparsed_KBAG_256 {
     int        magic; // string with bits flipped = "KBAG" (magic = 0x4741424B)
     int     fullSize; // size of KBAG from beyond that point to the end of it
     int  tagDataSize; // size of KBAG without this 0xC header
     int   cryptState; // 1 if the key and IV in the KBAG are encrypted with the [[GID-Key]]
                       // 2 is used with a second KBAG for the [[S5L8920]], use is unknown.
     int      aesType; // 0x80 = aes-128, 0xc0 = aes-192, 0x100 = aes256
     char   EncIV[16]; // IV for the firmware file, encrypted with the [[GID-Key]]
     char  EncKey[32]; // Key for the firmware file, encrypted with the [[GID-Key]]
} Unparsed_KBAG_AES256;

How it works

Basically, it just boils down to using the iPhone / iPod group id key to decrypt Enc_IV and Enc_Key, then using that key and IV to decrypt the DATA section of the file (the code itself).

As an interesting side note, because of the circumstances with the IMG3 format, the Kernel never needs to even touch the GID-key anymore, as it's job is to just flash the image to the NOR as is, with container and all.