You should know that your wallet software acts as a tool to generate your keys and helps you interact with the blockchain. Your  seed phrase holds the access to your digital assets allowing your to  recover them through any compatible wallet.

Upon restoration using a 12 word seed in a wallet like Electrum, the software then uss Electrum standards Bip39 and derivation methods like BIP44 or its own to define your key pairs and associated addresses. It then scans the blockchain for these addresses, and the balance related to it.

You should know that your wallet software acts as a tool to generate your keys and helps you interact with the blockchain. Your  seed phrase holds the access to your digital assets allowing your to  recover them through any compatible wallet.

Upon restoration using a 12 word seed in a wallet like Electrum, the software then uss Electrum standards and derivation methods like BIP44 or its own to define your key pairs and associated addresses. It then scans the blockchain for these addresses, and the balance related to it.