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The Covenant Model

L1 Status: ACTIVE CONSENSUS | SilverScript: OFFICIAL RELEASE v1.0.0

Kaspa Covenants are not EVM smart contracts. There is no "contract account" that sits persistently at a fixed address holding state.

What is a Kaspa Covenant?​

A Covenant is a constraint placed on a UTXO. It dictates:

  1. How the UTXO may be spent (e.g., requires a specific signature).
  2. What successor outputs must be created when it is spent (e.g., "You can spend this coin, but you must create a new coin with this exact script and value").

Because the script can introspect the spending transaction (KIP-17), it enforces a strict state transition from one UTXO to the next.

The State Transition Lifecycle​

flowchart TD
    UTXO1["Covenant UTXO (State N)"] -->|Spend| Script["Kaspa Script Validation"]
    Script -->|Introspects Tx| Constraints{"Constraints Met?"}
    Constraints -->|Yes| UTXO2["Successor UTXO (State N+1)"]
    Constraints -->|No| Reject["Tx Rejected"]
  • Where execution occurs: On every Kaspa node on the network.
  • When validation occurs: During the UTXO spend validation phase.
  • What state means: The current data encoded in the UTXO's script or output.
  • What persists: The successor UTXO.

P2SH and State Evolution​

Covenants often use Pay-to-Script-Hash (P2SH). Because a covenant's state is often encoded directly into its script, when the state changes, the script changes, and therefore the P2SH address changes.

You cannot assume a covenant will live at a stable Kaspa address forever. Tracking a covenant by its address will fail as soon as its state evolves. This is precisely why Covenant IDs were introduced.

Security Model​

A covenant is only as secure as its script constraints.

  • Incorrect Successor Constraints: If the script fails to enforce that the successor UTXO maintains the covenant, the funds can be stolen or "broken out" of the covenant.
  • Compiler Trust: If you use SilverScript to write your covenant, you must trust that the compiler correctly translates your logic into secure Kaspa Script constraints.
  • Not "Trustless": While consensus execution is trustless, the application logic itself may contain bugs.