Covenants

What it is

Start here when the product is best expressed as asset-native state on Kaspa L1.

They build on covenant-style spending constraints, but the model here is broader than a plain covenant. A protected output can carry state, define a state transition, validate the next outputs, and keep non-forgeable lineage through Covenant IDs. If the main job of the product is transfer policy, issuance, custody, release conditions, or asset-native state machines, this is the closest fit. One protected state advances sequentially, though independent states or sub-apps can still run in parallel.

Mental model

Picture a chain of protected outputs, where each spend must create the next valid state.

flowchart TD
    S0[Protected output<br/>State S0]
    T1[Spend transaction<br/>Validate S0 to next state]
    S1A[Protected output<br/>State S1A]
    S1B[Protected output<br/>State S1B]
    T2[Later spend<br/>Validate S1A to S2]
    S2[Protected output<br/>State S2]

    S0 --> T1
    T1 --> S1A
    T1 --> S1B
    S1A --> T2 --> S2

Pick this when

• One shared state can advance one valid step at a time.
• Your product is centered on asset behavior and stateful outputs such as transfers, custody, issuance, unlock conditions, controlled flows, or output-level state transitions.
• Your state stays small relative to covenant redeem-script size. The script size limit is about 300 KB, and your usable state must stay below that because the contract code also consumes part of the same script budget.

Good fits

• Vaults and treasury controls
• Escrow-like flows
• Time-based or condition-based unlocking
• Native asset logic
• Issuance and transfer policies

When not to use it

• Many users need to mutate the same shared state concurrently.
• Your state becomes too large or your state transitions become too complex for Covenants to stay pleasant.
• Each action needs custom private or proof-driven verification.

Current expectations

You can build with this model today, but the tooling is still early.

Silverscript is the main builder reference point right now. It gives you a higher-level way to define your covenant and state transitions.

Expect some manual work around deployment, transaction construction, and state handling.