Introduction

This book documents the ZK Covenant Rollup, a proof-of-concept Layer 2 rollup bridge built on Kaspa using covenants and zero-knowledge proofs.

What is this?

The ZK Covenant Rollup demonstrates how off-chain state transitions can be proven with RISC Zero and verified on-chain through Kaspa’s covenant mechanism. Users deposit funds into a covenant-controlled UTXO, perform off-chain transfers on an account-based L2, and withdraw back to L1 — all enforced cryptographically without trusting the rollup operator.

The system has three core properties:

1. Validity — Every state transition is backed by a ZK proof. The on-chain script rejects any update that fails verification.
2. Liveness — Withdrawals are processed through a permission tree. Once the guest proof commits an exit, the on-chain permission script allows anyone to claim it.
3. Soundness — The guest proof pipeline verifies every action’s authorization, balance sufficiency, and SMT consistency. A malicious host cannot forge state updates.

High-level flow

flowchart LR
    subgraph L1["Kaspa L1"]
        UTXO["Covenant UTXO<br/>(state root + seq commitment)"]
        PERM["Permission UTXO<br/>(withdrawal claims)"]
    end

    subgraph OffChain["Off-Chain"]
        HOST["Host / Operator"]
        GUEST["RISC Zero Guest<br/>(ZK proof)"]
    end

    HOST -->|"blocks + witnesses"| GUEST
    GUEST -->|"proof + journal"| HOST
    HOST -->|"state tx<br/>(proof, new state)"| UTXO
    UTXO -->|"spawns if exits"| PERM
    PERM -->|"withdrawal claim"| USER["User L1 wallet"]

Deposit (Entry): A user sends funds to the delegate script address. The next proof batch picks up the deposit transaction, verifies the output pays the correct covenant-bound P2SH, and credits the L2 account.

Transfer: An L2 user signs a transfer payload. The guest verifies the signature via previous-transaction output introspection and updates the SMT.

Withdrawal (Exit): An L2 user creates an exit action. The guest debits their account and adds a leaf to the permission tree. The on-chain permission script lets anyone claim the withdrawal by presenting a Merkle proof.

Scope

This book covers the PoC logic: the core library, guest proof program, and on-chain script construction. See Chapter 12: Running the Demo for how to build and run it.

Reading guide