> For the complete documentation index, see [llms.txt](https://cvnnt.gitbook.io/documentation/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://cvnnt.gitbook.io/documentation/resources/glossary.md).

# Glossary

* **Bitcoin-complementary** - Bitcoin-compatible in terms of cross-chain interaction (same family) with additional features expanding functionality over Bitcoin assets.
* **Bitcoin covenant** **-** A concept for extension of Bitcoin blockchain programmability, a mechanism that enforces conditions or restrictions on how a Bitcoin transaction can be spent.
* **BTCFi**, **BitcoinDeFi (Bitcoin Decentralized Finance)** - The ecosystem of decentralized finance applications built on or around the Bitcoin network, Bitcoin assets or value. BTCFi aims to bring the benefits of decentralized finance (DeFi), such as lending, staking, and trading, to Bitcoin, transforming it from a passive store of value into a more active and productive asset.
* **Channel** - A concept similar to Lightning network’ payment channels expanded with operations statefulness and full smart contract support. Channel on Covenant allows user to utilize complex stateful smart contract-based interactions and activity (BitcoinDeFi) with their channeled BTC assets without committing all of the state changes (transactions) to the Bitcoin blockchain. Only depositing and withdrawing transactions are executed on the Bitcoin blockchain itself, while an unlimited number of complex on-chain DeFi operations with their channeled BTC can be made by user on Covenant.
* **Channeled asset** - An asset deposited to the channel.
* **Collator (Collator node)** - Collator is a Covenant master node that, as a part of Collator sMPC group, is responsible for handling and verifying (signing) correctness in cross-chain activities.
* **CPFP (Child Pays For Parent)** - a fee bumping technique where a user spends an output from a low-feerate unconfirmed transaction in a child transaction with a high feerate in order to encourage miners to include both transactions in a block.
* **Custodian** - A party that holds user’ assets under control (physically or by trusted permission requirement power).
* **Custody risk:** Risk of potential loss of user’ assets held by a custodian.
* **Decentralized** - no trusted entity or federation has authority over data and processes.
* **DKG (Distributed Key Generation)** - a cryptographic process in which multiple parties contribute to the calculation of a shared public and private key set. Unlike most public key encryption models, distributed key generation does not rely on trusted 3rd parties.
* EAAC (Expensive to Attack in the Absence of Collapse)  - a protocol property that guarantees the EAAC protocol to be “more economically secure” than the non-EAAC one. 
* **Federation** - A group of trusted individuals or organizations.
* **FROST (Flexible Round-Optimized Schnorr Threshold Signatures)** - a cryptographic protocol that allows a group of n participants to generate a single Schnorr signature where a threshold of t participants must cooperate. It is designed to be efficient by minimizing network communication in the common case (when no one misbehaves) while still being secure against malicious actors. A successful outcome is a single, aggregate signature that is indistinguishable from a standard Schnorr signature.
* **FROST sMPC group** - FROST protocol enables a group of n participants to create a digital signature, but only requires t of them to cooperate to generate it. This is known as a t-of-n threshold signature. FROST sMPC group reaches consensus on data when FROST threshold signature is successfully aggregated.
* **Omnicompatibility** - System seamless compatibility with at least 2 other systems.
* **Operator** - A trusted person responsible for the operation.
* **Permissionless (quasi-permissionless)** - Quasi-permissionless is a term used in cryptography and computer science to describe a system where a dynamically changing list of potential participants is known, but with the key assumption that all honest participants on that list are active at the moment. Unlike fully permissionless systems like Bitcoin, where participants are completely anonymous, or permissioned systems, which require an explicit, static list, quasi-permissionless protocols rely on all set of honest, resource-holding parties participating. In the context of Covenant everyone can technically freely participate in Covenant consensus and cross-chain validation. However, several node requirements have to be met, such as: sufficient p2p node reputation rate, sufficient amount of stake, node performance requirements. But: anyone who meets these criteria, can participate, no special “permission” required.
* **RBF (Replace-By-Fee)** - a node policy that allows an unconfirmed transaction in a mempool to be replaced with a different transaction that spends at least one of the same inputs and which pays a higher transaction fee.
* **Self-custody (User-owned custody)** - User retains their ownership of their assets.
* **sMPC (Secure Multiparty Computation)** - a cryptographic method that allows multiple parties to jointly compute a function on their private inputs without revealing those inputs to each other.
* **Stateful** - Each activity / transaction (state change) has a publicly verified on-chain state (proof).
* **Trusted entity** - An entity whose decisions or actions has to be trusted.
* **Trustless, Zero Trust**- nothing has to be trusted in the system processes, no trusted entities, no off-chain parts, everything is on-chain, algorithmic, transparent and can be verified.
* **Turing completeness, Turing complete (system):** - A capability that allows the system to solve any problem that can be expressed as an algorithm, making it computationally universal. A non-Turing complete system is limited to a specific set of functions. Being Turing complete means that a system or language has the ability to simulate any other computational device or algorithm. 
* **Unwrapped, Wrapless** - No “traditional” wrapping is utilized; instead, a self-custody **channel** is created and user ownership over channeled BTC asset is **always** **stated** until the channel is closed.
* **UTXO (Unspent Transaction Output)** - Bitcoin and Covenant model. In the UTXO model each UTXO represents a certain amount of cryptocurrency that has been authorized by a sender and is available to be spent by a recipient. Covenant utilizes hybrid UTXOEVM model, however, its basis model is UTXO, EVM is used to extend Covenant functionality, and its operations obey, depend and rely on UTXO ledger data.
* **Validator (Validator node)** - Validator is a Covenant master node that validate Covenant state and operations by reaching distributed consensus.