> 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/security-model/trust-assumptions.md).

# Trust assumptions

Covenant system is designed trustless, self-custody, decentralized and on-chain on each step, eliminating trusted operators, 3rd party intermediaries, centralized federations, or off-chain decision-making.

### Key features include:

* No Wrapping or Oracles: Instead of federations or custodial bridges for Bitcoin functional operations, Covenant uses distributed, rotatable MPC[^1] keys based on FROST[^2] signatures. This ensures secure, threshold-based signing without single points of failure.
* Self-Custody and Deterministic Withdrawals: Users retain full ownership of their BTC assets. Deposits create native Bitcoin UTXOs with a t-of-n FROST aggregated signature for programmable operations and a user-controlled key with CSV/CLTV timelocks for unilateral recovery. Withdrawals are guaranteed without delays, enforced by on-chain logic - no operator intervention required.
* Channels for DeFi: Inspired by Lightning Network channels but expanded with full smart contract support, users can channel BTC into Covenant for unlimited DeFi operations (e.g., yield farming, trading) on other networks. Only deposit/withdrawal transactions hit the Bitcoin blockchain; intermediate states are handled efficiently on Covenant.
* User Entropy and Block Enhancements: To bolster security, Covenant has increased block size and implemented resilient user-created randomness via user-delegated balance voting to validators. This entropy source makes blocks more resistant to attacks while storing service data like SPV roots.
* Distributed Storage and Key Management: Integrated systems for decentralized storage and key handling ensure resilience. For compliance needs, optional KYC/KYB and AML checks can be applied to specific deposits without compromising self-custody.
* Compliance and Resilience: Deterministic, smart contract-managed processes handle everything automatically. Users can become validators or collators, enhancing decentralization. No entity can censor or manipulate data flow.

[^1]: Multi-Party Computation

[^2]: Flexible Round-Optimized Schnorr Threshold signatures ([Glossary](https://cvnnt.gitbook.io/documentation/data-sources/glossary)).