//todo add a locking script vs custodian schematic
Self-Custody by Design
Covenant ensures users maintain primary control over their Bitcoin collateral through non-custodial script-based transactions. Every interaction—minting, redeeming, and claiming—occurs directly on the Bitcoin blockchain with clearly defined conditions for collateral access.
Why Sovereignty Matters
Preserving User Control
Users retain ownership of their Bitcoin throughout the collateralization process. Collateral is locked into transparent Bitcoin Scripts that enforce protocol rules while preserving the user as the primary controller. User signatures are required for all standard operations, eliminating counterparty risk in normal circumstances.
Eliminating Single Points of Failure
Traditional stablecoins require users to trust centralized issuers with complete custody of reserves. USD-B distributes control through deterministic script conditions and decentralized validation networks, removing dependence on any single custodial entity.
Maintaining Censorship Resistance
With no single operator controlling funds or operations, Covenant transactions cannot be arbitrarily censored or reversed. Users interact directly with Bitcoin’s consensus mechanism and distributed protocol enforcement.
How Sovereignty is Enforced
Covenant uses multi-path Bitcoin Scripts that define clear spending conditions for different scenarios. Users maintain control over standard operations, while distributed mechanisms handle edge cases like liquidations. All conditions are transparent and verifiable on-chain.
