1/ There are a lot of bitcoin covenants proposals out there, and you might be thinking why they matter.

Here are some ways that Ark could improve if/when the features enabled by covenants are made available:

2/ Smoother unilateral exits: One of the risks of Ark is the potential on-chain congestion if an ASP goes offline and users start redeeming their funds en masse. Covenants enable users to essentially lock in their exit costs in advance, ensuring they don’t get their funds stuck.

3/ More efficient usage of capital: Covenants can ease liquidity requirements for the ASP, allowing spent VTXOs to be reclaimed before the shared output expires.

4/ Simpler exit: Covenant proposals that enable MATT, as proposed by salvatoshi could streamline exits using an optimistic execution environment, simplifying the unroll process for users.

5/ “Lighter” light wallets: Covenants reduce storage and bandwidth needs for light clients. This is especially beneficial for users who struggle with data storage, as deterministic recovery enabled by covenants eliminates the risk of losing funds due to lost backups.