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This document describes the lifecycle of a L0 token transaction from creation to finality. It is a useful reference for understanding how a transaction flows through each layer of the network to either be rejected at various stages, or to reach finality after being included in a Global Snapshot.

Token Lifecycle

Lifecycle Overview

  • Transaction Creation: A transaction is created, signed, and sent to the Currency L1 network via the REST API
  • Initial L1 Transaction Validation: The transaction undergoes initial validation which checks the signature, destination address, and parent chain of the transaction for validity.
    • If initial validation fails, an error is returned from the REST API endpoint to the sender and the transaction is dropped.
  • L1 Transaction Pool: Transactions that pass initial validation are added the Currency L1 transactions pool in a β€œwaiting” state.
  • Block Creation Consensus: A block creation round (L1 consensus) is initiated on the Currency L1 network which bundles transactions into blocks
  • Currency L1 Block Validation: Transactions within each block are further validated at this point which checks if the parents of a block were accepted and checks that all balance changes are valid.
    • If transaction fails during block consensus, the entire block fails and the transactions are dropped
  • Currency L0 Block Validation: Valid blocks are sent to the Currency L0 layer and the same block validations are run again.
  • Currency L0 Snapshot Consensus: Valid blocks are added to a Currency Snapshot which undergoes snapshot consensus
  • Global L0 Validation: Currency Snapshots are sent to the Global L0 for final validation and inclusion into a Global Snapshot.
  • Finality: Once included in a Global Snapshot, a transaction has reached finality and cannot be rejected or reverted.