Terminology

General Terminology

General Terminology	Definition
Consensus	Consensus is a fundamental property of distributed systems where multiple entities must collectively agree on a single value, validate their states, and terminate the decision process - this cannot be guaranteed deterministically in asynchronous systems with arbitrary failures. (source)
Output (UTXO)	Single-use batch of Bitcoin that must meet a specific set of conditions in order to be spent.
Hierarchical Deterministic (HD) Wallets	Cryptographic wallets that generate an infinite number of keys arranged in a tree structure from a single master seed - typically represented as a mnemonic word sequence - where parent keys can derive child keys, which can derive their own child keys, and so on.
Invoice Address	A single-use token that identifies a Bitcoin transaction's target based on Hierarchical Deterministic Keys; used to prevent address re-use and to protect user privacy.
Partially Signed Bitcoin Transaction (PBST)	A Bitcoin standard introduced in BIP 174 for transactions that are not yet fully signed, designed to improve the interoperability between different wallets, making it easier to conduct complex transactions that require multiple signatures.
Pre-Signed Transaction Hash (Payment Preimage)	A cryptographic mechanism using hash preimage revelation to prove payment authorization, originally from Lightning Network and adapted for Bitcoin with Taproot signatures to enable secure conditional rollback transactions.

Kaon's Terminology	Definition
Delegated Proof of Stake (dPoS)	Incentivize users to confirm network data and ensure security through a process of collateral staking with an additional use of witnesses (formally called delegates).
Delegate Stakes	A transaction with specific lock script used in Kaon's dPoS to give a user an ability to participate in the chain's management, can be combined or delegated.
Masternode	Node connected to a wallet of Stakeholder
Byzantine Fault Tolerance (BFT) Consensus	Non-optimistic provably safe proof-of-stake binary consensus augmented to offer a proof of settlement and distributed key generation (DKG) through deterministic process where its participants take turns round-robin fashion, its consistency and liveness assuming a number of Byzantine corruptions did not exceeded 1/2, and it has the ability to converge back to safety once synchrony is restored.
Treshold Signature Scheme (TSS)	A method to collectively produce signature where every participant holds only a fragment of a private key, in Kaon's case utilizing Schnorr signature, Shamir Secret Sharing, Simple Coins as a source of deterministic random and Lagrange interpolation.
Safe Multiparty Computation (sMPC)	Secure multiparty computation (MPC / SMPC) is a cryptographic protocol that distributes a computation across multiple parties (in Kaon’s case secret message sequences or SMSs) where no individual party can see the other parties’ data.
Epoch	Iteration of 80 blocks 13.(3) minutes long with a strict lifecircle, where election of validators for the next iteration is happened, allowing the BFT consensus to have non-fixed pool of participants in a determenistic manner.
sMPC Group	A set of participants determined by the BFT consensus for the current epoch from the approved set of validators of the current epoch as determined by dPoS consensus.
Witness Group	sMPC Group with a specific role to approve locked BTCs to be sent or to mark it as corrupt.
Validator Group	sMPC Group with a specific role to maintain lock over received BTCs and to send it, which could be executed only after the related Witness Group approval.
Peg In	Process of locking BTC in Bitcoin Network to get mirrorBTCs or to perform extended logic.
Peg Out	Process of sending BTC out of Kaon Network's locking mechanic to a user within the Bitcoin Network.
Sweeping	Process of delegating BTC locks maintained by Validator and Witness Groups of the previous Epoch to sMPC Groups of the current Epoch.
Slashing	Execution of validator or group of validators with confiscation of their stakes in case of detected and proven malicious activities, maintained by Kaon's Consensus Layer.
Mirrored Transaction	Transactions that move in either direction - from Bitcoin to Kaon's Consensus Layer or vice versa - when specific instructions are included in the transaction outputs.
mirrorBTC	Bitcoin representation in Kaon's Consensus Layer produced by Mirrored Transaction through the Peg In process.

Global Components

Component	Description
Consensus Layer	L1 system that provides BFT by randomly selecting and rotating participants (validators) that help reach consensus and solve incidents.
Node Interface	Wraps original node to trigger logic when receiving transactions and helps compose transactions for signing.
Cross Chain Mempool	Ensures deterministic transaction relaying, by using UTXO features (outputs).
BFT Consensus Layer	Orchestrates data flows between all connected chains by setting up a framework of possible interactions and roles or all participants.

BFT Internal Components

Component	Description
Epoch	Determines validator selection for the next iteration, allowing BFT consensus to maintain a deterministic yet dynamic participant pool.
sMPC Group	A coordinated set of nodes that collectively produce threshold signatures and manage cross-chain operations while operating as either Validators (maintaining locks) or Witnesses (approving operations).
sMPC Paritipant	An individual node that holds key shares and participates in collective signing processes while monitoring network transactions for its assigned group.

Internal Interactions

Component	Description
sMPC Participant <-> Node Interface	Broadcasts Mirrored Transactions
Node Interface <-> sMPC Group	Receives transactions and composes Mirrored Transactions
Node Interface <-> Cross Chain Mempool	Detects new transactions to be mirrored and ensures correctness of the process state
sMPC Group <-> Cross Chain Mempool	Pushes prepared and signed Mirrored Transactions to be broadcasted to Bitcoin or Kaon's Consensus Layer.
sMPC Participant <-> Cross Chain Mempool	Broadcasts prepared Mirrored Transaction to Bitcoin or Kaon's Consensus Layer.

External Interactions

Component	Description
Node Interface <-> Bitcoin Node	Receives newly confirmed transactions from Bitcoin Network and provides ability to broadcast transactions into Bitcoin Network.
Node Interface <-> Consensus Layer	Receives newly confirmed transactions from Consensus Layer and provides ability to broadcast transactions into Consensus Layer.
sMPC Group <-> sMPC Participant	Produces an invoice addresses for peg-in transactions and sign Mirrored Transactions
Consensus Layer <-> BFT Consensus	Switches epochs and forms a list of participants for the next epoch, also resolves incidents and applies judgement via slashing.

Component Roles

Component	Role
State	Cross Chain Mempool
Observer	Every sMPC Participant and any other Consensus Layer's node via Node Interface
Signer	Validators Group, sMPC Participant, Consensus Layer's validators for emergency preimage
Validator	Witness Group
Dispute Resolver	Consensus Layer