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How L2PS Transactions Are Handled

This page walks through the lifecycle of an L2PS transaction from client submission to L1 confirmation.

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Client-Side Encryption

Before any transaction leaves the user’s device, it is encrypted using AES-GCM (32-byte key, 12-byte IV, with the GCM authentication tag preserved alongside the ciphertext). The SDK API is the L2PS class from @kynesyslabs/demosdk/l2ps: 
import { Demos } from "@kynesyslabs/demosdk/websdk"
import L2PS from "@kynesyslabs/demosdk/l2ps"

// Connect to a node and a wallet
const demos = new Demos()
await demos.connect("https://node2.demos.sh")
await demos.connectWallet(mnemonic)

// Build the inner transaction (a normal Demos transaction)
const innerTx = await demos.transfer(
    "0xRecipient...",
    100_000_000_000n, // 100 DEM in OS
)

// Create or rejoin an L2PS instance with the shared subnet keys
const subnet = await L2PS.create(privateKeyHex, ivHex)

// Wrap the transaction in the L2PS encrypted envelope
const encryptedTx = await subnet.encryptTx(innerTx)
// encryptedTx.content.type === "l2psEncryptedTx"
// encryptedTx.content.data carries an L2PSEncryptedPayload:
//   { l2ps_uid, encrypted_data (base64 ciphertext),
//     tag (base64 GCM auth tag), original_hash }
For the full SDK reference (factory, instance registry, decrypt, config), see L2PS SDK.
The 32-byte AES key and the 12-byte IV must match exactly between every member of the subnet. If they don’t match, decryption fails and the transaction is rejected. Distribute these keys out-of-band — the SDK never transmits them.

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Node Processing

When an L2PS node receives an l2psEncryptedTx:

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Step 1: Decryption & Validation

The node looks up the subnet by l2ps_uid, decrypts the payload (AES-GCM verifies the auth tag — tampered ciphertext is rejected), then validates the inner transaction against L1 state (signature, nonce, balance) before executing it through the standard L2PS executor.

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Step 2: GCR Edit Generation

L2PS uses the Global Change Registry (GCR) architecture. Instead of mutating state directly, a transaction emits GCR edits: 
// GCR edits generated for a transfer (amounts in OS post-fork)
[
    { type: "balance_edit", account: "0xSender...",   delta: -101_000_000_000n }, // amount + 1 DEM L2PS fee
    { type: "balance_edit", account: "0xRecipient...", delta: +100_000_000_000n },
]
The 1 DEM L2PS fee is burned (not credited to any account). Total L2PS tx fee = L2PS_TX_FEE = 1 DEM per transaction.

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Step 3: Mempool Storage

Validated transactions enter the L2PS-specific mempool, keyed by hash and L2PS UID. The mempool stores the encrypted blob, the resolved GCR edits, and the current status (pending / batched / confirmed).

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Batch Aggregation

The L2PS Batch Aggregator runs per L1 block and bundles pending transactions:
1

Collect Transactions

Gather pending L2PS transactions from the mempool — capped at ZK_CIRCUIT_MAX_BATCH_SIZE = 10 per batch.
2

Aggregate GCR Edits

Combine all balance changes into a single set of GCR edits.
3

Generate ZK Proof

Create a PLONK proof verifying batch validity without revealing content.
4

Submit L1 Batch

Single L1 transaction submitted containing the proof and the batch hash.

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Configuration

SettingDefaultDescription
ZK_CIRCUIT_MAX_BATCH_SIZE10Maximum transactions per batch
L2PS_TX_FEE1 DEMPer-transaction fee (burned)

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ZK Proof Generation

Each batch carries a PLONK zero-knowledge proof. The proof verifies:
  • All inner-transaction signatures are valid
  • All GCR edits are arithmetically correct
  • No double-spending within the batch
  • Batch integrity (no tampering)
Proofs are generated against pre-computed proving keys per batch size (e.g. keys/batch_5/, keys/batch_10/).
ZK proofs let validators verify batch validity without seeing the actual transaction content.

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Consensus Integration

When a new L1 block is created, L2PS Consensus applies the batch:
  • Pending proofs for the block are loaded.
  • Each proof is verified.
  • The batch’s GCR edits are applied to L1 state via HandleGCR.apply(...).
  • Transaction statuses are advanced to confirmed.

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Transaction Status Flow

⚡ Executed (pending)

Validated locally, GCR edits generated (instant)

📦 Batched (batched)

Included in an L1 batch transaction (per block)

✓ Confirmed (confirmed)

L1 block finalized (final)
StatusMeaningReversible?
pendingValidated locally, GCR edits generatedYes (if batch fails)
batchedIncluded in an L1 batch transactionYes (if block fails)
confirmedL1 block finalizedNo

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Authenticated History Access

Unlike L1 transactions (public), L2PS history requires cryptographic proof of ownership: 
const timestamp = Date.now()
const message = `getL2PSHistory:${address}:${timestamp}`
const { data: signature } = await demos.signMessage(message)

const response = await demos.rpcCall({
    method: "getL2PSAccountTransactions",
    params: [{
        l2psUid: "testnet_l2ps_001",
        address,
        timestamp,
        signature,
    }],
})
If the signature is invalid or doesn’t match the requested address, the node returns 403 Access Denied.

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Data Separation

L2PS maintains strict data separation for privacy:

L2PS Participants

  • Store: Full encrypted transactions
  • Process: Decrypt locally
  • See: Transaction content

Validators

  • Store: Only batch hashes and proofs
  • Process: Verify ZK proofs
  • See: Zero transaction visibility

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Next Steps

Quick Start

Set up L2PS from scratch

L2PS SDK

Use L2PS in your application