International Association
for Cryptologic Research

The paper defines a novel type of consensus for a distributed smart contract system, named RGB, which is based on the concept of client-side validation, separating the contract state and operations from the blockchain. With this approach, contracts are sharded (each contract is a standalone shard), kept, and validated only by contract participants, providing native scalability and privacy mechanisms, exceeding all existing blockchain-based smart contract systems while not compromising on security or decentralization. The system is designed to operate on top of compatible layers 1, such as an UTXO-based blockchain (e.g., Bitcoin) without relying on it for transaction ordering or state replication. Instead, RGB keeps the state client-side, operating as partially replicated state machines (PRiSM). It employs a novel SONIC (State machine with Ownership Notation Involving Capabilities) architecture, which provides capability-based access control to the contract state, individually owned and operated by a well-defined contract parties via novel single-use seal mechanism. RGB does state validation using zk-AluVM virtual machine, designed to support zk-STARK provers. It has a single security assumption of the collision-resistance hash function and, thus, is quantum-secure. The proposed RGB consensus is distinct from traditional blockchain-based smart contract systems; it is scalable, provably-secure, and formally verifiable.