How do Kaspa covenants support stateful applications on-chain?

Kaspa covenants allow developers to encode application state directly inside UTXOs and enforce valid state transitions through covenant scripts. A UTXO is normally just a coin waiting to be spent, but with covenants it can also carry data representing where an application currently stands, and the covenant ensures it can only advance to a permitted next state. This means complex application logic can live on Kaspa's base layer rather than requiring a separate execution environment. For developers and users, it means applications built this way inherit the security of Kaspa's proof-of-work consensus instead of depending on an additional system with its own trust assumptions.