How does Kaspa's KIP-20 distinguish a continuation output from a genesis output?

A KIP-20 transaction output is classified as either a continuation output or a genesis output depending on whether the UTXO it spends already carries a covenant ID. If the spent UTXO entry has a covenant ID set, the new output is a continuation — it carries the same covenant lineage forward. If the spent UTXO has no covenant ID, the output is a genesis — it starts a fresh covenant and must pass the genesis validation rules. The distinction matters because continuation outputs and genesis outputs follow different validation paths, so knowing which category an output falls into determines exactly which rules Kaspa's consensus will apply to it.

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