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+---
+CIP: 167
+Title: Remove `isValid` from transactions
+Category: Ledger
+Authors:
+  - Teodora Danciu <teodora.danciu@iohk.io>
+  - Alexey Kuleshevich <alexey.kuleshevich@iohk.io>
+Implementors: N/A
+Status: Proposed
+Discussions:
+  - https://github.com/cardano-foundation/CIPs/pull/1089
+Created: 2025-09-01
+License: CC-BY-4.0
+---
+
+## Abstract
+
+We propose removing the `isValid` boolean from the CBOR encoding of standalone transactions (e.g. for mempool).
+This would not affect the serialization of the transactions within blocks, since isValid flag is already stored separately from the transaction
+
+## Motivation: why is this CIP necessary?
+
+The `isValid` flag in standalone transaction CBOR is not intrinsic to the protocol or to the lendger-consensus boundary:
+  * it is not signed by the transaction creator, so anyone can set it to any value they like.
+  * for block validation: the value that is used is the one that was set by the consensus protocol
+  * for remote submissions from untrusted nodes: the node ignores the incoming flag, evaluates the transaction as if `isValid = True`, if phase-2 fails for that reason alone - admits it to the mempool with `isValid = False` so collateral can be collected.
+
+The only remaining use is local submission from trusted clients (like cardano-cli), where the node reads the flag to avoid unintended collateral burn.
+This use is important, but perhaps the transaction bytes are not the best layer to encode that intent.
+
+Removing the flag simplifies encoding/decoding, slightly reduces on-wire size, and eliminates semantic ambiguity. Futhermore, because the flag is non-witnessed (excluded from the transaction ID), it cannot be trusted; keeping it invites inconsistency and confusion.
+
+## Specification
+
+Currently, a stand-alone transaction is serialized like this:
+
+```cddl
+transaction = [transaction_body, transaction_witness_set, bool, auxiliary_data/ nil]
+```
+
+The proposal is to change it to:
+```cddl
+transaction = [transaction_body, transaction_witness_set, auxiliary_data/ nil]
+```
+
+## Rationale: how does this CIP achieve its goals?
+
+Removing the `isValid` flag from standalone transaction serialization simplifies the wire format without changing consensus or ledger semantics.
+
+The trusted local client submission use case might be better expressed in a different way (for example, as a Node-to-Client submit parameter), rather than embedded in the transaction bytes.
+
+## Path to Active
+
+### Acceptance Criteria
+
+- [ ] Transaction serializers and deserializers in [cardano-ledger](https://github.com/IntersectMBO/cardano-ledger) are implemented such that they follow the cddl specification described above, and reflected in the cddl specs
+- [ ] The feature is integrated into [cardano-node](https://github.com/IntersectMBO/cardano-node) with necessary adjustments made to [ouroboros-consensus](https://github.com/IntersectMBO/ouroboros-consensus) and released as part of the Dijkstra era hard fork
+
+### Implementation Plan
+
+The implementation of this CIP should not proceed without an assessment of the potential impact on all the components that deserialise standalone transactions.
+
+## Copyright
+
+This CIP is licensed under [CC-BY-4.0](https://creativecommons.org/licenses/by/4.0/legalcode).
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