diff --git a/.github/actions/setup-and-build/action.yml b/.github/actions/setup-and-build/action.yml
index 460362f5fc..1c4fd06593 100644
--- a/.github/actions/setup-and-build/action.yml
+++ b/.github/actions/setup-and-build/action.yml
@@ -1,6 +1,12 @@
 name: Setup and build
 description: Checkout sources, install dependencies, build and prepare for tests
 
+inputs:
+  components:
+    description: 'Comma-separated list of components to install (e.g., "node,pnpm,solana,anchor,jq,dependencies"). If not specified, all components are installed.'
+    required: false
+    default: ""
+
 runs:
   using: "composite"
   steps:
@@ -34,7 +40,11 @@ runs:
       if: steps.restore-local-cache.outputs.cache-hit != 'true'
       shell: bash
       run: |
-        ./scripts/install.sh
+        if [ -n "${{ inputs.components }}" ]; then
+          ./scripts/install.sh --components "${{ inputs.components }}"
+        else
+          ./scripts/install.sh
+        fi
 
     - name: Set local environment
       shell: bash
diff --git a/.github/workflows/cli-v1.yml b/.github/workflows/cli-v1.yml
new file mode 100644
index 0000000000..eca9daff02
--- /dev/null
+++ b/.github/workflows/cli-v1.yml
@@ -0,0 +1,89 @@
+on:
+  push:
+    branches:
+      - main
+  pull_request:
+    branches:
+      - "*"
+    types:
+      - opened
+      - synchronize
+      - reopened
+      - ready_for_review
+
+name: cli-tests-v1
+
+concurrency:
+  group: ${{ github.workflow }}-${{ github.ref }}
+  cancel-in-progress: true
+
+jobs:
+  cli-v1:
+    name: cli-v1
+    if: github.event.pull_request.draft == false
+    runs-on: ubuntu-latest
+
+    services:
+      redis:
+        image: redis:8.0.1
+        ports:
+          - 6379:6379
+        options: >-
+          --health-cmd "redis-cli ping"
+          --health-interval 10s
+          --health-timeout 5s
+          --health-retries 5
+
+    env:
+      LIGHT_PROTOCOL_VERSION: V1
+      REDIS_URL: redis://localhost:6379
+      CI: true
+
+    steps:
+      - name: Checkout sources
+        uses: actions/checkout@v4
+
+      - name: Cache nx
+        uses: actions/cache@v4
+        with:
+          path: |
+            .nx/cache
+            node_modules/.cache/nx
+            js/stateless.js/node_modules/.cache/nx
+            js/compressed-token/node_modules/.cache/nx
+            cli/node_modules/.cache/nx
+          key: nx-cli-v1-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'js/**/package.json', 'cli/package.json') }}-${{ github.sha }}
+          restore-keys: |
+            nx-cli-v1-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'js/**/package.json', 'cli/package.json') }}-
+            nx-cli-v1-${{ runner.os }}-
+
+      - name: Setup and build
+        uses: ./.github/actions/setup-and-build
+
+      - name: Build stateless.js with V1
+        run: |
+          source ./scripts/devenv.sh
+          cd js/stateless.js
+          pnpm build:v1
+
+      - name: Build compressed-token with V1
+        run: |
+          source ./scripts/devenv.sh
+          cd js/compressed-token
+          pnpm build:v1
+
+      - name: Build CLI with V1
+        run: |
+          source ./scripts/devenv.sh
+          npx nx build @lightprotocol/zk-compression-cli
+
+      - name: Run CLI tests with V1
+        run: |
+          source ./scripts/devenv.sh
+          npx nx test @lightprotocol/zk-compression-cli
+
+      - name: Display prover logs on failure
+        if: failure()
+        run: |
+          echo "=== Displaying prover logs ==="
+          find cli/test-ledger -name "*prover*.log" -type f -exec echo "=== Contents of {} ===" \; -exec cat {} \; -exec echo "=== End of {} ===" \; || echo "No prover logs found"
diff --git a/.github/workflows/cli-v2.yml b/.github/workflows/cli-v2.yml
new file mode 100644
index 0000000000..d2e4683e70
--- /dev/null
+++ b/.github/workflows/cli-v2.yml
@@ -0,0 +1,89 @@
+on:
+  push:
+    branches:
+      - main
+  pull_request:
+    branches:
+      - "*"
+    types:
+      - opened
+      - synchronize
+      - reopened
+      - ready_for_review
+
+name: cli-tests-v2
+
+concurrency:
+  group: ${{ github.workflow }}-${{ github.ref }}
+  cancel-in-progress: true
+
+jobs:
+  cli-v2:
+    name: cli-v2
+    if: github.event.pull_request.draft == false
+    runs-on: ubuntu-latest
+
+    services:
+      redis:
+        image: redis:8.0.1
+        ports:
+          - 6379:6379
+        options: >-
+          --health-cmd "redis-cli ping"
+          --health-interval 10s
+          --health-timeout 5s
+          --health-retries 5
+
+    env:
+      LIGHT_PROTOCOL_VERSION: V2
+      REDIS_URL: redis://localhost:6379
+      CI: true
+
+    steps:
+      - name: Checkout sources
+        uses: actions/checkout@v4
+
+      - name: Cache nx
+        uses: actions/cache@v4
+        with:
+          path: |
+            .nx/cache
+            node_modules/.cache/nx
+            js/stateless.js/node_modules/.cache/nx
+            js/compressed-token/node_modules/.cache/nx
+            cli/node_modules/.cache/nx
+          key: nx-cli-v2-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'js/**/package.json', 'cli/package.json') }}-${{ github.sha }}
+          restore-keys: |
+            nx-cli-v2-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'js/**/package.json', 'cli/package.json') }}-
+            nx-cli-v2-${{ runner.os }}-
+
+      - name: Setup and build
+        uses: ./.github/actions/setup-and-build
+
+      - name: Build stateless.js with V2
+        run: |
+          source ./scripts/devenv.sh
+          cd js/stateless.js
+          pnpm build:v2
+
+      - name: Build compressed-token with V2
+        run: |
+          source ./scripts/devenv.sh
+          cd js/compressed-token
+          pnpm build:v2
+
+      - name: Build CLI with V2
+        run: |
+          source ./scripts/devenv.sh
+          npx nx build @lightprotocol/zk-compression-cli
+
+      - name: Run CLI tests with V2
+        run: |
+          source ./scripts/devenv.sh
+          npx nx test @lightprotocol/zk-compression-cli
+
+      - name: Display prover logs on failure
+        if: failure()
+        run: |
+          echo "=== Displaying prover logs ==="
+          find . -path "*/test-ledger/*prover*.log" -type f -exec echo "=== Contents of {} ===" \; -exec cat {} \; -exec echo "=== End of {} ===" \; || echo "No prover logs found"
diff --git a/.github/workflows/js-v2.yml b/.github/workflows/js-v2.yml
new file mode 100644
index 0000000000..f698603cac
--- /dev/null
+++ b/.github/workflows/js-v2.yml
@@ -0,0 +1,94 @@
+on:
+  push:
+    branches:
+      - main
+  pull_request:
+    branches:
+      - "*"
+    types:
+      - opened
+      - synchronize
+      - reopened
+      - ready_for_review
+
+name: js-tests-v2
+
+concurrency:
+  group: ${{ github.workflow }}-${{ github.ref }}
+  cancel-in-progress: true
+
+jobs:
+  stateless-js-v2:
+    name: stateless-js-v2
+    if: github.event.pull_request.draft == false
+    runs-on: ubuntu-latest
+
+    services:
+      redis:
+        image: redis:8.0.1
+        ports:
+          - 6379:6379
+        options: >-
+          --health-cmd "redis-cli ping"
+          --health-interval 10s
+          --health-timeout 5s
+          --health-retries 5
+
+    env:
+      LIGHT_PROTOCOL_VERSION: V2
+      REDIS_URL: redis://localhost:6379
+      CI: true
+
+    steps:
+      - name: Checkout sources
+        uses: actions/checkout@v4
+
+      - name: Cache nx
+        uses: actions/cache@v4
+        with:
+          path: |
+            .nx/cache
+            node_modules/.cache/nx
+            js/stateless.js/node_modules/.cache/nx
+            js/compressed-token/node_modules/.cache/nx
+            cli/node_modules/.cache/nx
+          key: nx-js-v2-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'js/**/package.json', 'cli/package.json') }}-${{ github.sha }}
+          restore-keys: |
+            nx-js-v2-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'js/**/package.json', 'cli/package.json') }}-
+            nx-js-v2-${{ runner.os }}-
+
+      - name: Setup and build
+        uses: ./.github/actions/setup-and-build
+
+      - name: Build stateless.js with V2
+        run: |
+          source ./scripts/devenv.sh
+          cd js/stateless.js
+          pnpm build:v2
+
+      - name: Build compressed-token with V2
+        run: |
+          source ./scripts/devenv.sh
+          cd js/compressed-token
+          pnpm build:v2
+
+      - name: Build CLI
+        run: |
+          source ./scripts/devenv.sh
+          npx nx build @lightprotocol/zk-compression-cli
+
+      - name: Run stateless.js tests with V2
+        run: |
+          source ./scripts/devenv.sh
+          npx nx test @lightprotocol/stateless.js
+
+      - name: Run compressed-token tests with V2
+        run: |
+          source ./scripts/devenv.sh
+          npx nx test @lightprotocol/compressed-token
+
+      - name: Display prover logs on failure
+        if: failure()
+        run: |
+          echo "=== Displaying prover logs ==="
+          find . -path "*/test-ledger/*prover*.log" -type f -exec echo "=== Contents of {} ===" \; -exec cat {} \; -exec echo "=== End of {} ===" \; || echo "No prover logs found"
diff --git a/.github/workflows/js.yml b/.github/workflows/js.yml
index f8da21ae13..85169a05fb 100644
--- a/.github/workflows/js.yml
+++ b/.github/workflows/js.yml
@@ -11,15 +11,15 @@ on:
       - reopened
       - ready_for_review
 
-name: js-tests
+name: js-tests-v1
 
 concurrency:
   group: ${{ github.workflow }}-${{ github.ref }}
   cancel-in-progress: true
 
 jobs:
-  stateless-js:
-    name: stateless-js
+  stateless-js-v1:
+    name: stateless-js-v1
     if: github.event.pull_request.draft == false
     runs-on: ubuntu-latest
 
@@ -35,32 +35,54 @@ jobs:
           --health-retries 5
 
     env:
+      LIGHT_PROTOCOL_VERSION: V1
       REDIS_URL: redis://localhost:6379
+      CI: true
 
     steps:
       - name: Checkout sources
         uses: actions/checkout@v4
 
+      - name: Cache nx
+        uses: actions/cache@v4
+        with:
+          path: |
+            .nx/cache
+            node_modules/.cache/nx
+            js/stateless.js/node_modules/.cache/nx
+            js/compressed-token/node_modules/.cache/nx
+            cli/node_modules/.cache/nx
+          key: nx-js-v1-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'js/**/package.json', 'cli/package.json') }}-${{ github.sha }}
+          restore-keys: |
+            nx-js-v1-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'js/**/package.json', 'cli/package.json') }}-
+            nx-js-v1-${{ runner.os }}-
+
       - name: Setup and build
         uses: ./.github/actions/setup-and-build
 
-      - name: Build CLI
+      - name: Build stateless.js with V1
+        run: |
+          source ./scripts/devenv.sh
+          cd js/stateless.js
+          pnpm build:v1
+
+      - name: Build compressed-token with V1
         run: |
           source ./scripts/devenv.sh
-          npx nx build @lightprotocol/zk-compression-cli --skip-nx-cache
+          cd js/compressed-token
+          pnpm build:v1
 
-      # Comment for breaking changes to Photon
-      - name: Run CLI tests
+      - name: Build CLI
         run: |
           source ./scripts/devenv.sh
-          npx nx test @lightprotocol/zk-compression-cli
+          npx nx build @lightprotocol/zk-compression-cli
 
-      - name: Run stateless.js tests
+      - name: Run stateless.js tests with V1
         run: |
           source ./scripts/devenv.sh
           npx nx test @lightprotocol/stateless.js
 
-      - name: Run compressed-token tests
+      - name: Run compressed-token tests with V1
         run: |
           source ./scripts/devenv.sh
           npx nx test @lightprotocol/compressed-token
diff --git a/.github/workflows/release.yml b/.github/workflows/release.yml
index eec2218324..9f1bf76a3c 100644
--- a/.github/workflows/release.yml
+++ b/.github/workflows/release.yml
@@ -14,6 +14,8 @@ jobs:
 
       - name: Setup and build
         uses: ./.github/actions/setup-and-build
+        with:
+          components: "rust,node,pnpm,solana,anchor,jq,keys,dependencies"
 
       - name: Install cargo-workspaces
         run: |
diff --git a/cli/src/utils/initTestEnv.ts b/cli/src/utils/initTestEnv.ts
index 47d16b6b35..a2356de889 100644
--- a/cli/src/utils/initTestEnv.ts
+++ b/cli/src/utils/initTestEnv.ts
@@ -149,7 +149,14 @@ export async function initTestEnv({
     const config = getConfig();
     config.proverUrl = `http://127.0.0.1:${proverPort}`;
     setConfig(config);
-    await startProver(proverPort, proverRunMode, circuits);
+    try {
+      // TODO: check if using redisUrl is better here.
+      await startProver(proverPort, proverRunMode, circuits);
+    } catch (error) {
+      console.error("Failed to start prover:", error);
+      // Prover logs will be automatically displayed by spawnBinary in process.ts
+      throw error;
+    }
   }
 }
 
diff --git a/cli/src/utils/process.ts b/cli/src/utils/process.ts
index ec70832a36..f3055ced41 100644
--- a/cli/src/utils/process.ts
+++ b/cli/src/utils/process.ts
@@ -7,6 +7,47 @@ import { promisify } from "util";
 import axios from "axios";
 const waitOn = require("wait-on");
 
+const readdir = promisify(fs.readdir);
+const readFile = promisify(fs.readFile);
+
+/**
+ * Logs the contents of prover log files in test-ledger dir.
+ */
+export async function logProverFileContents() {
+  const testLedgerDir = path.join(__dirname, "../..", "test-ledger");
+
+  try {
+    if (!fs.existsSync(testLedgerDir)) {
+      console.log("test-ledger directory does not exist");
+      return;
+    }
+
+    const files = await readdir(testLedgerDir);
+
+    const proverFiles = files.filter((file) => file.includes("prover"));
+
+    if (proverFiles.length === 0) {
+      console.log("No prover log files found in test-ledger directory");
+      return;
+    }
+
+    for (const file of proverFiles) {
+      const filePath = path.join(testLedgerDir, file);
+      console.log(`\n========== Contents of ${file} ==========`);
+
+      try {
+        const contents = await readFile(filePath, "utf8");
+        console.log(contents);
+        console.log(`========== End of ${file} ==========\n`);
+      } catch (error) {
+        console.error(`Error reading ${file}:`, error);
+      }
+    }
+  } catch (error) {
+    console.error("Error accessing test-ledger directory:", error);
+  }
+}
+
 export async function killProcess(processName: string) {
   const processList = await find("name", processName);
 
@@ -174,8 +215,13 @@ export function spawnBinary(command: string, args: string[] = []) {
       detached: true,
     });
 
-    spawnedProcess.on("close", (code) => {
+    spawnedProcess.on("close", async (code) => {
       console.log(`${binaryName} process exited with code ${code}`);
+      // Log prover file contents if prover exits with non-zero code
+      if (code !== 0 && binaryName.includes("prover")) {
+        console.error(`Prover process failed with exit code ${code}`);
+        await logProverFileContents();
+      }
     });
 
     return spawnedProcess;
diff --git a/cli/src/utils/processProverServer.ts b/cli/src/utils/processProverServer.ts
index bdd7f0b84c..38359c2911 100644
--- a/cli/src/utils/processProverServer.ts
+++ b/cli/src/utils/processProverServer.ts
@@ -131,9 +131,17 @@ export async function startProver(
     args.push("--redis-url", redisUrl);
   }
 
-  spawnBinary(getProverPathByArch(), args);
-  await waitForServers([{ port: proverPort, path: "/" }]);
-  console.log(`Prover started successfully!`);
+  const proverProcess = spawnBinary(getProverPathByArch(), args);
+
+  try {
+    await waitForServers([{ port: proverPort, path: "/" }]);
+    console.log(`Prover started successfully!`);
+  } catch (error) {
+    console.error(
+      "Failed to start prover - prover logs will be displayed above",
+    );
+    throw error;
+  }
 }
 
 export function getProverNameByArch(): string {
diff --git a/js/compressed-token/package.json b/js/compressed-token/package.json
index 9b0fab25b5..f8fc8bad4c 100644
--- a/js/compressed-token/package.json
+++ b/js/compressed-token/package.json
@@ -78,8 +78,12 @@
     },
     "scripts": {
         "test": "pnpm test:e2e:all",
+        "test:v1": "LIGHT_PROTOCOL_VERSION=V1 pnpm test",
+        "test:v2": "LIGHT_PROTOCOL_VERSION=V2 pnpm test",
         "test-all": "vitest run",
         "test:unit:all": "EXCLUDE_E2E=true vitest run",
+        "test:unit:all:v1": "LIGHT_PROTOCOL_VERSION=V1 vitest run tests/unit --reporter=verbose",
+        "test:unit:all:v2": "LIGHT_PROTOCOL_VERSION=V2 vitest run tests/unit --reporter=verbose",
         "test-all:verbose": "vitest run --reporter=verbose",
         "test-validator": "./../../cli/test_bin/run test-validator --prover-run-mode rpc",
         "test-validator-skip-prover": "./../../cli/test_bin/run test-validator --skip-prover",
@@ -102,8 +106,12 @@
         "test:e2e:multi-pool": "pnpm test-validator && vitest run tests/e2e/multi-pool.test.ts --reporter=verbose",
         "test:e2e:all": "pnpm test-validator && vitest run tests/e2e/create-mint.test.ts && vitest run tests/e2e/mint-to.test.ts && vitest run tests/e2e/transfer.test.ts && vitest run tests/e2e/delegate.test.ts && vitest run tests/e2e/transfer-delegated.test.ts && vitest run tests/e2e/multi-pool.test.ts && vitest run tests/e2e/decompress-delegated.test.ts && pnpm test-validator-skip-prover && vitest run tests/e2e/compress.test.ts && vitest run tests/e2e/compress-spl-token-account.test.ts && vitest run tests/e2e/decompress.test.ts && vitest run tests/e2e/create-token-pool.test.ts && vitest run tests/e2e/approve-and-mint-to.test.ts && vitest run tests/e2e/rpc-token-interop.test.ts && vitest run tests/e2e/rpc-multi-trees.test.ts && vitest run tests/e2e/layout.test.ts && vitest run tests/e2e/select-accounts.test.ts",
         "pull-idl": "../../scripts/push-compressed-token-idl.sh",
-        "build": "rimraf dist && pnpm build:bundle",
-        "build:bundle": "rollup -c",
+        "build": "if [ \"$LIGHT_PROTOCOL_VERSION\" = \"V2\" ]; then LIGHT_PROTOCOL_VERSION=V2 pnpm build:bundle; else LIGHT_PROTOCOL_VERSION=V1 pnpm build:bundle; fi",
+        "build:bundle": "rimraf dist && rollup -c",
+        "build:v1": "LIGHT_PROTOCOL_VERSION=V1 pnpm build:stateless:v1 && LIGHT_PROTOCOL_VERSION=V1 pnpm build:bundle",
+        "build:v2": "LIGHT_PROTOCOL_VERSION=V2 pnpm build:stateless:v2 && LIGHT_PROTOCOL_VERSION=V2 pnpm build:bundle",
+        "build:stateless:v1": "cd ../stateless.js && pnpm build:v1",
+        "build:stateless:v2": "cd ../stateless.js && pnpm build:v2",
         "format": "prettier --write .",
         "lint": "eslint ."
     },
diff --git a/js/compressed-token/rollup.config.js b/js/compressed-token/rollup.config.js
index 4fac8ae5ef..f19a4b3c29 100644
--- a/js/compressed-token/rollup.config.js
+++ b/js/compressed-token/rollup.config.js
@@ -1,3 +1,4 @@
+/* global process */
 import typescript from '@rollup/plugin-typescript';
 import nodePolyfills from 'rollup-plugin-polyfill-node';
 import dts from 'rollup-plugin-dts';
@@ -6,6 +7,7 @@ import commonjs from '@rollup/plugin-commonjs';
 import alias from '@rollup/plugin-alias';
 import json from '@rollup/plugin-json';
 import terser from '@rollup/plugin-terser';
+import replace from '@rollup/plugin-replace';
 
 const rolls = (fmt, env) => ({
     input: 'src/index.ts',
@@ -22,6 +24,14 @@ const rolls = (fmt, env) => ({
         '@lightprotocol/stateless.js',
     ],
     plugins: [
+        replace({
+            preventAssignment: true,
+            values: {
+                __BUILD_VERSION__: JSON.stringify(
+                    process.env.LIGHT_PROTOCOL_VERSION || 'V1',
+                ),
+            },
+        }),
         json(),
         typescript({
             target: fmt === 'es' ? 'ES2022' : 'ES2017',
diff --git a/js/compressed-token/src/types.ts b/js/compressed-token/src/types.ts
index 65aa9fd6b1..09ff12f1cd 100644
--- a/js/compressed-token/src/types.ts
+++ b/js/compressed-token/src/types.ts
@@ -73,7 +73,6 @@ export type BatchCompressInstructionData = {
     bump: number;
 };
 
-
 export type MintToInstructionData = {
     recipients: PublicKey[];
     amounts: BN[];
diff --git a/js/compressed-token/src/utils/version-check.ts b/js/compressed-token/src/utils/version-check.ts
new file mode 100644
index 0000000000..41b0bc4f83
--- /dev/null
+++ b/js/compressed-token/src/utils/version-check.ts
@@ -0,0 +1,40 @@
+import { featureFlags, VERSION } from '@lightprotocol/stateless.js';
+
+/**
+ * Validates that the built version of stateless.js matches the expected version.
+ * Throws an error if there's a mismatch.
+ *
+ * @param expectedVersion - The version expected (defaults to LIGHT_PROTOCOL_VERSION env var or V1)
+ * @throws Error if the versions don't match
+ */
+export function validateVersionConsistency(expectedVersion?: string): void {
+    const expected =
+        expectedVersion || process.env.LIGHT_PROTOCOL_VERSION || VERSION.V1;
+    const actual = featureFlags.version.replace(/['"]/g, '');
+
+    if (actual !== expected) {
+        throw new Error(
+            `Version mismatch detected!\n` +
+                `Expected: ${expected} (from ${expectedVersion ? 'parameter' : 'LIGHT_PROTOCOL_VERSION env var'})\n` +
+                `Actual: ${actual} (from built stateless.js)\n\n` +
+                `This means stateless.js was built with ${actual} but you're trying to use ${expected}.\n` +
+                `Please rebuild both packages with the same version:\n` +
+                `  pnpm build:${expected.toLowerCase()}\n` +
+                `This command will automatically build both stateless.js and compressed-token with ${expected}.`,
+        );
+    }
+}
+
+/**
+ * Gets the current version from stateless.js
+ */
+export function getCurrentVersion(): string {
+    return featureFlags.version.replace(/['"]/g, '');
+}
+
+/**
+ * Checks if the current version is V2
+ */
+export function isV2(): boolean {
+    return featureFlags.isV2();
+}
diff --git a/js/compressed-token/tests/setup/version-check.ts b/js/compressed-token/tests/setup/version-check.ts
new file mode 100644
index 0000000000..9c1fdaedba
--- /dev/null
+++ b/js/compressed-token/tests/setup/version-check.ts
@@ -0,0 +1,16 @@
+import { validateVersionConsistency } from '../../src/utils/version-check';
+
+// Only used in tests.
+export default function setup() {
+    console.log('Checking version consistency...');
+
+    try {
+        validateVersionConsistency();
+        const expectedVersion = process.env.LIGHT_PROTOCOL_VERSION || 'V1';
+        console.log(`✅ Version check passed: Using ${expectedVersion}`);
+    } catch (error) {
+        console.error('❌ Version check failed:');
+        console.error(error.message);
+        process.exit(1);
+    }
+}
diff --git a/js/compressed-token/tests/unit/version.test.ts b/js/compressed-token/tests/unit/version.test.ts
new file mode 100644
index 0000000000..fd6b369116
--- /dev/null
+++ b/js/compressed-token/tests/unit/version.test.ts
@@ -0,0 +1,62 @@
+import { describe, it, expect, beforeAll } from 'vitest';
+import { featureFlags, VERSION } from '@lightprotocol/stateless.js';
+
+describe('Versioning', () => {
+    beforeAll(() => {
+        const expectedVersion =
+            process.env.LIGHT_PROTOCOL_VERSION || VERSION.V1;
+        const actualVersion = featureFlags.version.replace(/['"]/g, '');
+
+        if (actualVersion !== expectedVersion) {
+            throw new Error(
+                `Version mismatch detected!\n` +
+                    `Expected: ${expectedVersion} (from LIGHT_PROTOCOL_VERSION env var)\n` +
+                    `Actual: ${actualVersion} (from built stateless.js)\n\n` +
+                    `This means stateless.js was built with ${actualVersion} but you're trying to test with ${expectedVersion}.\n` +
+                    `Please rebuild stateless.js with the correct version:\n` +
+                    `  cd ../stateless.js && pnpm build:${expectedVersion.toLowerCase()}\n` +
+                    `Or use the compressed-token build command that handles this automatically:\n` +
+                    `  pnpm build:${expectedVersion.toLowerCase()}`,
+            );
+        }
+    });
+
+    it('should use version from stateless.js', () => {
+        console.log('Current version from stateless.js:', featureFlags.version);
+        console.log('isV2() from stateless.js:', featureFlags.isV2());
+        console.log(
+            'Environment variable:',
+            process.env.LIGHT_PROTOCOL_VERSION,
+        );
+
+        expect(featureFlags.version).toBeDefined();
+        const actualVersion = featureFlags.version.replace(/['"]/g, '');
+        expect([VERSION.V1, VERSION.V2]).toContain(actualVersion);
+    });
+
+    it('should respect LIGHT_PROTOCOL_VERSION environment variable', () => {
+        const expectedVersion =
+            process.env.LIGHT_PROTOCOL_VERSION || VERSION.V1;
+        const actualVersion = featureFlags.version.replace(/['"]/g, '');
+        expect(actualVersion).toBe(expectedVersion);
+    });
+
+    it('isV2() should return correct value', () => {
+        const actualVersion = featureFlags.version.replace(/['"]/g, '');
+        const expectedIsV2 = actualVersion === VERSION.V2;
+        expect(featureFlags.isV2()).toBe(expectedIsV2);
+    });
+
+    it('compressed-token should use the same version as stateless.js', () => {
+        const actualVersion = featureFlags.version.replace(/['"]/g, '');
+        const isV2 = featureFlags.isV2();
+
+        if (process.env.LIGHT_PROTOCOL_VERSION === 'V2') {
+            expect(actualVersion).toBe(VERSION.V2);
+            expect(isV2).toBe(true);
+        } else {
+            expect(actualVersion).toBe(VERSION.V1);
+            expect(isV2).toBe(false);
+        }
+    });
+});
diff --git a/js/compressed-token/vitest.config.ts b/js/compressed-token/vitest.config.ts
index 26a728edbe..3bbbf1ad7c 100644
--- a/js/compressed-token/vitest.config.ts
+++ b/js/compressed-token/vitest.config.ts
@@ -12,6 +12,7 @@ export default defineConfig({
         testTimeout: 350000,
         hookTimeout: 100000,
         reporters: ['verbose'],
+        globalSetup: './tests/setup/version-check.ts',
     },
     define: {
         'import.meta.vitest': false,
diff --git a/js/stateless.js/.eslintignore b/js/stateless.js/.eslintignore
index d2939734e4..26caad229d 100644
--- a/js/stateless.js/.eslintignore
+++ b/js/stateless.js/.eslintignore
@@ -1,3 +1,4 @@
 node_modules
 lib
 dist
+test-version.js
diff --git a/js/stateless.js/BUILD.md b/js/stateless.js/BUILD.md
new file mode 100644
index 0000000000..a3a6a37a08
--- /dev/null
+++ b/js/stateless.js/BUILD.md
@@ -0,0 +1,16 @@
+Stateless.js compiles with V1 API by default. To switch over to V2 endpoints (with backward compatibility for V1 state), run:
+
+```bash
+pnpm build:v2
+# or
+LIGHT_PROTOCOL_VERSION=V2 pnpm build
+```
+
+## Usage in Code
+
+```typescript
+// From rpc.ts
+const endpoint = featureFlags.isV2()
+    ? versionedEndpoint('getCompressedAccountV2')
+    : versionedEndpoint('getCompressedAccount');
+```
diff --git a/js/stateless.js/package.json b/js/stateless.js/package.json
index f5430e0bb9..b8a18226a2 100644
--- a/js/stateless.js/package.json
+++ b/js/stateless.js/package.json
@@ -87,7 +87,11 @@
     "scripts": {
         "test": "pnpm test:unit:all && pnpm test:e2e:all",
         "test-all": "vitest run",
+        "test:v1": "LIGHT_PROTOCOL_VERSION=V1 pnpm test",
+        "test:v2": "LIGHT_PROTOCOL_VERSION=V2 pnpm test",
         "test:unit:all": "vitest run tests/unit --reporter=verbose",
+        "test:unit:all:v1": "LIGHT_PROTOCOL_VERSION=V1 vitest run tests/unit --reporter=verbose",
+        "test:unit:all:v2": "LIGHT_PROTOCOL_VERSION=V2 vitest run tests/unit --reporter=verbose",
         "test:unit:tree-info": "vitest run tests/unit/utils/tree-info.test.ts --reporter=verbose",
         "test:conversions": "vitest run tests/unit/utils/conversion.test.ts --reporter=verbose",
         "test-validator": "./../../cli/test_bin/run test-validator --prover-run-mode rpc",
@@ -96,7 +100,7 @@
         "test:e2e:compress": "pnpm test-validator && vitest run tests/e2e/compress.test.ts --reporter=verbose",
         "test:e2e:test-rpc": "pnpm test-validator && vitest run tests/e2e/test-rpc.test.ts --reporter=verbose --bail=1",
         "test:e2e:rpc-interop": "pnpm test-validator && vitest run tests/e2e/rpc-interop.test.ts --reporter=verbose --bail=1",
-        "test:e2e:rpc-multi-trees": "pnpm test-validator && vitest run tests/e2e/rpc-multi-trees.test.ts",
+        "test:e2e:rpc-multi-trees": "pnpm test-validator && vitest run tests/e2e/rpc-multi-trees.test.ts --reporter=verbose --bail=1",
         "test:e2e:browser": "pnpm playwright test",
         "test:e2e:all": "pnpm test-validator && vitest run tests/e2e/test-rpc.test.ts && vitest run tests/e2e/compress.test.ts && vitest run tests/e2e/transfer.test.ts && vitest run tests/e2e/rpc-interop.test.ts && pnpm test-validator-skip-prover && vitest run tests/e2e/rpc-multi-trees.test.ts && vitest run tests/e2e/layout.test.ts && vitest run tests/e2e/safe-conversion.test.ts",
         "test:index": "vitest run tests/e2e/program.test.ts",
@@ -105,8 +109,10 @@
         "test:verbose": "vitest run --reporter=verbose",
         "test:testnet": "vitest run tests/e2e/testnet.test.ts --reporter=verbose",
         "pull-idls": "../../scripts/push-stateless-js-idls.sh && ../../scripts/push-compressed-token-idl.sh",
-        "build": "rimraf dist && pnpm build:bundle",
-        "build:bundle": "rollup -c",
+        "build": "if [ \"$LIGHT_PROTOCOL_VERSION\" = \"V2\" ]; then LIGHT_PROTOCOL_VERSION=V2 pnpm build:bundle; else LIGHT_PROTOCOL_VERSION=V1 pnpm build:bundle; fi",
+        "build:bundle": "rimraf dist && rollup -c",
+        "build:v1": "LIGHT_PROTOCOL_VERSION=V1 pnpm build:bundle",
+        "build:v2": "LIGHT_PROTOCOL_VERSION=V2 pnpm build:bundle",
         "format": "prettier --write .",
         "lint": "eslint ."
     },
diff --git a/js/stateless.js/rollup.config.js b/js/stateless.js/rollup.config.js
index c78a4a1ea1..c42b978ea9 100644
--- a/js/stateless.js/rollup.config.js
+++ b/js/stateless.js/rollup.config.js
@@ -1,11 +1,13 @@
+/* global process */
 import typescript from '@rollup/plugin-typescript';
 import nodePolyfills from 'rollup-plugin-polyfill-node';
 import dts from 'rollup-plugin-dts';
 import resolve from '@rollup/plugin-node-resolve';
 import commonjs from '@rollup/plugin-commonjs';
 import terser from '@rollup/plugin-terser';
-
+import replace from '@rollup/plugin-replace';
 import json from '@rollup/plugin-json';
+
 const rolls = (fmt, env) => ({
     input: 'src/index.ts',
     output: {
@@ -16,6 +18,14 @@ const rolls = (fmt, env) => ({
     },
     external: ['@solana/web3.js'],
     plugins: [
+        replace({
+            preventAssignment: true,
+            values: {
+                __BUILD_VERSION__: JSON.stringify(
+                    process.env.LIGHT_PROTOCOL_VERSION || 'V1',
+                ),
+            },
+        }),
         typescript({
             target: fmt === 'es' ? 'ES2022' : 'ES2017',
             outDir: `dist/${fmt}/${env}`,
diff --git a/js/stateless.js/src/constants.ts b/js/stateless.js/src/constants.ts
index af9041e6f4..b34cfaaff5 100644
--- a/js/stateless.js/src/constants.ts
+++ b/js/stateless.js/src/constants.ts
@@ -14,8 +14,24 @@ export enum VERSION {
  * Feature flags. Only use if you know what you are doing.
  */
 export const featureFlags = {
-    version: VERSION.V1,
-    isV2: () => featureFlags.version.toUpperCase() === 'V2',
+    version: ((): VERSION => {
+        // Check if we're in a build environment (replaced by rollup)
+        // eslint-disable-next-line no-constant-condition
+        if ('__BUILD_VERSION__' !== '__BUILD_' + 'VERSION__') {
+            return '__BUILD_VERSION__' as VERSION;
+        }
+        // Otherwise, check runtime environment variable (for tests)
+        if (
+            typeof process !== 'undefined' &&
+            process.env?.LIGHT_PROTOCOL_VERSION
+        ) {
+            return process.env.LIGHT_PROTOCOL_VERSION as VERSION;
+        }
+        // Default to V1
+        return VERSION.V1;
+    })(),
+    isV2: () =>
+        featureFlags.version.replace(/['"]/g, '').toUpperCase() === 'V2',
 };
 
 /**
@@ -24,7 +40,7 @@ export const featureFlags = {
  * or 'getCompressedAccountV2' (V2)
  */
 export const versionedEndpoint = (base: string) =>
-    featureFlags.version.toUpperCase() === 'V1' ? base : `${base}V2`;
+    featureFlags.isV2() ? `${base}V2` : base;
 
 export const FIELD_SIZE = new BN(
     '21888242871839275222246405745257275088548364400416034343698204186575808495617',
diff --git a/js/stateless.js/src/globals.d.ts b/js/stateless.js/src/globals.d.ts
new file mode 100644
index 0000000000..b2ba4b3072
--- /dev/null
+++ b/js/stateless.js/src/globals.d.ts
@@ -0,0 +1 @@
+declare const __BUILD_VERSION__: 'V1' | 'V2';
diff --git a/js/stateless.js/src/rpc.ts b/js/stateless.js/src/rpc.ts
index 9d57305700..9bc3660e5f 100644
--- a/js/stateless.js/src/rpc.ts
+++ b/js/stateless.js/src/rpc.ts
@@ -339,7 +339,7 @@ export const proverRequest = async (
     method: 'inclusion' | 'new-address' | 'combined',
     params: any = [],
     log = false,
-    publicInputHash: BN | undefined = undefined,
+    _publicInputHash: BN | undefined = undefined, // Not supported.
 ): Promise<ValidityProof> => {
     let logMsg: string = '';
 
@@ -1065,7 +1065,7 @@ export class Rpc extends Connection implements CompressionApiInterface {
                     stateTreeInfo,
                     bn(item.hash.toArray('be', 32)),
                     item.leafIndex,
-                    false,
+                    featureFlags.isV2() ? item.proveByIndex : false,
                 ),
                 item.owner,
                 bn(item.lamports),
@@ -1892,7 +1892,7 @@ export class Rpc extends Connection implements CompressionApiInterface {
                         .concat(value.addresses.map((r: any) => r.rootIndex)),
                     proveByIndices: value.accounts
                         .map((r: any) => r.rootIndex.proveByIndex)
-                        .concat(value.addresses.map((r: any) => false)),
+                        .concat(value.addresses.map((r: any) => false)), // addresses.proveByIndex is always false.
                     treeInfos: value.accounts
                         .map((r: any) => r.merkleContext)
                         .concat(
diff --git a/js/stateless.js/test-version.js b/js/stateless.js/test-version.js
new file mode 100644
index 0000000000..9f76abe3ec
--- /dev/null
+++ b/js/stateless.js/test-version.js
@@ -0,0 +1,20 @@
+#!/usr/bin/env node
+
+// Test script to verify the compiled version is correctly set
+import { featureFlags } from './dist/cjs/node/index.cjs';
+
+console.log('Testing build version...');
+console.log('featureFlags.version:', featureFlags.version);
+console.log('featureFlags.isV2():', featureFlags.isV2());
+
+const expectedVersion = process.env.EXPECTED_VERSION || 'V1';
+const actualVersion = featureFlags.version.replace(/['"]/g, '');
+if (actualVersion === expectedVersion) {
+    console.log(`✅ Success: Version is correctly set to ${expectedVersion}`);
+    process.exit(0);
+} else {
+    console.error(
+        `❌ Error: Expected version ${expectedVersion} but got ${actualVersion}`,
+    );
+    process.exit(1);
+}
diff --git a/js/stateless.js/tests/unit/version.test.ts b/js/stateless.js/tests/unit/version.test.ts
new file mode 100644
index 0000000000..76285d96fd
--- /dev/null
+++ b/js/stateless.js/tests/unit/version.test.ts
@@ -0,0 +1,27 @@
+import { describe, it, expect } from 'vitest';
+import { featureFlags, VERSION } from '../../src/constants';
+
+describe('Version System', () => {
+    it('should have version set', () => {
+        console.log('Current version:', featureFlags.version);
+        console.log('isV2():', featureFlags.isV2());
+        console.log(
+            'Environment variable:',
+            process.env.LIGHT_PROTOCOL_VERSION,
+        );
+
+        expect(featureFlags.version).toBeDefined();
+        expect([VERSION.V1, VERSION.V2]).toContain(featureFlags.version);
+    });
+
+    it('should respect LIGHT_PROTOCOL_VERSION environment variable', () => {
+        const expectedVersion =
+            process.env.LIGHT_PROTOCOL_VERSION || VERSION.V1;
+        expect(featureFlags.version).toBe(expectedVersion);
+    });
+
+    it('isV2() should return correct value', () => {
+        const expectedIsV2 = featureFlags.version === VERSION.V2;
+        expect(featureFlags.isV2()).toBe(expectedIsV2);
+    });
+});
diff --git a/nx.json b/nx.json
index 3c8bc1b96c..e5f23b2f79 100644
--- a/nx.json
+++ b/nx.json
@@ -9,7 +9,7 @@
   },
   "targetDefaults": {
     "build": {
-      "cache": false,
+      "cache": true,
       "inputs": [
         "noMarkdown",
         "^noMarkdown",
@@ -22,11 +22,14 @@
       "outputs": [
         "{workspaceRoot}/target/deploy",
         "{workspaceRoot}/target/idl",
-        "{workspaceRoot}/target/types"
+        "{workspaceRoot}/target/types",
+        "{projectRoot}/dist",
+        "{projectRoot}/lib",
+        "{projectRoot}/bin"
       ]
     },
     "test": {
-      "cache": false,
+      "cache": true,
       "inputs": [
         "noMarkdown",
         "^noMarkdown",
@@ -65,5 +68,17 @@
         "^noTestLedger"
       ]
     }
+  },
+  "daemon": {
+    "enabled": false
+  },
+  "tasksRunnerOptions": {
+    "default": {
+      "runner": "nx/tasks-runners/default",
+      "options": {
+        "cacheableOperations": ["build", "test"],
+        "cacheDirectory": ".nx/cache"
+      }
+    }
   }
 }
diff --git a/scripts/INSTALL.md b/scripts/INSTALL.md
new file mode 100644
index 0000000000..525626e8b9
--- /dev/null
+++ b/scripts/INSTALL.md
@@ -0,0 +1,40 @@
+# Component-Based Installation
+
+The `install.sh` script now supports selective component installation to reduce CI/CD times.
+
+## Usage
+
+```bash
+# Install all components (default)
+./scripts/install.sh
+
+# Install specific components only
+./scripts/install.sh --components "node,pnpm,dependencies"
+
+# Install with full keys
+./scripts/install.sh --full-keys --components "rust,solana,anchor"
+```
+
+## Available Components
+
+- `go` - Golang
+- `rust` - Rust toolchain
+- `node` - Node.js runtime
+- `pnpm` - Package manager
+- `solana` - Solana CLI tools
+- `anchor` - Anchor
+- `jq` - JSON processor
+- `keys` - Gnark proving keys
+- `dependencies` - all PNPM deps
+- `redis` - Redis server (not needed for some tests)
+
+## GitHub Actions Usage
+
+In workflow files, specify components via the `setup-and-build` action:
+
+```yaml
+- name: Setup and build
+  uses: ./.github/actions/setup-and-build
+  with:
+    components: "node,pnpm,solana,anchor,jq,keys,dependencies"
+```
diff --git a/scripts/devenv.sh b/scripts/devenv.sh
index 66c3867751..c164e39e98 100755
--- a/scripts/devenv.sh
+++ b/scripts/devenv.sh
@@ -66,6 +66,7 @@ PATH="${CARGO_HOME}/bin:${PATH}"
 # Export the modified PATH
 export PATH
 
+# Comment to start prover without redis
 export REDIS_URL="redis://localhost:6379"
 
 # Enable small_ix feature by default in devenv
diff --git a/scripts/install.sh b/scripts/install.sh
index bfed6da5a3..5dbe444988 100755
--- a/scripts/install.sh
+++ b/scripts/install.sh
@@ -337,6 +337,9 @@ main() {
     # Parse command line arguments
     local key_type="light"
     local reset_log=true
+    local components=""
+    local install_all=true
+    
     while [[ $# -gt 0 ]]; do
         case $1 in
             --full-keys)
@@ -347,6 +350,11 @@ main() {
                 reset_log=false
                 shift
                 ;;
+            --components)
+                components="$2"
+                install_all=false
+                shift 2
+                ;;
             *)
                 echo "Unknown option: $1"
                 exit 1
@@ -358,18 +366,28 @@ main() {
         rm -f "$INSTALL_LOG"
     fi
 
-    install_go
-    install_rust
-    install_node
-    install_pnpm
-    install_solana
-    install_anchor
-    install_jq
-    download_gnark_keys "$key_type"
-    install_dependencies
-    install_redis
+    # Helper function to check if component should be installed
+    should_install() {
+        local component=$1
+        if $install_all; then
+            return 0
+        fi
+        [[ ",$components," == *",$component,"* ]]
+    }
+
+    # Install components based on selection
+    should_install "go" && install_go
+    should_install "rust" && install_rust
+    should_install "node" && install_node
+    should_install "pnpm" && install_pnpm
+    should_install "solana" && install_solana
+    should_install "anchor" && install_anchor
+    should_install "jq" && install_jq
+    should_install "keys" && download_gnark_keys "$key_type"
+    should_install "dependencies" && install_dependencies
+    should_install "redis" && install_redis
 
     echo "✨ Light Protocol development dependencies installed"
 }
 
-main
+main "$@"