diff --git a/.github/actions/setup-and-build-nocheck/action.yml b/.github/actions/setup-and-build-nocheck/action.yml
index 739174ad6d..66aa83fe11 100644
--- a/.github/actions/setup-and-build-nocheck/action.yml
+++ b/.github/actions/setup-and-build-nocheck/action.yml
@@ -20,7 +20,10 @@ runs:
         path: |
           .local
           prover/server/proving-keys
-        key: ${{ runner.os }}-local-${{ hashFiles('scripts/install.sh') }}
+        key: ${{ runner.os }}-local-v3-${{ hashFiles('scripts/install.sh', 'prover/server/scripts/download_keys.sh') }}
+        restore-keys: |
+          ${{ runner.os }}-local-v3-
+          ${{ runner.os }}-local-v2-
 
     - name: Install dependencies
       if: steps.restore-local-cache.outputs.cache-hit != 'true'
@@ -28,13 +31,49 @@ runs:
       run: |
         ./scripts/install.sh
 
+    - name: Verify and repair installation
+      shell: bash
+      run: |
+        # Even if cache was restored, run install script to check and install missing components
+        # The install script now checks for actual file existence, so it will only install what's missing
+        echo "=== Verifying installation integrity ==="
+        ./scripts/install.sh --no-reset
+
+    - name: Validate environment setup
+      shell: bash
+      run: |
+        echo "=== Validating environment setup ==="
+        source ./scripts/devenv.sh
+
+        # Quick validation of critical components
+        [ -f "$GOROOT/bin/go" ] || { echo "✗ Go not found"; exit 1; }
+        [ -f "$CARGO_HOME/bin/cargo" ] || { echo "✗ Cargo not found"; exit 1; }
+        [ -d "prover/server/proving-keys" ] || { echo "✗ Proving keys not found"; exit 1; }
+
+        echo "✓ All critical components found"
+
     - name: Set local environment
       shell: bash
       run: |
         source ./scripts/devenv.sh
+        # Export critical environment variables for subsequent steps
+        echo "GOROOT=$GOROOT" >> $GITHUB_ENV
+        echo "CARGO_HOME=$CARGO_HOME" >> $GITHUB_ENV
+        echo "RUSTUP_HOME=$RUSTUP_HOME" >> $GITHUB_ENV
+        echo "PATH=$PATH" >> $GITHUB_ENV
+        echo "CARGO_FEATURES=$CARGO_FEATURES" >> $GITHUB_ENV
+        echo "REDIS_URL=$REDIS_URL" >> $GITHUB_ENV
 
     - name: Rust cache
       uses: swatinem/rust-cache@v2
+      with:
+        cache-all-crates: true
+        cache-on-failure: true
+        # Add workspace target directory
+        workspaces: |
+          . -> target
+          cli -> cli/target
+          examples -> examples/target
 
     - name: Setup pnpm
       uses: pnpm/action-setup@v4
@@ -42,35 +81,59 @@ runs:
         run_install: false
 
     - name: Get pnpm store directory
+      id: pnpm-store
       shell: bash
       run: |
-        echo "STORE_PATH=$(pnpm store path --silent)" >> $GITHUB_ENV
+        # Get the store path before any pnpm operations
+        STORE_PATH=$(pnpm store path --silent)
+        echo "STORE_PATH=${STORE_PATH}" >> $GITHUB_ENV
+        echo "path=${STORE_PATH}" >> $GITHUB_OUTPUT
 
-    - uses: actions/cache@v4
-      name: Setup pnpm cache
+    - name: Setup pnpm cache
+      id: pnpm-cache
+      uses: actions/cache@v4
       with:
-        path: ${{ env.STORE_PATH }}
-        key: ${{ runner.os }}-pnpm-store-${{ hashFiles('**/pnpm-lock.yaml') }}
+        path: ${{ steps.pnpm-store.outputs.path }}
+        key: ${{ runner.os }}-pnpm-store-${{ hashFiles('pnpm-lock.yaml') }}
         restore-keys: |
           ${{ runner.os }}-pnpm-store-
 
     - name: Install dependencies
       shell: bash
-      run: pnpm install
+      run: |
+        # Install dependencies
+        pnpm install --frozen-lockfile
+
+        # Validate node_modules was created
+        if [ ! -d "node_modules" ] || [ -z "$(ls -A node_modules 2>/dev/null)" ]; then
+          echo "Error: node_modules not created after pnpm install"
+          exit 1
+        fi
+
+    - name: Save pnpm cache
+      # Save cache even on failure to speed up retries
+      if: steps.pnpm-cache.outputs.cache-hit != 'true'
+      uses: actions/cache/save@v4
+      with:
+        path: ${{ steps.pnpm-store.outputs.path }}
+        key: ${{ runner.os }}-pnpm-store-${{ hashFiles('pnpm-lock.yaml') }}
 
     - name: Build and prepare for tests
       shell: bash
       run: |
         source ./scripts/devenv.sh
         mkdir -p /home/runner/.config/solana/
-        solana-keygen new --no-bip39-passphrase -o /home/runner/.config/solana/id.json
+        if [ ! -f /home/runner/.config/solana/id.json ]; then
+          solana-keygen new --no-bip39-passphrase -o /home/runner/.config/solana/id.json
+        fi
         npx nx build @lightprotocol/programs
         npx nx build @lightprotocol/zk-compression-cli
 
-    - name: Cache .local directory
-      uses: actions/cache@v4
+    - name: Save .local directory cache
+      if: steps.restore-local-cache.outputs.cache-hit != 'true'
+      uses: actions/cache/save@v4
       with:
         path: |
           .local
           prover/server/proving-keys
-        key: ${{ runner.os }}-local-${{ hashFiles('scripts/install.sh') }}
+        key: ${{ runner.os }}-local-v3-${{ hashFiles('scripts/install.sh', 'prover/server/scripts/download_keys.sh') }}
diff --git a/.github/actions/setup-and-build/action.yml b/.github/actions/setup-and-build/action.yml
index 460362f5fc..fb5e7469da 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:
+  skip-components:
+    description: 'Comma-separated list of components to skip (e.g., "redis,go"). If not specified, all components are installed.'
+    required: false
+    default: ""
+
 runs:
   using: "composite"
   steps:
@@ -22,52 +28,160 @@ runs:
         path: |
           .local
           prover/server/proving-keys
-        key: ${{ runner.os }}-local-${{ hashFiles('scripts/install.sh', 'prover/server/scripts/download_keys.sh') }}
+        key: ${{ runner.os }}-local-v3-${{ hashFiles('scripts/install.sh', 'prover/server/scripts/download_keys.sh') }}
+        restore-keys: |
+          ${{ runner.os }}-local-v3-
+          ${{ runner.os }}-local-v2-
 
-    - name: Install dependencies
+    - name: Install system dependencies
       shell: bash
       run: |
         sudo apt-get update
-        sudo apt-get install -y libudev-dev pkg-config
+        sudo apt-get install -y libudev-dev pkg-config build-essential
 
     - name: Install dependencies
       if: steps.restore-local-cache.outputs.cache-hit != 'true'
       shell: bash
       run: |
-        ./scripts/install.sh
+        if [ -n "${{ inputs.skip-components }}" ]; then
+          ./scripts/install.sh --skip-components "${{ inputs.skip-components }}"
+        else
+          ./scripts/install.sh
+        fi
+
+    - name: Verify and repair installation
+      shell: bash
+      run: |
+        # Even if cache was restored, run install script to check and install missing components
+        # The install script now checks for actual file existence, so it will only install what's missing
+        echo "=== Verifying installation integrity ==="
+        if [ -n "${{ inputs.skip-components }}" ]; then
+          ./scripts/install.sh --no-reset --skip-components "${{ inputs.skip-components }}"
+        else
+          ./scripts/install.sh --no-reset
+        fi
+
+    - name: Validate environment setup
+      shell: bash
+      run: |
+        echo "=== Validating environment setup ==="
+        source ./scripts/devenv.sh
+
+        # Check critical binaries exist
+        echo "Checking Go installation..."
+        if [ -f "$GOROOT/bin/go" ]; then
+          echo "✓ Go found at: $GOROOT/bin/go"
+          $GOROOT/bin/go version || echo "⚠ Go binary exists but failed to run"
+        else
+          echo "✗ Go not found at expected location: $GOROOT/bin/go"
+          exit 1
+        fi
+
+        echo "Checking Rust installation..."
+        if [ -f "$CARGO_HOME/bin/cargo" ]; then
+          echo "✓ Cargo found at: $CARGO_HOME/bin/cargo"
+          $CARGO_HOME/bin/cargo --version || echo "⚠ Cargo binary exists but failed to run"
+        else
+          echo "✗ Cargo not found at expected location: $CARGO_HOME/bin/cargo"
+          exit 1
+        fi
+
+        echo "Checking Node installation..."
+        which node && node --version || echo "⚠ Node not in PATH"
+
+        echo "Checking pnpm installation..."
+        which pnpm && pnpm --version || echo "⚠ pnpm not in PATH"
+
+        echo "Checking Solana installation..."
+        which solana && solana --version || echo "⚠ Solana not in PATH"
+
+        echo "Checking Anchor installation..."
+        which anchor && anchor --version || echo "⚠ Anchor not in PATH"
+
+        # Check proving keys
+        if [ -d "prover/server/proving-keys" ] && [ -n "$(ls -A prover/server/proving-keys 2>/dev/null)" ]; then
+          echo "✓ Proving keys found: $(ls prover/server/proving-keys | wc -l) files"
+        else
+          echo "✗ Proving keys directory missing or empty"
+          exit 1
+        fi
+
+        echo "=== Environment validation complete ==="
 
     - name: Set local environment
       shell: bash
       run: |
         source ./scripts/devenv.sh
+        # Export critical environment variables for subsequent steps
+        echo "GOROOT=$GOROOT" >> $GITHUB_ENV
+        echo "CARGO_HOME=$CARGO_HOME" >> $GITHUB_ENV
+        echo "RUSTUP_HOME=$RUSTUP_HOME" >> $GITHUB_ENV
+        echo "PATH=$PATH" >> $GITHUB_ENV
+        echo "CARGO_FEATURES=$CARGO_FEATURES" >> $GITHUB_ENV
+        echo "REDIS_URL=$REDIS_URL" >> $GITHUB_ENV
 
     - name: Rust cache
       uses: swatinem/rust-cache@v2
+      with:
+        cache-all-crates: true
+        cache-on-failure: true
+        # Add workspace target directory
+        workspaces: |
+          . -> target
+          cli -> cli/target
+          examples -> examples/target
 
     - name: Setup pnpm
       uses: pnpm/action-setup@v4
       with:
-        run_install: true
+        run_install: false
 
     - name: Get pnpm store directory
+      id: pnpm-store
       shell: bash
       run: |
-        echo "STORE_PATH=$(pnpm store path --silent)" >> $GITHUB_ENV
+        # Get the store path before any pnpm operations
+        STORE_PATH=$(pnpm store path --silent)
+        echo "STORE_PATH=${STORE_PATH}" >> $GITHUB_ENV
+        echo "path=${STORE_PATH}" >> $GITHUB_OUTPUT
 
-    - uses: actions/cache@v4
-      name: Setup pnpm cache
+    - name: Setup pnpm cache
+      id: pnpm-cache
+      uses: actions/cache@v4
       with:
-        path: ${{ env.STORE_PATH }}
-        key: ${{ runner.os }}-pnpm-store-${{ hashFiles('**/pnpm-lock.yaml') }}
+        path: ${{ steps.pnpm-store.outputs.path }}
+        key: ${{ runner.os }}-pnpm-store-${{ hashFiles('pnpm-lock.yaml') }}
         restore-keys: |
           ${{ runner.os }}-pnpm-store-
 
+    - name: Install dependencies
+      shell: bash
+      run: |
+        # Install dependencies with frozen lockfile for consistency
+        pnpm install --frozen-lockfile
+
+        # Validate node_modules was created
+        if [ ! -d "node_modules" ] || [ -z "$(ls -A node_modules 2>/dev/null)" ]; then
+          echo "Error: node_modules not created after pnpm install"
+          exit 1
+        fi
+
+    - name: Save pnpm cache
+      # Save cache even on failure to speed up retries
+      if: steps.pnpm-cache.outputs.cache-hit != 'true'
+      uses: actions/cache/save@v4
+      with:
+        path: ${{ steps.pnpm-store.outputs.path }}
+        key: ${{ runner.os }}-pnpm-store-${{ hashFiles('pnpm-lock.yaml') }}
+
     - name: Generate Solana keypair
       shell: bash
       run: |
         source ./scripts/devenv.sh
         mkdir -p /home/runner/.config/solana/
-        solana-keygen new --no-bip39-passphrase -o /home/runner/.config/solana/id.json
+        if [ ! -f /home/runner/.config/solana/id.json ]; then
+          solana-keygen new --no-bip39-passphrase -o /home/runner/.config/solana/id.json
+        fi
 
     - name: Copy spl_noop.so to target/deploy
       shell: bash
@@ -75,14 +189,25 @@ runs:
         mkdir -p ./target/deploy
         cp ./third-party/solana-program-library/spl_noop.so ./target/deploy/spl_noop.so
 
-    - name: Cache .local directory
+    - name: Build Rust programs
+      shell: bash
+      run: |
+        source ./scripts/devenv.sh
+        echo "Building Rust programs..."
+        npx nx build @lightprotocol/programs || {
+          echo "Failed to build programs, retrying with verbose output..."
+          npx nx build @lightprotocol/programs --verbose
+          exit 1
+        }
+
+    - name: Save .local directory cache
       if: steps.restore-local-cache.outputs.cache-hit != 'true'
-      uses: actions/cache@v4
+      uses: actions/cache/save@v4
       with:
         path: |
           .local
           prover/server/proving-keys
-        key: ${{ runner.os }}-local-${{ hashFiles('scripts/install.sh', 'prover/server/scripts/download_keys.sh') }}
+        key: ${{ runner.os }}-local-v3-${{ hashFiles('scripts/install.sh', 'prover/server/scripts/download_keys.sh') }}
 
     - name: Check for git changes
       shell: bash
diff --git a/.github/workflows/cli-v1.yml b/.github/workflows/cli-v1.yml
new file mode 100644
index 0000000000..018ac91842
--- /dev/null
+++ b/.github/workflows/cli-v1.yml
@@ -0,0 +1,87 @@
+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
+          key: nx-cli-v1-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'nx.json') }}
+          restore-keys: |
+            nx-cli-v1-${{ runner.os }}-
+
+      - name: Setup and build
+        uses: ./.github/actions/setup-and-build
+        with:
+          skip-components: "redis"
+
+      - 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..2f7fd728ef
--- /dev/null
+++ b/.github/workflows/cli-v2.yml
@@ -0,0 +1,87 @@
+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
+          key: nx-cli-v2-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'nx.json') }}
+          restore-keys: |
+            nx-cli-v2-${{ runner.os }}-
+
+      - name: Setup and build
+        uses: ./.github/actions/setup-and-build
+        with:
+          skip-components: "redis"
+
+      - 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/forester-tests.yml b/.github/workflows/forester-tests.yml
index 29e2c29d32..d078ea52e8 100644
--- a/.github/workflows/forester-tests.yml
+++ b/.github/workflows/forester-tests.yml
@@ -96,6 +96,8 @@ jobs:
       - uses: actions/checkout@v4
       - name: Setup and build
         uses: ./.github/actions/setup-and-build
+        with:
+          skip-components: "redis"
       - name: Clean build artifacts before tests
         shell: bash
         run: |
diff --git a/.github/workflows/js-v2.yml b/.github/workflows/js-v2.yml
new file mode 100644
index 0000000000..e6ecbc8f89
--- /dev/null
+++ b/.github/workflows/js-v2.yml
@@ -0,0 +1,92 @@
+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
+          key: nx-js-v2-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'nx.json') }}
+          restore-keys: |
+            nx-js-v2-${{ runner.os }}-
+
+      - name: Setup and build
+        uses: ./.github/actions/setup-and-build
+        with:
+          skip-components: "redis"
+
+      - 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..077ddfa0d0 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 +35,52 @@ 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
+          key: nx-js-v1-${{ runner.os }}-${{ hashFiles('pnpm-lock.yaml', 'nx.json') }}
+          restore-keys: |
+            nx-js-v1-${{ runner.os }}-
+
       - name: Setup and build
         uses: ./.github/actions/setup-and-build
+        with:
+          skip-components: "redis"
 
-      - 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/light-examples-tests.yml b/.github/workflows/light-examples-tests.yml
index 2c0d1d355a..ba06e8ae12 100644
--- a/.github/workflows/light-examples-tests.yml
+++ b/.github/workflows/light-examples-tests.yml
@@ -64,6 +64,8 @@ jobs:
 
       - name: Setup and build
         uses: ./.github/actions/setup-and-build
+        with:
+          skip-components: "redis"
 
       - name: build-programs
         run: |
diff --git a/.github/workflows/light-system-programs-tests.yml b/.github/workflows/light-system-programs-tests.yml
index a0c38ad6a4..0be5d51a2b 100644
--- a/.github/workflows/light-system-programs-tests.yml
+++ b/.github/workflows/light-system-programs-tests.yml
@@ -65,8 +65,12 @@ jobs:
             sub-tests: '["cargo-test-sbf -p compressed-token-test"]'
           - program: system-cpi-test
             sub-tests: '["cargo-test-sbf -p system-cpi-test"]'
-          - program: system-cpi-test-v2
-            sub-tests: '["cargo-test-sbf -p system-cpi-v2-test"]'
+          - program: system-cpi-test-v2-event
+            sub-tests: '["cargo-test-sbf -p system-cpi-v2-test -- event::parse"]'
+          - program: system-cpi-test-v2-functional
+            sub-tests: '["cargo-test-sbf -p system-cpi-v2-test -- functional_"]'
+          - program: system-cpi-test-v2-other
+            sub-tests: '["cargo-test-sbf -p system-cpi-v2-test -- --skip functional_ --skip event::parse"]'
           - program: random-e2e-test
             sub-tests: '["cargo-test-sbf -p e2e-test"]'
     steps:
@@ -75,6 +79,8 @@ jobs:
 
       - name: Setup and build
         uses: ./.github/actions/setup-and-build
+        with:
+          skip-components: "redis"
 
       - name: Build CLI
         run: |
diff --git a/.github/workflows/rust.yml b/.github/workflows/rust.yml
index 62775c9ba6..efa24bff78 100644
--- a/.github/workflows/rust.yml
+++ b/.github/workflows/rust.yml
@@ -35,17 +35,19 @@ jobs:
       matrix:
         group:
           - name: concurrent-merkle-tree
-            packages: light-concurrent-merkle-tree light-batched-merkle-tree
+            packages: light-concurrent-merkle-tree
             test_cmd: |
               cargo test -p light-concurrent-merkle-tree
+          - name: batched-merkle-tree-simulate
+            packages: light-batched-merkle-tree
+            test_cmd: |
               RUST_LOG=light_prover_client=debug cargo test -p light-batched-merkle-tree --features test-only -- --test test_simulate_transactions
-          - name: program-libs
+          - name: program-libs-fast
             packages:
-              aligned-sized light-bloom-filter light-hasher light-compressed-account light-account-checks \
-              light-verifier light-merkle-tree-metadata light-zero-copy light-hash-set light-indexed-merkle-tree light-batched-merkle-tree
+              aligned-sized light-hasher light-compressed-account light-account-checks \
+              light-verifier light-merkle-tree-metadata light-zero-copy light-hash-set
             test_cmd: |
               cargo test -p aligned-sized
-              cargo test -p light-bloom-filter --all-features
               cargo test -p light-hasher --all-features
               cargo test -p light-compressed-account --all-features
               cargo test -p light-account-checks  --all-features
@@ -53,6 +55,10 @@ jobs:
               cargo test -p light-merkle-tree-metadata --all-features
               cargo test -p light-zero-copy --features std
               cargo test -p light-hash-set --all-features
+          - name: program-libs-slow
+            packages: light-bloom-filter light-indexed-merkle-tree light-batched-merkle-tree
+            test_cmd: |
+              cargo test -p light-bloom-filter --all-features
               cargo test -p light-indexed-merkle-tree --all-features
               cargo test -p light-batched-merkle-tree --all-features -- --test test_e2e
           - name: sdk-libs
@@ -87,6 +93,8 @@ jobs:
 
       - name: Setup and build
         uses: ./.github/actions/setup-and-build
+        with:
+          skip-components: "redis"
 
       - name: Build CLI
         run: |
diff --git a/INSTALL.md b/INSTALL.md
new file mode 100644
index 0000000000..f3b779164e
--- /dev/null
+++ b/INSTALL.md
@@ -0,0 +1,34 @@
+Running `install.sh` is the first thing you should do after cloning this monorepo.
+
+```bash
+# Install all components (default)
+./scripts/install.sh
+
+# Install with all proving keys
+./scripts/install.sh --full-keys
+
+# Skip components (only use if you know what you are doing)
+./scripts/install.sh --skip-components "redis,keys,go"
+```
+
+## 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
+
+## CI Usage
+
+```yaml
+- name: Setup and build
+  uses: ./.github/actions/setup-and-build
+  with:
+    skip-components: "redis"
+```
diff --git a/cli/scripts/buildProver.sh b/cli/scripts/buildProver.sh
index 81a15019bf..d71ec31974 100755
--- a/cli/scripts/buildProver.sh
+++ b/cli/scripts/buildProver.sh
@@ -14,6 +14,13 @@ if [ ! -e "$out_dir" ]; then
     mkdir -p "$out_dir"
 fi
 
+# Check if proving keys exist before copying
+if [ ! -d "${gnark_dir}/proving-keys" ] || [ -z "$(ls -A "${gnark_dir}/proving-keys" 2>/dev/null)" ]; then
+    echo "ERROR: Proving keys not found at ${gnark_dir}/proving-keys"
+    echo "Please run: ./prover/server/scripts/download_keys.sh light"
+    exit 1
+fi
+
 cp -r "${gnark_dir}/proving-keys" "$out_dir"
 
 cd "$gnark_dir"
diff --git a/cli/src/utils/initTestEnv.ts b/cli/src/utils/initTestEnv.ts
index 47d16b6b35..a2356de889 100644
--- a/cli/src/utils/initTestEnv.ts
+++ b/cli/src/utils/initTestEnv.ts
@@ -149,7 +149,14 @@ export async function initTestEnv({
     const config = getConfig();
     config.proverUrl = `http://127.0.0.1:${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..6c824fce94 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);
 
@@ -22,7 +63,6 @@ export async function killProcess(processName: string) {
     }
   }
 
-  // Double-check if processes are still running
   const remainingProcesses = await find("name", processName);
   if (remainingProcesses.length > 0) {
     console.warn(
@@ -174,8 +214,12 @@ 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}`);
+      if (code !== 0 && binaryName.includes("prover")) {
+        console.error(`Prover process failed with exit code ${code}`);
+        await logProverFileContents();
+      }
     });
 
     return spawnedProcess;
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/devenv.sh b/scripts/devenv.sh
index 66c3867751..0349400d9c 100755
--- a/scripts/devenv.sh
+++ b/scripts/devenv.sh
@@ -2,7 +2,10 @@
 
 # Command to deactivate the devenv. It sets the old environment variables.
 deactivate () {
-    redis-stop
+    # Only try to stop redis if the command exists
+    if command -v redis-stop >/dev/null 2>&1; then
+        redis-stop 2>/dev/null || true
+    fi
 
     PS1="${LIGHT_PROTOCOL_OLD_PS1}"
     RUSTUP_HOME="${LIGHT_PROTOCOL_OLD_RUSTUP_HOME}"
@@ -24,15 +27,27 @@ deactivate () {
 if [ -z "${LIGHT_PROTOCOL_DEVENV:-}" ]; then
     LIGHT_PROTOCOL_DEVENV=1
 else
-    return
+    return 2>/dev/null || exit 0
 fi
 
 # The root of the git repository.
-LIGHT_PROTOCOL_TOPLEVEL="`git rev-parse --show-toplevel`"
+LIGHT_PROTOCOL_TOPLEVEL="$(git rev-parse --show-toplevel 2>/dev/null)"
+if [ -z "$LIGHT_PROTOCOL_TOPLEVEL" ]; then
+    echo "Error: Not in a git repository" >&2
+    return 1 2>/dev/null || exit 1
+fi
+
+# Verify the .local directory exists
+if [ ! -d "${LIGHT_PROTOCOL_TOPLEVEL}/.local" ]; then
+    echo "Error: .local directory not found. Please run ./scripts/install.sh first" >&2
+    return 1 2>/dev/null || exit 1
+fi
 
-# Shell prompt.
-LIGHT_PROTOCOL_OLD_PS1="${PS1:-}"
-PS1="[🧢 Light Protocol devenv] ${PS1:-}"
+# Shell prompt (only set if PS1 exists - not in CI)
+if [ -n "${PS1:-}" ]; then
+    LIGHT_PROTOCOL_OLD_PS1="${PS1}"
+    PS1="[🧢 Light Protocol devenv] ${PS1}"
+fi
 
 # Ensure that our rustup environment is used.
 LIGHT_PROTOCOL_OLD_RUSTUP_HOME="${RUSTUP_HOME:-}"
@@ -54,8 +69,10 @@ PATH="${LIGHT_PROTOCOL_TOPLEVEL}/.local/npm-global/bin:${PATH}"
 # Remove the original Rust-related PATH entries
 PATH=$(echo "$PATH" | tr ':' '\n' | grep -vE "/.rustup/|/.cargo/" | tr '\n' ':' | sed 's/:$//')
 
-# Define alias of `light` to use the CLI built from source.
-alias light="${LIGHT_PROTOCOL_TOPLEVEL}/cli/test_bin/run"
+# Define alias of `light` to use the CLI built from source (only if not in CI)
+if [ -z "${CI:-}" ]; then
+    alias light="${LIGHT_PROTOCOL_TOPLEVEL}/cli/test_bin/run"
+fi
 
 # Define GOROOT for Go.
 export GOROOT="${LIGHT_PROTOCOL_TOPLEVEL}/.local/go"
@@ -63,15 +80,35 @@ export GOROOT="${LIGHT_PROTOCOL_TOPLEVEL}/.local/go"
 # Ensure Rust binaries are in PATH
 PATH="${CARGO_HOME}/bin:${PATH}"
 
-# Export the modified PATH
+# Export all critical environment variables
 export PATH
+export RUSTUP_HOME
+export CARGO_HOME
+export NPM_CONFIG_PREFIX
+export LIGHT_PROTOCOL_TOPLEVEL
+export LIGHT_PROTOCOL_DEVENV
 
-export REDIS_URL="redis://localhost:6379"
+# Set Redis URL if not already set
+export REDIS_URL="${REDIS_URL:-redis://localhost:6379}"
 
 # Enable small_ix feature by default in devenv
-export CARGO_FEATURES="small_ix"
+export CARGO_FEATURES="${CARGO_FEATURES:-small_ix}"
 
+# macOS-specific settings
 if [[ "$(uname)" == "Darwin" ]]; then
     LIGHT_PROTOCOL_OLD_CPATH="${CPATH:-}"
     export CPATH="/Library/Developer/CommandLineTools/SDKs/MacOSX.sdk/usr/include:${CPATH:-}"
 fi
+
+# Validate critical tools are available (only warn, don't fail)
+if [ -z "${LIGHT_PROTOCOL_SKIP_VALIDATION:-}" ]; then
+    if ! command -v cargo >/dev/null 2>&1; then
+        echo "Warning: cargo not found in PATH. Run ./scripts/install.sh to install Rust." >&2
+    fi
+    if ! command -v go >/dev/null 2>&1; then
+        echo "Warning: go not found in PATH. Run ./scripts/install.sh to install Go." >&2
+    fi
+    if ! command -v node >/dev/null 2>&1; then
+        echo "Warning: node not found in PATH. Run ./scripts/install.sh to install Node.js." >&2
+    fi
+fi
diff --git a/scripts/install.sh b/scripts/install.sh
index bfed6da5a3..08ae190633 100755
--- a/scripts/install.sh
+++ b/scripts/install.sh
@@ -81,7 +81,8 @@ download() {
 }
 
 install_go() {
-    if ! is_installed "go"; then
+    # Check if Go is actually installed, not just logged
+    if [ ! -d "${PREFIX}/go" ] || [ ! -f "${PREFIX}/go/bin/go" ]; then
         echo "Installing Go..."
         local version=$(get_version "go")
         local suffix=$(get_suffix "go")
@@ -90,11 +91,14 @@ install_go() {
         tar -xzf "${PREFIX}/go.tar.gz" -C "${PREFIX}"
         rm "${PREFIX}/go.tar.gz"
         log "go"
+    else
+        echo "Go already installed, skipping..."
     fi
 }
 
 install_rust() {
-    if ! is_installed "rust"; then
+    # Check if Rust is actually installed
+    if [ ! -d "${PREFIX}/rustup" ] || [ ! -d "${PREFIX}/cargo" ] || [ ! -f "${PREFIX}/cargo/bin/cargo" ]; then
         echo "Installing Rust..."
         export RUSTUP_HOME="${PREFIX}/rustup"
         export CARGO_HOME="${PREFIX}/cargo"
@@ -105,11 +109,14 @@ install_rust() {
         cargo install cargo-expand --locked
         cargo install --git https://github.com/helius-labs/photon.git --rev cf58facb4e0521843e3afd21d09d8e7e7f772140 --locked
         log "rust"
+    else
+        echo "Rust already installed, skipping..."
     fi
 }
 
 install_node() {
-    if ! is_installed "node"; then
+    # Check if Node is actually installed
+    if [ ! -f "${PREFIX}/bin/node" ] || [ ! -f "${PREFIX}/bin/npm" ]; then
         echo "Installing Node.js..."
         local version=$(get_version "node")
         local suffix=$(get_suffix "node")
@@ -118,11 +125,14 @@ install_node() {
         tar -xzf "${PREFIX}/node.tar.gz" -C "${PREFIX}" --strip-components 1
         rm "${PREFIX}/node.tar.gz"
         log "node"
+    else
+        echo "Node.js already installed, skipping..."
     fi
 }
 
 install_pnpm() {
-    if ! is_installed "pnpm"; then
+    # Check if pnpm is actually installed
+    if [ ! -f "${PREFIX}/bin/pnpm" ]; then
         echo "Installing pnpm..."
         local version=$(get_version "pnpm")
         local suffix=$(get_suffix "pnpm")
@@ -130,11 +140,14 @@ install_pnpm() {
         download "$url" "${PREFIX}/bin/pnpm"
         chmod +x "${PREFIX}/bin/pnpm"
         log "pnpm"
+    else
+        echo "pnpm already installed, skipping..."
     fi
 }
 
 install_solana() {
-    if ! is_installed "solana"; then
+    # Check if Solana is actually installed
+    if [ ! -f "${PREFIX}/bin/solana" ] || [ ! -f "${PREFIX}/bin/solana-keygen" ]; then
         echo "Installing Solana..."
         local version=$(get_version "solana")
         local suffix=$(get_suffix "solana")
@@ -143,52 +156,67 @@ install_solana() {
         tar -xjf "${PREFIX}/solana-release.tar.bz2" -C "${PREFIX}/bin" --strip-components 2
         rm "${PREFIX}/solana-release.tar.bz2"
         log "solana"
+    else
+        echo "Solana already installed, skipping..."
     fi
 }
 
 install_anchor() {
-    if ! is_installed "anchor"; then
+    # Check if Anchor is actually installed
+    if [ ! -f "${PREFIX}/bin/anchor" ]; then
         echo "Installing Anchor..."
         local version=$(get_version "anchor")
         local suffix=$(get_suffix "anchor")
         local url="https://github.com/Lightprotocol/binaries/releases/download/${version}/anchor-${suffix}"
         download "$url" "${PREFIX}/bin/anchor"
         log "anchor"
+    else
+        echo "Anchor already installed, skipping..."
     fi
 }
 
 install_jq() {
-    if ! is_installed "jq"; then
+    # Check if jq is actually installed
+    if [ ! -f "${PREFIX}/bin/jq" ]; then
         echo "Installing jq..."
         local version=$(get_version "jq")
         local suffix=$(get_suffix "jq")
         local url="https://github.com/jqlang/jq/releases/download/${version}/${suffix}"
         download "$url" "${PREFIX}/bin/jq"
         log "jq"
+    else
+        echo "jq already installed, skipping..."
     fi
 }
 
 download_gnark_keys() {
-    if ! is_installed "gnark_keys"; then
+    ROOT_DIR="$(git rev-parse --show-toplevel)"
+    # Always check if keys actually exist, not just the install log
+    if [ ! -d "${ROOT_DIR}/prover/server/proving-keys" ] || [ -z "$(ls -A "${ROOT_DIR}/prover/server/proving-keys" 2>/dev/null)" ]; then
         echo "Downloading gnark keys..."
-        ROOT_DIR="$(git rev-parse --show-toplevel)"
-        "${ROOT_DIR}/prover/server/scripts/download_keys.sh" "$key_type"
+        "${ROOT_DIR}/prover/server/scripts/download_keys.sh" "$1"
         log "gnark_keys"
+    else
+        echo "Gnark keys already exist, skipping download..."
     fi
 }
 
 install_dependencies() {
-    if ! is_installed "dependencies"; then
+    # Check if node_modules exists and has content
+    if [ ! -d "node_modules" ] || [ -z "$(ls -A node_modules 2>/dev/null)" ]; then
         echo "Installing dependencies..."
         export PATH="${PREFIX}/bin:${PATH}"
         pnpm install
         log "dependencies"
+    else
+        echo "Dependencies already installed, skipping..."
     fi
 }
 
 
 install_redis() {
-    if ! is_installed "redis"; then
+    # Check if Redis is actually installed
+    if [ ! -f "${PREFIX}/bin/redis-server" ] || [ ! -f "${PREFIX}/bin/redis-cli" ]; then
         echo "Installing Redis..."
         local version=$(get_version "redis")
         local url="http://download.redis.io/releases/redis-${version}.tar.gz"
@@ -326,6 +354,8 @@ EOF
         chmod +x "${PREFIX}/bin/redis-start" "${PREFIX}/bin/redis-stop" "${PREFIX}/bin/redis-status"
         mkdir -p "${PREFIX}/etc" "${PREFIX}/var"
         log "redis"
+    else
+        echo "Redis already installed, skipping..."
     fi
 }
 
@@ -337,6 +367,8 @@ main() {
     # Parse command line arguments
     local key_type="light"
     local reset_log=true
+    local skip_components=""
+    
     while [[ $# -gt 0 ]]; do
         case $1 in
             --full-keys)
@@ -347,8 +379,18 @@ main() {
                 reset_log=false
                 shift
                 ;;
+            --skip-components)
+                if [ -z "$2" ] || [[ "$2" == --* ]]; then
+                    echo "Error: --skip-components requires a value"
+                    exit 1
+                fi
+                skip_components="$2"
+                shift 2
+                ;;
             *)
                 echo "Unknown option: $1"
+                echo "Usage: $0 [--full-keys] [--no-reset] [--skip-components <comma-separated-list>]"
+                echo "Components that can be skipped: go,rust,node,pnpm,solana,anchor,jq,keys,dependencies,redis"
                 exit 1
                 ;;
         esac
@@ -358,18 +400,28 @@ main() {
         rm -f "$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 skipped
+    should_skip() {
+        local component=$1
+        [[ ",$skip_components," == *",$component,"* ]]
+    }
+
+    # Install components unless explicitly skipped
+    should_skip "go" || install_go
+    should_skip "rust" || install_rust
+    should_skip "node" || install_node
+    should_skip "pnpm" || install_pnpm
+    should_skip "solana" || install_solana
+    should_skip "anchor" || install_anchor
+    should_skip "jq" || install_jq
+    should_skip "keys" || download_gnark_keys "$key_type"
+    should_skip "dependencies" || install_dependencies
+    should_skip "redis" || install_redis
 
     echo "✨ Light Protocol development dependencies installed"
+    if [ -n "$skip_components" ]; then
+        echo "   Skipped components: $skip_components"
+    fi
 }
 
-main
+main "$@"