diff --git a/lib/bcoin/block.js b/lib/bcoin/block.js
index 2b4d67f0..ad581d40 100644
--- a/lib/bcoin/block.js
+++ b/lib/bcoin/block.js
@@ -23,6 +23,22 @@ function Block(data, subtype) {
   this.tx = [];
   this.invalid = false;
 
+  if (this.subtype === 'block') {
+    var self = this;
+    this.txs = data.txs || [];
+    this.txs = this.txs.map(function(tx) {
+      tx = bcoin.tx(tx);
+      tx.block = self.hash('hex');
+      tx.ts = tx.ts || self.ts;
+      return tx;
+    });
+    this.hashes = this.txs.map(function(tx) {
+      return tx.hash('hex');
+    });
+    this.tx = this.hashes.slice();
+    this.invalid = !this._checkBlock();
+  }
+
   this._hash = null;
 
   // Verify partial merkle tree and fill `ts` array
@@ -64,6 +80,10 @@ Block.prototype.hasTX = function hasTX(hash) {
 Block.prototype._verifyMerkle = function verifyMerkle() {
   var height = 0;
 
+  if (this.subtype === 'block') {
+    return;
+  }
+
   // Count leafs
   for (var i = this.totalTX; i > 0; i >>= 1)
     height++;
@@ -138,3 +158,65 @@ Block.fromJSON = function fromJSON(json) {
 
   return block;
 };
+
+Block.prototype._buildMerkle = function buildMerkle() {
+  var merkleTree = [];
+  for (var i = 0; i < this.txs.length; i++) {
+    merkleTree.push(this.txs[i].hash('hex'));
+  }
+  var j = 0;
+  for (var size = this.txs.length; size > 1; size = ((size + 1) / 2) | 0) {
+    for (var i = 0; i < size; i += 2) {
+      var i2 = Math.min(i + 1, size - 1);
+      var hash = utils.dsha256(merkleTree[j+i] + merkleTree[j+i2], 'hex');
+      merkleTree.push(utils.toHex(hash));
+    }
+    j += size;
+  }
+  return merkleTree;
+};
+
+// This mimics the behavior of CheckBlockHeader()
+// and CheckBlock() in bitcoin/src/main.cpp.
+Block.prototype._checkBlock = function checkBlock() {
+  // Check proof of work matches claimed amount
+  if (!utils.testTarget(this.bits, this.hash())) {
+    return false;
+  }
+
+  // Check timestamp
+  if (this.ts > (Date.now() / 1000) + 2 * 60 * 60) {
+    return false;
+  }
+
+  // Size of all txs cant be bigger than MAX_BLOCK_SIZE
+  if (this.txs.length > bcoin.protocol.constants.block.maxSize) {
+    return false;
+  }
+
+  // First TX must be a coinbase
+  if (this.txs[0].inputs.length !== 1 || +this.txs[0].inputs[0].out.hash !== 0) {
+    return false;
+  }
+
+  // The rest of the txs must not be coinbases
+  for (var i = 1; i < this.txs.length; i++) {
+    if (this.txs[i].inputs.length === 1 && +this.txs[i].inputs[0].out.hash === 0) {
+      return false;
+    }
+  }
+
+  // Build MerkleTree
+  this.merkleTree = this._buildMerkle();
+
+  // Check for duplicate tx ids
+  var unique = {};
+  for (var i = 0; i < this.txs.length; i++) {
+    var hash = this.txs[i].hash('hex');
+    if (unique[hash]) return false;
+    unique[hash] = true;
+  }
+
+  // Check merkle root
+  return this.merkleTree[this.merkleTree.length-1] === this.merkleRoot;
+};
diff --git a/lib/bcoin/chain.js b/lib/bcoin/chain.js
index db40ab22..88551ecc 100644
--- a/lib/bcoin/chain.js
+++ b/lib/bcoin/chain.js
@@ -17,6 +17,7 @@ function Chain(options) {
   this.prefix = 'bt/chain/';
   this.storage = this.options.storage;
   this.strict = this.options.strict || false;
+  this.cacheLimit = this.options.cacheLimit || 2000;
   this.block = {
     list: [],
 
@@ -256,12 +257,12 @@ Chain.prototype.add = function add(block) {
 };
 
 Chain.prototype._compress = function compress() {
-  // Keep at least 1000 blocks and at most 2000
-  if (this.block.list.length < 2000)
+  // Keep at least 1000 blocks and at most 2000 by default
+  if (this.block.list.length < this.cacheLimit)
     return;
 
   // Bloom filter rebuilt is needed
-  this.block.list = this.block.list.slice(-1000);
+  this.block.list = this.block.list.slice(-(this.cacheLimit / 2 | 0));
   this.block.bloom.reset();
 
   for (var i = 0; i < this.block.list.length; i++)
diff --git a/lib/bcoin/peer.js b/lib/bcoin/peer.js
index e6770e75..cc36a162 100644
--- a/lib/bcoin/peer.js
+++ b/lib/bcoin/peer.js
@@ -161,6 +161,19 @@ Peer.prototype.broadcast = function broadcast(items) {
 };
 
 Peer.prototype.updateWatch = function updateWatch() {
+  if (!this.pool.options.relay) {
+    if (this.ack) {
+      var self = this;
+      if (this.pool.block.lastHash)
+        this.loadBlocks([ self.pool.block.lastHash ], 0);
+      else
+        this.pool.chain.getLast(function(hash) {
+          self.loadBlocks([ hash ], 0);
+        });
+    }
+    return;
+  }
+
   if (this.ack)
     this._write(this.framer.filterLoad(this.bloom, 'none'));
 };
@@ -417,6 +430,15 @@ Peer.prototype._handleInv = function handleInv(items) {
   });
   this.emit('blocks', blocks);
 
+  if (!this.pool.options.relay) {
+    if (txs.length)
+      this.emit('txs', txs.map(function(tx) {
+        return tx.hash;
+      }));
+    this.getData(items);
+    return;
+  }
+
   if (txs.length === 0)
     return;
 
diff --git a/lib/bcoin/pool.js b/lib/bcoin/pool.js
index 471eafe0..a21185c9 100644
--- a/lib/bcoin/pool.js
+++ b/lib/bcoin/pool.js
@@ -13,6 +13,7 @@ function Pool(options) {
   EventEmitter.call(this);
 
   this.options = options || {};
+  this.options.relay = this.options.relay !== false;
   this.storage = this.options.storage;
   this.destroyed = false;
   this.size = options.size || 32;
@@ -35,7 +36,12 @@ function Pool(options) {
   };
   this.maxRetries = options.maxRetries || 42;
   this.requestTimeout = options.requestTimeout || 10000;
-  this.chain = new bcoin.chain({ storage: this.storage });
+  this.chain = new bcoin.chain({
+    storage: this.storage,
+    // Since regular blocks contain transactions and full merkle
+    // trees, it's risky to cache 2000 blocks. Let's do 100.
+    cacheLimit: !this.options.relay ? 100 : null
+  });
   this.watchMap = {};
   this.bloom = new bcoin.bloom(8 * 1024,
                                10,
@@ -293,6 +299,12 @@ Pool.prototype._addPeer = function _addPeer(backoff) {
     self.emit('block', block, peer);
   });
 
+  if (!this.options.relay) {
+    peer.on('block', function(block) {
+      peer.emit('merkleblock', block);
+    });
+  }
+
   // Just FYI
   peer.on('reject', function(payload) {
     self.emit('reject', payload, peer);
diff --git a/lib/bcoin/protocol/constants.js b/lib/bcoin/protocol/constants.js
index a3be0e7b..0842b379 100644
--- a/lib/bcoin/protocol/constants.js
+++ b/lib/bcoin/protocol/constants.js
@@ -147,3 +147,9 @@ exports.hashType = {
   single: 3,
   anyonecaypay: 0x80
 };
+
+exports.block = {
+  maxSize: 1000000,
+  maxSigops: 1000000 / 50,
+  maxOrphanTx: 1000000 / 100
+};
diff --git a/lib/bcoin/protocol/framer.js b/lib/bcoin/protocol/framer.js
index d75b80c0..4970e645 100644
--- a/lib/bcoin/protocol/framer.js
+++ b/lib/bcoin/protocol/framer.js
@@ -128,7 +128,7 @@ function varint(arr, value, off) {
     arr[off + 4] = value >>> 24;
     return 5;
   } else {
-    p[off] = 0xff;
+    arr[off] = 0xff;
     utils.writeU64(arr, value, off + 1);
     return 9;
   }
@@ -303,11 +303,11 @@ Framer.block = function _block(block, type) {
   assert.equal(off, 76);
   off += writeU32(p, block.nonce, off);
 
-  // txn_count (spec says this is a varint for some reason)
   assert.equal(off, 80);
-  off += writeU32(p, block.totalTX, off);
 
   if (type === 'merkleblock') {
+    // txn_count
+    off += writeU32(p, block.totalTX, off);
     // hash count
     assert.equal(off, 84);
     off += varint(p, block.hashes.length, off);
@@ -323,6 +323,15 @@ Framer.block = function _block(block, type) {
     block.flags.forEach(function(flag) {
       p[off++] = flag;
     });
+  } else if (type === 'block') {
+    // txn_count
+    off += varint(p, block.totalTX, off);
+    // txs
+    block.txs.forEach(function(tx) {
+      tx._raw.forEach(function(ch) {
+        p[off++] = ch;
+      });
+    });
   }
 
   return p;
diff --git a/lib/bcoin/protocol/parser.js b/lib/bcoin/protocol/parser.js
index 8238b436..4bceca0f 100644
--- a/lib/bcoin/protocol/parser.js
+++ b/lib/bcoin/protocol/parser.js
@@ -218,6 +218,17 @@ Parser.prototype.parseBlock = function parseBlock(p) {
   if (p.length < 84)
     return this._error('Invalid block size');
 
+  var result = readIntv(p, 80);
+  var off = result.off;
+  var totalTX = result.r;
+  var txs = [];
+
+  for (var i = 0; i < totalTX; i++) {
+    var tx = this.parseTX(p.slice(off));
+    off += tx._off;
+    txs.push(tx);
+  }
+
   return {
     version: readU32(p, 0),
     prevBlock: p.slice(4, 36),
@@ -225,7 +236,8 @@ Parser.prototype.parseBlock = function parseBlock(p) {
     ts: readU32(p, 68),
     bits: readU32(p, 72),
     nonce: readU32(p, 76),
-    totalTX: readU32(p, 80)
+    totalTX: totalTX,
+    txs: txs
   };
 };
 
@@ -316,7 +328,8 @@ Parser.prototype.parseTX = function parseTX(p) {
     version: readU32(p, 0),
     inputs: txIn,
     outputs: txOut,
-    lock: readU32(p, off)
+    lock: readU32(p, off),
+    _off: off + 4
   };
 };