diff --git a/account/interfaces.go b/account/interfaces.go
index c4ad216..0b33858 100644
--- a/account/interfaces.go
+++ b/account/interfaces.go
@@ -41,6 +41,20 @@ type Reservation struct {
 	InitialBatchKey *btcec.PublicKey
 }
 
+// Version represents the version of an account.
+type Version uint8
+
+const (
+	// VersionInitialNoVersion is the initial version any legacy account has
+	// that technically wasn't versioned at all. The version field isn't
+	// even serialized for those accounts.
+	VersionInitialNoVersion Version = 0
+
+	// VersionTaprootEnabled is the version that introduced account
+	// versioning and the upgrade to Taproot (with MuSig2 multi-sig).
+	VersionTaprootEnabled Version = 1
+)
+
 // State describes the different possible states of an account.
 type State uint8
 
@@ -192,6 +206,9 @@ type Account struct {
 	// NOTE: This is only nil within the StateInitiated phase. There are no
 	// guarantees as to whether the transaction has its witness populated.
 	LatestTx *wire.MsgTx
+
+	// Version is the version of the account.
+	Version Version
 }
 
 const (
@@ -250,6 +267,7 @@ func (a *Account) Copy(modifiers ...Modifier) *Account {
 		State:         a.State,
 		HeightHint:    a.HeightHint,
 		OutPoint:      a.OutPoint,
+		Version:       a.Version,
 	}
 	if a.State != StateInitiated {
 		accountCopy.LatestTx = a.LatestTx.Copy()
@@ -318,6 +336,14 @@ func LatestTxModifier(tx *wire.MsgTx) Modifier {
 	}
 }
 
+// VersionModifier is a functional option that modifies the version of an
+// account.
+func VersionModifier(version Version) Modifier {
+	return func(account *Account) {
+		account.Version = version
+	}
+}
+
 // Store is responsible for storing and retrieving account information reliably.
 type Store interface {
 	// AddAccount adds a record for the account to the database.
diff --git a/account/interfaces_test.go b/account/interfaces_test.go
index fd9270d..f29ec7e 100644
--- a/account/interfaces_test.go
+++ b/account/interfaces_test.go
@@ -23,6 +23,7 @@ func TestAccountCopy(t *testing.T) {
 		HeightHint:    1,
 		OutPoint:      wire.OutPoint{Index: 1},
 		LatestTx:      wire.NewMsgTx(2),
+		Version:       VersionTaprootEnabled,
 	}
 
 	a.Value = 2
diff --git a/clientdb/account.go b/clientdb/account.go
index 71ec96f..08137e1 100644
--- a/clientdb/account.go
+++ b/clientdb/account.go
@@ -7,9 +7,22 @@ import (
 
 	"github.com/btcsuite/btcd/btcec/v2"
 	"github.com/lightninglabs/pool/account"
+	"github.com/lightningnetwork/lnd/tlv"
 	"go.etcd.io/bbolt"
 )
 
+const (
+	// accountStateVersionedMask is a bit mask for detecting from the state
+	// of an account whether that account has a version field encoded with
+	// it or not. We use the first bit of the uint8 state field because we
+	// are unlikely to ever have more than 127 different states.
+	accountStateVersionedMask account.State = 0b1000_0000
+
+	// accountVersionType is the first additional field we added to the
+	// account as a TLV field and it encodes the account's version.
+	accountVersionType tlv.Type = 0
+)
+
 var (
 	// accountBucketKey is the top level bucket where we can find all
 	// information about complete accounts. These accounts are indexed by
@@ -21,6 +34,23 @@ var (
 	ErrAccountNotFound = errors.New("account not found")
 )
 
+// isVersioned returns true if the version bit is set in the given account
+// state.
+func isVersioned(state account.State) bool {
+	return state&accountStateVersionedMask == accountStateVersionedMask
+}
+
+// setVersionBit sets the version bit in the given account state.
+func setVersionBit(state account.State) account.State {
+	return state | accountStateVersionedMask
+}
+
+// clearVersionBit clears the version bit in the given account state.
+func clearVersionBit(state account.State) account.State {
+	// The &^ operator means AND NOT, also known as the Bitclear operator.
+	return state &^ accountStateVersionedMask
+}
+
 // getAccountKey returns the key for an account which is not partial.
 func getAccountKey(account *account.Account) []byte {
 	return account.TraderKey.PubKey.SerializeCompressed()
@@ -156,9 +186,15 @@ func readAccount(sourceBucket *bbolt.Bucket,
 }
 
 func serializeAccount(w *bytes.Buffer, a *account.Account) error {
+	rawState := a.State
+	accountIsVersioned := a.Version > account.VersionInitialNoVersion
+	if accountIsVersioned {
+		rawState = setVersionBit(rawState)
+	}
+
 	err := WriteElements(
 		w, a.Value, a.Expiry, a.TraderKey, a.AuctioneerKey, a.BatchKey,
-		a.Secret, a.State, a.HeightHint, a.OutPoint,
+		a.Secret, rawState, a.HeightHint, a.OutPoint,
 	)
 	if err != nil {
 		return err
@@ -175,19 +211,107 @@ func serializeAccount(w *bytes.Buffer, a *account.Account) error {
 		}
 	}
 
+	// The version flag encoded within the state will inform the
+	// de-serialize method that it should read another field. Therefore, we
+	// can safely write it here.
+	if accountIsVersioned {
+		if err := serializeAccountTlvData(w, a); err != nil {
+			return err
+		}
+	}
+
+	return nil
+}
+
+// serializeAccountTlvData writes all additional TLV fields of an account to the
+// given writer. This should only be called for accounts with a version > 0 as
+// otherwise this will mess up the assumptions used for encoding/decoding
+// accounts within a batch snapshot blob.
+func serializeAccountTlvData(w *bytes.Buffer, a *account.Account) error {
+	version := uint8(a.Version)
+	tlvRecords := []tlv.Record{
+		tlv.MakePrimitiveRecord(accountVersionType, &version),
+	}
+
+	tlvStream, err := tlv.NewStream(tlvRecords...)
+	if err != nil {
+		return err
+	}
+
+	// We can't just encode the stream to the writer directly, because there
+	// might be multiple accounts lined up after each other. And since a TLV
+	// reader will always try to read until the end of a stream, we need to
+	// be able to cap it somehow. So we write the number of bytes and then
+	// the stream bytes itself.
+	var buf bytes.Buffer
+	err = tlvStream.Encode(&buf)
+	if err != nil {
+		return err
+	}
+
+	return WriteElements(w, uint32(buf.Len()), buf.Bytes())
+}
+
+// deserializeAccountTlvData reads all additional TLV fields of an account from
+// the given reader. This should only be called for accounts with a version > 0
+// as otherwise this will mess up the assumptions used for encoding/decoding
+// accounts within a batch snapshot blob.
+func deserializeAccountTlvData(r io.Reader, a *account.Account) error {
+	// We first need to find out how many bytes there are for this TLV
+	// stream and only read those bytes. Otherwise, the TLV reader will try
+	// to read as many bytes as it can.
+	var streamLen uint32
+	if err := ReadElement(r, &streamLen); err != nil {
+		return err
+	}
+
+	streamBytes := make([]byte, streamLen)
+	if err := ReadElement(r, streamBytes); err != nil {
+		return err
+	}
+
+	var (
+		version uint8
+	)
+	tlvStream, err := tlv.NewStream(
+		tlv.MakePrimitiveRecord(accountVersionType, &version),
+	)
+	if err != nil {
+		return err
+	}
+
+	parsedTypes, err := tlvStream.DecodeWithParsedTypes(
+		bytes.NewReader(streamBytes),
+	)
+	if err != nil {
+		return err
+	}
+
+	if t, ok := parsedTypes[accountVersionType]; ok && t == nil {
+		a.Version = account.Version(version)
+	}
+
 	return nil
 }
 
 func deserializeAccount(r io.Reader) (*account.Account, error) {
-	var a account.Account
+	var (
+		a        account.Account
+		rawState account.State
+	)
 	err := ReadElements(
 		r, &a.Value, &a.Expiry, &a.TraderKey, &a.AuctioneerKey,
-		&a.BatchKey, &a.Secret, &a.State, &a.HeightHint, &a.OutPoint,
+		&a.BatchKey, &a.Secret, &rawState, &a.HeightHint, &a.OutPoint,
 	)
 	if err != nil {
 		return nil, err
 	}
 
+	// We might have a version flag encoded within the state. We want to
+	// hide that internal mechanism from the caller, so we need to remove
+	// the flag again.
+	a.State = clearVersionBit(rawState)
+
 	// The latest transaction is not found within StateInitiated and
 	// StateCanceledAfterRecovery.
 	switch a.State {
@@ -199,5 +323,13 @@ func deserializeAccount(r io.Reader) (*account.Account, error) {
 		}
 	}
 
+	// If there was a version flag, we know we're supposed to read another
+	// field here.
+	if isVersioned(rawState) {
+		if err := deserializeAccountTlvData(r, &a); err != nil {
+			return nil, err
+		}
+	}
+
 	return &a, nil
 }
diff --git a/clientdb/account_test.go b/clientdb/account_test.go
index 3377474..502472d 100644
--- a/clientdb/account_test.go
+++ b/clientdb/account_test.go
@@ -130,6 +130,7 @@ func TestAccounts(t *testing.T) {
 		a, account.StateModifier(account.StatePendingOpen),
 		account.OutPointModifier(accountPoint),
 		account.LatestTxModifier(accountTx),
+		account.VersionModifier(account.VersionTaprootEnabled),
 	)
 	if err != nil {
 		t.Fatalf("unable to update account: %v", err)
diff --git a/clientdb/batch_snapshot.go b/clientdb/batch_snapshot.go
index d96587d..4efe8dd 100644
--- a/clientdb/batch_snapshot.go
+++ b/clientdb/batch_snapshot.go
@@ -94,7 +94,7 @@ type LocalBatchSnapshot struct {
 	MatchedOrders map[order.Nonce][]*order.MatchedOrder
 }
 
-// NewSnapshots creates a new LocalBatchSnapshot from the passed order batched.
+// NewSnapshot creates a new LocalBatchSnapshot from the passed order batched.
 func NewSnapshot(batch *order.Batch, ourOrders []order.Order,
 	accounts []*account.Account) (*LocalBatchSnapshot, error) {
 
diff --git a/clientdb/batch_snapshot_test.go b/clientdb/batch_snapshot_test.go
index 7879b37..7831efa 100644
--- a/clientdb/batch_snapshot_test.go
+++ b/clientdb/batch_snapshot_test.go
@@ -27,6 +27,17 @@ var (
 		State:         account.StateInitiated,
 		HeightHint:    1,
 	}
+	testAccountTaproot = &account.Account{
+		Value:         btcutil.SatoshiPerBitcoin,
+		Expiry:        1337,
+		TraderKey:     testTraderKeyDesc,
+		AuctioneerKey: testAuctioneerKey,
+		BatchKey:      testBatchKey,
+		Secret:        sharedSecret,
+		State:         account.StateInitiated,
+		HeightHint:    1,
+		Version:       account.VersionTaprootEnabled,
+	}
 
 	testNonce1 = order.Nonce([32]byte{1, 1, 1})
 	testNonce2 = order.Nonce([32]byte{2, 2, 2})
@@ -35,6 +46,7 @@ var (
 
 	testAccounts = map[[33]byte]*account.Account{
 		testRawTraderKeyArr: testAccount,
+		{1, 2, 3}:           testAccountTaproot,
 	}
 
 	testOrders = map[order.Nonce]order.Order{
diff --git a/clientdb/codec.go b/clientdb/codec.go
index 954b2b4..31d7d4d 100644
--- a/clientdb/codec.go
+++ b/clientdb/codec.go
@@ -56,6 +56,9 @@ func WriteElement(w *bytes.Buffer, element interface{}) error {
 	case account.State:
 		return lnwire.WriteElement(w, uint8(e))
 
+	case account.Version:
+		return lnwire.WriteElement(w, uint8(e))
+
 	case order.Version:
 		return lnwire.WriteElement(w, uint32(e))
 
@@ -152,6 +155,13 @@ func ReadElement(r io.Reader, element interface{}) error { // nolint:gocyclo
 		}
 		*e = account.State(s)
 
+	case *account.Version:
+		var v uint8
+		if err := lnwire.ReadElement(r, &v); err != nil {
+			return err
+		}
+		*e = account.Version(v)
+
 	case *order.Version:
 		var v uint32
 		if err := lnwire.ReadElement(r, &v); err != nil {