What does the covenant of grace signify in Christianity?

The covenant of grace is a divine agreement established by God, where He commits to saving His elect through faith in Jesus Christ. This is illustrated in Genesis 9:12-13, where God sets the rainbow as a token of His promise. Throughout scripture, particularly in Hebrews 8:6-12, we see how God’s grace through Christ fulfills and surpasses the former covenant based on law. The assurance of salvation in this covenant establishes a relationship with God characterized by grace, mercy, and faithfulness.