From pm+lists at acinq.fr  Mon Sep 14 13:35:02 2015
From: pm+lists at acinq.fr (Pierre)
Date: Mon, 14 Sep 2015 15:35:02 +0200
Subject: [Lightning-dev] Atomic swap
Message-ID: <CAMXsxZNa6kSTzLecSrwGb15yq+kvB7Rkq9ZN3K1JkKte8wwUrw@mail.gmail.com>

Hello there,

I've been thinking about how we could implement the idea some brilliant
people had here :
https://bitcointalk.org/index.php?topic=1134319.msg11966748#msg11966748.

Basically it would allow to securely move funds in/out an existing channel.

The main use cases would include:
1) funding balanced channels
2) provide a way for merchants to seamlessy cash out their funds

I can't see why we couldn't use the existing htlc contracts to implement
this, it is just another payment after all. But I am certainly missing
something ;-)

Here is what it would look like with rusty-style protobuf messages (swap
in/out are pretty much symmetrical) :

* SWAP IN *

// Whoever wishes to increase her balance in the channel sends this
swap_in_offer {
    // How much I would like to increase my balance
    required uint32 amount = 1;
    // The hash that will be used to do the atomic swap
    required sha256_hash r_hash = 2;
    // txid of the swap tx, should that be mutated the sender would only be
screwing over himself
    required sha256_hash txid = 3;
}

swap_in_accept {
    // Maybe we should specify a mindepth here
}

swap_in_decline {
    oneof reason {
        // the other party needs to be able to compensate the swap in the
channel
        bool cannot_swap_more_than_balance = 1;
    };
}

regular swap in flow :

Bob -> Alice : swap_in_offer
Alice -> Bob : swap_in_accept
(Bob publishes the swap tx, which pays <amount> BTC to (<alice_final_key> &
r) OR (refund & TIMEOUT))
(tx reaches mindepth)
(alice makes sure the scriptpubkey of this tx indeeds pays her providing r)
Alice -> Bob : update_add_htlc (with same amount and r_hash)
Bob -> Alice : update_accept
Bob -> Alice : update_fulfill_htlc  (reveals the r)
(Alice spends the swap tx)

----------------------------------------------------------

* SWAP OUT *

// Whoever wishes to move funds outside the channel sends this
swap_out_offer {
    // I would like to cash out this amount
    required uint32 amount = 1;
}

swap_out_accept {
    // The hash that will be used to do the atomic swap
    required sha256_hash r_hash = 1;
    // txid of the swap tx, should that be mutated the sender would only be
screwing over himself
    required sha256_hash txid = 2;
}

swap_out_decline {
    oneof reason {
        // you can't get more than your balance !
        bool cannot_swap_more_than_balance = 1;
        // the other party needs to have corresponding funds available
outside of the channel (meaning it has in fact twice the funds)
        bool funds_not_available = 2;
  };
}

regular swap out flow :

Bob -> Alice : swap_out_offer
Alice -> Bob : swap_out_accept
(Alice publishes the swap tx, which pays <amount> BTC to (<bob_final_key> &
r) OR (refund & TIMEOUT))
(tx reached mindepth)
(bob makes sure the scriptpubkey of this tx indeeds pays him providing r)
Bob -> Alice : update_add_htlc (with same amount and r_hash)
Alice -> Bob : update_accept
Alice -> Bob : update_fulfill_htlc (reveals the r)
(Bob spends the swap tx)


Cheers,

Pierre
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