RBF Pinning with Counterparties and Competing Interest



Summary:

The lightning protocol has a severe issue where a lightning counterparty could steal HTLC funds using the preimage with a low-fee, RBF-disabled transaction. This can be prevented by adding an RBF carve-out output to HTLC-Timeout or allowing B to add fees to HTLC-Timeout using SIGHASH_NOINPUT. B can exponentially increase the fee as L+1 approaches to prevent C from stealing the HTLC value. However, C can bribe a miner to prevent HTLC-Timeout from confirming between L and L+1, which is a censorship attack. Letting B bump the fee on HTLC-Timeout is precisely the mechanism that is needed to make it difficult for miners to censor transactions. Decker-Russell-Osuntokun sidesteps this issue as any timed-out HTLC can be claimed with a fee-bumpable transaction directly without RBF-carve-out. A Poon-Dryja channel can also be upgraded to a Decker-Russell-Osuntokun channel without onchain activity.


Updated on: 2023-06-14T00:36:45.520014+00:00