Author: Christian Decker 2019-09-06 13:18:03
Published on: 2019-09-06T13:18:03+00:00
The recently published proof-of-concept of eltoo on signet by Richard has prompted Christian to share his thoughts on how to build this system. He believes that the clean separation of protocol layers provided by eltoo can reconcile many on-chain and off-chain concepts, allowing for the simplification of reasoning to build more complex functionality beyond simple hashed time-locked contracts (HTLCs). The update mechanism in eltoo does not bleed into other layers, unlike the penalty update mechanism which complicates the reasoning about security. With the clean separation from eltoo, they can concentrate on building the output scripts without having to thread penalties through them, thus reducing complexity and their on-chain footprint. Furthermore, eltoo provides a solid update layer ensuring agreed-upon states will eventually be reflected on-chain, allowing them to turn their attention to the next layer up: the negotiation layer. Each output in an agreed-upon state needs to be assigned one or more owners, who are the participants that need to sign off on removal of an output and the creation of new outputs redistributing the funds contained in the removed outputs to newly created outputs.Christian believes that using transactions as a means to represent off-chain negotiations and then applying them to the off-chain state via cut-through has several advantages over similar schemes, such as reusing tools already built for on-chain transactions and allowing for experimentation even inside a running eltoo instance. He sees a nice reconciliation between the off-chain model and the on-chain model, with many concepts cleanly mapping from one context to another. Overall, Christian thinks that building a nicely layered protocol stack that improves flexibility and simplifies the reasoning about their relative security is achievable using the properties of eltoo.
Updated on: 2023-05-20T20:56:17.640754+00:00