Author: Alexander Leishman 2018-12-27 14:02:02
Published on: 2018-12-27T14:02:02+00:00
In a recent post on the Lightning-dev mailing list, Alex proposed a potential solution for creating a cryptographic protocol for atomically swapping information. This idea was inspired by Dan Boneh's paper "Timed Commitments". The concept involves each party swapping a commitment to the information they want to swap and then slowly revealing verifiable “hints” that make it easier to brute force the commitment. The protocol does not currently exist in the Lightning network but appears feasible. However, there may be issues when intermediary nodes are involved. In response to this proposal, Will Yager suggested two possible solutions for cross-asset brokers: charging a standard option premium or requiring counterparties to issue a symmetric call which can be redeemed in the event of a large FX swing. It is worth noting that HTLCs allow for the creation of American Call Options.
Updated on: 2023-06-02T16:17:22.866259+00:00