Author: ZmnSCPxj 2018-12-27 16:01:37
Published on: 2018-12-27T16:01:37+00:00
In a conversation between Alex, Will, and ZmnSCPxj, the issue of cross-asset brokers charging a premium for brokerage is discussed. This implies that any failures after the swap will now have a cost, which can enable brokers to censor payments to payees they do not like. Additionally, cross-asset brokers require counterparties to issue them a symmetric but slightly more out-of-the-money call, which they can redeem in the event of a large FX swing, bounding their FX losses. However, it remains unclear why a payer would go through a cross-asset broker in a Lightning route if they already have the target asset. To address this issue, the possibility of creating a cryptographic protocol for atomically swapping information is suggested, as inspired by a paper called “Timed Commitments” by Dan Boneh. This protocol involves each party swapping a commitment to the information they want to atomically swap and then slowly revealing verifiable “hints” that make it easier and easier to brute force the commitment. However, this protocol may fail when there are intermediary nodes not controlled by the two trading parties. The use of HTLCs in Lightning routing is to enforce that the final payee actually gets paid, or nobody along the route gets paid.
Updated on: 2023-06-02T16:00:11.475435+00:00