Published on: 2021-07-11T04:10:00+00:00
In a recent email exchange, Jeremy Rubin proposed two solutions to improve the sequence space for Eltoo channels. The first solution involves creating a Taproot tree with N copies of the state update protocol, allowing for a random path through which leaf is being used. This increases privacy but only achieves 5 bits of added sequence space compared to the prior approach. The second solution involves using a continuation state where one signs a move to a new update key, providing 32 bits worth of updates before forwarding to a new contract with an extra transaction. However, this method increases resolution time linearly.To mitigate the increase in resolution time, Rubin suggests a "semitrusted burst mode" with a counterparty. In this mode, parties move to sequence M+1 and enter a burst with 32 bits of sequences to blow through. They then indicate to the other party to terminate the burst at a certain internal state number and sign M+2, reflecting the last state at that internal state number. This protocol also improves privacy as top-level state numbers do not strongly reflect the number of payments made.The email thread also discusses using an Eltoo "trampoline" to get around the CSV restriction. By initiating a burst session and always including a third branch, it allows for 32 bits worth of updates before forwarding to a new contract with an additional transaction. However, this method adds CSV layers and increases resolution time linearly. To address this, the suggestion is to use the "semitrusted burst mode" with a counterparty.Overall, these solutions provide ways to extend the sequence space for Eltoo channels without going on-chain, but they come with considerations such as privacy, resolution time, and potential risks with malicious peers. Mitigations such as entering burst mode with long-lived peers, having a higher channel balance than the counterparty, and limiting the percentage of liquidity moved during a burst can help address these risks.
Updated on: 2023-07-31T23:35:29.650854+00:00