Thomas Voegtlin [ARCHIVE] on Nostr: 📅 Original date posted:2023-06-20 🗒️ Summary of this message: Thomas proposes ...

📅 Original date posted:2023-06-20
🗒️ Summary of this message: Thomas proposes leveling the competition between Lightning service providers by allowing reverse submarine swap payments from any wallet. He suggests pre-payment of mining fees can be combined with 0-conf. Updating Bolt 12 makes more sense than updating Bolt 11.
📝 Original message:
Hello Bastien,

Thank you for the clarification; indeed I might not have been clear
about the fact that senders need to understand the new fields.

What you are suggesting (solution 2, blacklisting non-cooperative
clients and playing with the mempool) is prone to griefing attacks and
it requires manpower and infrastructure not necessarily affordable by
small companies. I would also be surprised if that is the approach
used by ACINQ.

I believe pre-payment of the mining fee can be combined with 0-conf;
I am not sure why you picture them as opposed? Even with BOLT-12, I
don't see 0-conf going away.

We have not implemented BOLT-12 yet in Electrum. Would you care to
describe whether bundled payments already would work with the current
specification, or whether they would require changes to BOLT-12? We
are going to implement BOLT-12 support in Electrum in the coming
months, and I would be happy to help here.

I believe that it will take years *after it is merged*, until BOLT-12
actually becomes the dominant payment method on Lightning. OTOH, if
this feature was adopted in BOLT-11, I think it could be deployed much
faster.

The goal of my proposal is to level the field of competition between
Lightning service providers, by allowing reverse submarine swap
payments to come from any wallet (of course, a dedicated client will
still be needed to verify the redeem script and the invoice, and to
sweep the funds, as discussed above), and by allowing JIT channels to
be provided by companies who do not distribute a dedicated wallet that
trusts them.

In this context, making this proposal happen earlier rather than later
could have a significant impact on the shape of the ecosystem. It
remains to be seen how this is understood by everybody.

cheers,

Thomas





On 15.06.23 11:01, Bastien TEINTURIER wrote:
> Hi Thomas,
>
> First of all, I'd like to highlight something that may not be obvious
> from your email, and is actually pretty important: your proposal
> requires *senders* to be aware that the payment will lead to a channel
> creation (or a splice) on the *receiver* end. In particular, it requires
> all existing software used by senders to be updated. For this reason, I
> think extending Bolt 12 (which requires new sender code anyway) makes
> more sense than updating Bolt 11.
>
> I see only three strategies to provide JIT liquidity (by opening a new
> channel or making a splice, I'll only use the open channel case below
> for simplicity):
>
> 1. Ask receiver for the preimage and a fee, then open a channel and
> push the HTLC amount minus the fee
> 2. Open a channel, then forward the HTLC amount minus a fee
> 3. Pre-pay fee, then open a channel and forward the whole HTLC amount
> on that channel
>
> What is currently deployed on the network is 1) and 2), while you're
> proposing 3). Both 1) and 2) have the advantages that the sender doesn't
> need to be aware that JIT liquidity is happening, and doesn't need to do
> anything special for that payment, which is the main reason those
> strategies were chosen.
>
> If all you're concerned about is trust and regulation, solution 2) works
> fine as long as the mempool isn't empty: if the user doesn't release the
> preimage after you've opened the channel, you should just blacklist that
> channel, reject payments made to it, and double-spend it whenever you
> have another on-chain transaction to make (and use 1 sat/byte for JIT
> liquidity transactions). Even if the mempool is empty, if your LSP has
> transactions to make at every block, it's likely that it will succeed
> at double-spending the faulty channel, and thus won't lose anything.
>
> But I agree that this only works when coupled with 0-conf. If we're not
> using 0-conf anymore, pre-paying fees would make more sense. But we will
> likely keep on using 0-conf at least until Bolt 12 is deployed, so it
> seems more reasonable to include this new feature in Bolt 12 rather than
> Bolt 11, since all implementations are actively working on this?
>
> Cheers,
> Bastien
>
> Le jeu. 15 juin 2023 à 10:52, Thomas Voegtlin <thomasv at electrum.org> a
> écrit :
>
>> Hello Matt,
>>
>> I think it is not too late to add a new feature to BOLT-11. In any
>> case, the belief that BOLT-11 is ossified should not be a reason to
>> make interactive something that fundamentally does not require more
>> interactivity than what BOLT-11 already offers. Technical decisions
>> should be dictated by technical needs, and I am a minimalist when it
>> comes to adding new messages to protocols.
>>
>> I believe that two major implementations have an incentive to support
>> this proposal (although I cannot speak for them):
>> - Lightning Labs could potentially offer their Loop service to
>> non-LND users.
>> - ACINQ would be able to open channels to Phoenix users without
>> requesting the preimage first. This would put them on the safe side
>> of the upcoming MICA regulation; I cannot emphasize enough how
>> important that is.
>>
>> In addition, you could certainly decide to support that feature in
>> LDK, and I can speak for Electrum :-)
>>
>> It is the first time I suggest a change to the Lightning protocol, and
>> what I am proposing is really a tiny change. All we need is a new
>> invoice feature, that describes the prepayment of a fee using a
>> different preimage. This feature does not need to be set on all
>> invoices, and it could be made optional during a transition period.
>>
>> Here is how that feature could possibly made optional:
>> - a new feature bit is defined, BUNDLE_PREPAYMENT
>> - two extra fields are defined: prepayment_amount, prepayment_hash
>> - if the sender does not support BUNDLE_PREPAYMENT and the feature is
>> optional, it ignores the new fields
>> - if the sender support BUNDLE_PREPAYMENT:
>> - sender sends (amount - prepayment_amount) with payment_hash
>> - sender sends prepayment_amount with prepayment_hash
>>
>> The decision to make this feature required or optional remains with
>> the service provider. I can see how submarine swap providers who are
>> already exposed to the mining fee griefing attack could decide to make
>> it optional for a transition period.
>>
>> cheers,
>> Thomas
>>
>>
>> Regarding your question (a) about the distinction between splice-out
>> and submarine swaps: Submarine swaps make it possible to add receiving
>> capacity to a channel.
>>
>>
>>
>>
>> On 14.06.23 19:28, Matt Corallo wrote:
>>> I think the ship has probably sailed on getting any kind of new
>> interoperable change in to BOLT-11.
>>>
>>> We already can't get amount-less BOLT-11 invoices broadly supported,
>> rolling out yet another new incompatible version of BOLT-11 and expecting
>> the entire ecosystem to support it doesn't seem all that likely.
>>>
>>> If we're working towards specifying some "standard" way of doing swaps,
>> (a) I'd be curious to understand why the need isn't obviated by splice-out,
>> and (b) why it shouldn't be built on OMs so you can do it more privately.
>>>
>>> Matt
>>>
>>> On 6/13/23 1:10 AM, Thomas Voegtlin wrote:
>>>> Good morning list,
>>>>
>>>> I would like to propose an extension to BOLT-11, where an invoice can
>> contain two bundled payments, with distinct preimages and amounts.
>>>>
>>>> The use case is for services that require the prepayment of a mining
>> fee in order for a non-custodian exchange to take place:
>>>> - Submarine swaps
>>>> - JIT channels
>>>>
>>>> In both cases, the service provider receives a HTLC for which they do
>> not have the preimage, have to send funds on-chain (to the channel or
>> submarine swap funding address), and wait for the client to reveal the
>> preimage when they claim the payment. Because there is no guarantee that
>> the client will actually claim the payment, the service providers need to
>> ask prepayment of mining fees.
>>>>
>>>> In the case of submarine swaps, services that use dedicated client
>> software, such as Loop by Lightning Labs, can ask for a prepayment, because
>> their software can handle it (this is called "no show penalty" on the Loop
>> website). However, competitors who do require a dedicated wallet, not such
>> as the Boltz exchange, cannot do that. Their website shows an invoice to
>> the user, whose wallet that is agnostic about the swap, and it would be
>> unpractical for them to show two invoices to be paid simultaneously. This
>> creates a situation where Boltz is vulnerable to DoS attacks, where the
>> attacker forces them to pay on-chain fees.
>>>>
>>>> In the case of JIT channels, providers who want to protect themselves
>> against this mining fee attack need to ask the preimage of the main payment
>> before they open the channel. I believe this is what Phoenix does (although
>> their pay-to-open service is not open-source, so I cannot really check).
>> The issue is that a service that asks for the preimage first becomes
>> custodian. From a legal perspective, it does not matter whether they open
>> the channel immediately after receiving the preimage, the ordering of
>> events makes their service custodian. In Europe, such a service will fall
>> within the European MICA regulation. Competitors who refuse to offer
>> custodian services, such as Electrum, are excluded from that game.
>>>>
>>>> In order to solve that, it would be beneficial to bundle the prepayment
>> and the main payment in the same BOLT-11 invoice.
>>>>
>>>> The semantics of bundled payments is as follows:
>>>> - 1. the BOLT-11 invoice contains two preimages and two amounts:
>> prepayment and main payment.
>>>> - 2. the receiver should wait until all the HTLCs of both payments
>> have arrived, before they fulfill the HTLCs of the pre-payment. If the main
>> payment does not arrive, they should fail the pre-payment with a MPP
>> timeout.
>>>> - 3. once the HTLCs of both payments have arrived, the receiver
>> fulfills the HTLCs of the prepayment, and they broadcast their on-chain
>> transaction. Note that the main payment can still fail if the sender never
>> reveal the preimage of the main payment.
>>>>
>>>> Of course, nothing in my proposal prevents the service provider from
>> stealing the pre-payment, but that is already the case today.
>>>>
>>>> I believe this proposal would level the field in terms of competition
>> between lightning service providers. Currently, you need to use a dedicated
>> client in order to use Loop, and competitors who do not have an established
>> user base running a dedicated client are exposed to the mining fee attack.
>> I also believe that ACINQ would benefit from this, because it would make it
>> possible for them to make their pay-to-open service fully non-custodian. My
>> understanding is that in its current form, the 'pay-to-open' service used
>> by Phoenix will fall into the scope of the European MICA regulation, which
>> they should consider as a serious issue.
>>>>
>>>> Finally, I believe that such a change should be implemented in BOLT-11,
>> and not using BOLT-12 or onion messages. Indeed, my proposal does not
>> require the exchange of new messages. Some of the initial feedback I
>> received was that this is a use case for BOLT-12 or OM, but I think that
>> this is making things unnecessarily complicated. We should not add new
>> messages when things can be done in a non-interactive way.
>>>>
>>>> Cheers,
>>>> ThomasV
>>>> _______________________________________________
>>>> Lightning-dev mailing list
>>>> Lightning-dev at lists.linuxfoundation.org
>>>> https://lists.linuxfoundation.org/mailman/listinfo/lightning-dev
>>
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>> Sitz, Registergericht: Berlin, Amtsgericht Charlottenburg, HRB 164636
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>>
>

--
Electrum Technologies GmbH / Paul-Lincke-Ufer 8d / 10999 Berlin / Germany
Sitz, Registergericht: Berlin, Amtsgericht Charlottenburg, HRB 164636
Geschäftsführer: Thomas Voegtlin