LNPBP-51: Bifrost channels

LNPBP: 0051
Vertical: Lightning network protocol
Title: Bifrost: channel management protocol
Author: Dr Maxim Orlovsky <[e-mail]>
Comments-URI: https://github.com/LNP-BP/lnpbps/pulls/97
Status: Draft
Type: Standards Track
Created: 2021-11-01
Finalized: not yet
License: CC0-1.0

• Abstract

• Background

• Motivation

• Design

• Specification

  • Bifrost transaction requirements

  • Channel coordination

    • Channel workflows

• Channel creation workflow

• Compatibility

• Rationale

• Reference implementation

• Acknowledgements

• References

• Copyright

• Test vectors

Abstract

Background

Motivation

Design

Specification

Bifrost transaction requirements

Bifrost requires all off-chain transactions always be of version 2. Transaction outputs which are internal to the channel (i.e. spend by other offchain transactions participating in channel) MUST use v1 witness P2TR outputs (or later witness versions). The scripts in taproot key path spends MUST be miniscript-compatible.

For on-chain funding transactions and funding outputs of channel level 1 this requirement is released to witness v0 or above. The reason for lower requirement is the interoperability with the legacy lightning network, allowing migration of existing channels opened in legacy network to Bifrost.

There is no specific requirements for outputs which are not internal for the channel.

Channel coordination

For channel operations we assume that any channel may be a multi-peer channel. Thus, for channel updates it is required that all parties cooperate and sign the latest version of updated channel transactions. This is achieved by introducing concept of channel coordinator. Channel coordinator is the lightning node that has originally proposed channel. It is responsible for orchestrating message flow between all nodes which are the parts of the channel and keeping them up-to-date. Also, the channel coordinator is the only party required to have direct connections with other channel participants – and each of channel participants is required to be connected at least to the channel coordinator.

If a multiple nested channels are present, for all higher-level channels channel coordinator MUST be the same as channel coordinator for the base (level 1) channel; the list of participants for the nested channels MUST be a subset of the participants of the topmost level 1 channel.

Channel workflows

There are following workflows affecting channel status / existence. Each of these workflows represent a set of P2P messages exchanged by channel peers.

• Channel creation

• Moving channel from legacy to Bifrost LN

• Removing channel from Bifrost to legacy LN

• Changing channel status (pausing etc)

• Upgrading channel to support more protocols

• Downgrading channel by removing specific protocol

• Cooperatively closing channel

Workflow can be initiated only by a channel coordinator, and specific P2P messages inside the workflow can be sent either from the channel coordinator to a peer – or, in response, from a peer to the channel coordinator.

Normal channel operations are covered by application-specific business logic and messages and are not part of any listed channel workflow. Unlike workflows, they may be initiated by any of the channel peers sending message to the channel coordinator, however whenever they involve other peers or external channels, after being initiated they must be coordinated by the channel coordinator.

Channel creation workflow

Considering generic case of multi-peer channel setup channel creation workflow is organized with the following algorithm:

1. First, all parties agree on the structure of the funding transaction and overall transaction graph within the channel – simultaneously signing refund transaction (which, upon channel creation, will become first version of the channel commitment transaction). This is done using ProposeChannel requests sent by the channel coordinator to each of the peers, replying with either AcceptChannel (containing updated transaction graph with signed refund transaction) or Error. peers must wait for CHANNEL_CREATION_TIMEOUT period and discard all provisional channel data from their memory.

2. Once the refund transaction is fully signed – implying that the transaction graph if agreed between participants – channel coordinator starts next phase, where the funding transaction gets fully signed. Coordinator sends FinalizeChannel message to each of the peers and collects signatures, publishing the final transaction either to bitcoin blockchain (for level 1 channels) or updating the state of the top-level channel (for nested channels above level 1). Peers track upper level channel or blockchain to detect funding transaction, and upon transaction mining starts operate channel in active mode, not requiring any other messages from the channel coordinator (NB: this differs from the legacy LN channel creation workflow).

3. Replacing funding by fee (RBF): channel coordinator SHOULD initiate RBF subworkflow for level 1 channels if the funding transaction was not mined after reasonable amount of time, which should be less than ChannelParams::funding_timeout. With RGB subworkflow coordinator updates funding transaction – and propagates it with FinalizeChannel request, collecting new signatures (peers MUST reset their funding timeout counters).

4. Cancelling channel creation: if any of the peer nodes replied with Error on any of the channel construction requests within the channel creation workflow – or if the coordinator detected incorrect reply, channel coordinator MUST abandon channel creation – and MUST forward Error message to all other peers. A peer posting Error MUST provide a valid error code and a message explaining the cause of the error. The coordinator SHOULD also send Error message to peers if any of the stages of transaction construction workflow has stuck without a reply from a peer for over ChannelParams::peer_timeout time.

5. Timeouts: the coordinator SHOULD send Error message to peers if any of the peers at any stage of transaction construction workflow has stuck without a reply for over ChannelParams::peer_timeout time. The peers should abandon channel and clear all information about it from the memory regardless whether they have received Error message from the coordinator after ChannelParams::peer_timeout`` * 2 time before ChannelFinalized – and if they has not received new FinalizeChannel request from the coordinator after ChannelParams::funding_timeout time (see pt 3 for RBF subworkflow).

Channel coordinator                   Peer 1             Peer 2
        |                               |                  |
(enters ChannelProposed state)          |                  |
        |                               |                  |
        | --(1)- ProposeChannel ------> |                  |
        |                               |                  |
        | --(1)------------ ProposeChannel --------------> |
        |                               |                  |
        |                           (enter ChannelProposed state)
        |                               |                  |
        | <-(2)------------- AcceptChannel --------------- |
        |                               |                  |
        | <-(2)-- AcceptChannel ------- |                  |
        |                               |                  |
 (enters ChannelAccepted state)     (enter ChannelAccepted state)
        |                               |                  |
        | --(3)- FinalizeChannel -----> |                  |
        |                               |                  |
        | --(3)------------ FinalizeChannel -------------> |
        |                               |                  |
        | <-(4)-- FinalizeChannel ----- |                  |
        |                               |                  |
        | <-(4)------------- FinalizeChannel ------------- |
        |                               |                  |
 (enters ChannelFinalized state)    (enter ChannelFinalized state)
        |                               |                  |
(await funding transaction mining or entering the valid super-channel state)
        |                               |                  |
 (enters ChannelActive state)       (enter ChannelActive state)
        |                               |                  |

During channel construction workflow channels are identified by ChannelId, which is constructed as a tagged SHA-256 hash (using bifrost:channel-proposal as tag) of the strict-serialized ChannelParams data and coordinator node public key.

Compatibility

Rationale

Reference implementation

Acknowledgements

References

Copyright

This document is licensed under the Creative Commons CC0 1.0 Universal license.

Test vectors