[Proposal] Public Fraud Proofs for Just-in-Time Channels

The primary mechanism suggested involves clients publishing the payment preimage on-chain should there be any misconduct by their Lightning Service Providers (LSP). This method aims at enhancing transparency and accountability within these transactions. Detailed documentation and further elaborations on this proposal can be accessed through this link.

The recommendation made in the paper includes utilizing Electrum servers for serving op_return data. However, an alternative could involve delegating the indexing and serving tasks to nostr relays, potentially simplifying the process. The proposal has undergone preliminary reviews, contributing to its refinement.

Feedback on the scheme points out a potential exploit termed as a griefing vector. This issue arises from the possibility of Alice maliciously stalling the channel open after acquiring the necessary information to publish a fraud proof but before completing her part of the transaction, thus jeopardizing Bob's reputation. A remedial suggestion involves rearranging the sequence of actions, particularly ensuring that the UTXO commitment is only sent after Alice sends funding_signed but prior to Bob broadcasting the funding transaction. Following this feedback, revisions have been made to the proposal to mitigate the identified risks, and an updated version of the document has been uploaded. Historical versions of the document remain accessible via the revision history at the provided gist link.