A Decker-Wattenhofer MultiChannel For Reduced Inter-LSP Trust

The discourse explores an innovative construction aimed at reducing censorship and funds loss risk associated with Lightning Service Providers (LSPs) in a decentralized blockchain system. The proposed method diverges from the traditional Poon-Dryja-based MultiChannel construction, which poses a significant funds loss risk for LSPs. This conventional setup often leads to a scenario where a single corporation controls multiple LSPs, thereby increasing the potential for censorship, especially if that entity faces external pressures.

In contrast, the newly suggested framework introduces a dual-chain mechanism that allows for separate but simultaneous transactions chains for Ursula (a participant) and the LSPs, named the Ursula-side chain and the LSPs-side chain, respectively. Initially, both chains start with funding followed by a kickoff transaction. However, to mitigate unilateral exit risks and enhance cooperative exits, several security measures are implemented. For instance, the Ursula kickoff requires n-of-n signatures from Ursula and all participating LSPs, Alice, Bob, and Carol, signifying unanimous consent for proceeding with the transaction. This approach ensures no single party can unilaterally exit the MultiChannel without consensus, thus aiming to reduce the likelihood of fund losses for LSPs and censorship risks for users like Ursula.

Moreover, the structure integrates two sets of signatures for the LSP-side kickoff: a funds safety set and a unilateral exit set. The funds safety set demands n-of-n signatures from Ursula and the LSPs for the initial transaction, while the unilateral exit set requires k-of-n signatures from the LSPs for subsequent transactions. This bifurcation further solidifies the system's robustness against unilateral decisions, fostering a more democratic and secure environment for all parties involved.

Additionally, the implementation of Spilman complexes within this framework highlights the evolution of blockchain transaction protocols. It leverages OP_CHECKLOCKTIMEVERIFY and OP_CHECKSEQUENCEVERIFY, which eliminates the need for pre-signed transactions, showcasing the technological advancements in ensuring transactional security and flexibility. This nostalgia for adding opcodes reflects on the continuous innovation within the blockchain community, despite the regulatory and technical challenges it faces.

Overall, the proposed method represents a significant step forward in addressing the inherent risks of censorship and fund loss within decentralized blockchain networks. By requiring collective agreement for transactions and integrating advanced security mechanisms, it aims to create a more equitable and resilient ecosystem for participants like Ursula and LSPs.