Batch exchange withdrawal to lightning requires covenants

In the email, Bastien is responding to Dave's suggestion and discussing a solution for minimizing on-chain transaction bytes. Bastien's goal is to design something with the smallest on-chain footprint possible. He proposes an alternative approach that avoids settlement transactions and produces only one transaction.

With Dave's example participants, Bastien's proposal would result in a single splice transaction with 4 inputs and 3 outputs. The inputs include E's funding input, {A,D}'s current channel input, {B,E}'s current channel input, and {C,F}'s current channel input. The outputs consist of {A,D}'s new channel output, {B,E}'s new channel output, and {C,F}'s new channel output.

The number of inputs and outputs remains the same, but the advantage of Bastien's approach is that common transaction fields are only paid for once instead of N times, where N represents the size of the batch. This could potentially be significant in larger batches and in a high-fee future.

In summary, Bastien suggests a solution that eliminates settlement transactions and reduces the on-chain footprint by consolidating the transaction into a single splice transaction. This approach offers potential advantages, particularly in scenarios involving larger batches and high fees.