This attack exploits the transaction selection, announcement, and propagation mechanisms inherent in the base-layer full nodes of the Bitcoin network. Initially, concerns regarding similar vulnerabilities, specifically bip125 replace-by-fee rules, were raised among bitcoin protocol developers back in 2020. However, the focus shifted due to more pressing security issues within the lightning protocol at that time.

In mid-2023, detailed concerns about "transaction-relay throughput attacks" were communicated privately to seasoned bitcoin and lightning developers. These discussions highlighted the technical feasibility and potential impact of such attacks, though they were not prioritized until recent developments in 2024 brought them back into consideration. The attack manipulates full-node bandwidth through what's termed as free relay attacks, drawing attention to the practical implications and costs associated with executing such attacks on the network.

Two specific variations of the attack are outlined: the "high overflow" and the "low overflow" variants. The "high overflow" attack focuses on congesting the transaction relay process by flooding the network with high fee-rate transactions to prevent time-sensitive transactions from being propagated efficiently. A proof-of-concept for this attack was tested on bitcoin core v27.0, demonstrating its viability under certain topological configurations but without real-world workloads. The "low overflow" attack, meanwhile, aims at overwhelming the receiver's capability to process incoming transactions by reaching the MAX_PEER_TX_ANNOUNCEMENTS limit, causing subsequent transactions to be dropped. This variant's practical testing and confirmation remain an open area for investigation.

The report further discusses the estimated costs associated with launching a "high overflow" attack, emphasizing its significant financial requirement but noting its potential effectiveness in partitioning a victim's mempool from the broader network. This aspect highlights the strategic approach an attacker might use to minimize on-chain fees while maximizing disruption.

Mitigation strategies are proposed, focusing primarily on measures that can be implemented by lightning node operators and off-chain protocol developers. Recommendations include random transaction rebroadcasting, dynamic fee rebroadcasting, limiting identical finality time-sensitive transactions, and over-provisioning transaction-relay throughput with adjacent full-nodes. These strategies aim to enhance resilience against both presented attack variants, although the report suggests that a comprehensive solution may require intervention at the base-layer level.

The timeline of the report's formulation and disclosure process is meticulously documented, from initial findings and discussions in June 2023 to the communication of a public disclosure date in November 2024. This timeline underscores the careful consideration and coordination among stakeholders in addressing the vulnerability.

In conclusion, the report introduces a plausible threat vector against lightning channel funds through transaction-relay jamming attacks, warranting further investigation and experimentation. It presents a baseline for understanding the technical underpinnings and potential defenses against such attacks, contributing to the ongoing dialogue around securing decentralized financial networks against sophisticated adversarial tactics.