CheckTemplateVerify Does Not Scale Due to UTXO's Required For Fee Payment

CheckTemplateVerify Does Not Scale Due to UTXO's Required For Fee Payment

Original Postby ZmnSCPxj

Posted on: January 30, 2024 05:17 UTC

In a recent analysis of the Decker-Russell-Osuntokun (DRS) protocol, a key point regarding transaction malleability and fee payments was brought to light.

It has been clarified that the SIGHASH_NOINPUT signature scheme is employed within this protocol. This particular scheme means that the nSequence parameter is not included in the transaction's signature, which presents an opportunity for its alteration or malleation by external entities.

Further examination reveals that for update transactions to have the ability to replace previous ones effectively, the output amount must match the input amount exactly. This requirement ensures there can be no deduction of fees directly from the channel funds during the update transaction process. Consequently, the responsibility of covering transaction fees falls upon the party constructing the update transaction. To address this, the party initiating the closing must bring in an additional Unspent Transaction Output (UTXO), which they own, to cover the transaction costs.

This information underscores the intricacies involved in managing transaction fees and maintaining channel integrity within the DRS protocol, highlighting a crucial aspect of its design that may affect transaction construction and channel operations.