The defender implements a scorched-earth fee bumping policy, which means that either the HTLC-timeout will confirm in the next block or the attacker must pay more fees than the HTLC-timeout fees to replace it. As the CLTV delta deadline approaches, the fees in the second case can be as high as 50%, 80%, or even 100% of the HTLC value under such a scorched earth policy. This makes the attack unprofitable, even if the attacker only has to do one replacement cycle right before the deadline. In practice, with HTLC values significantly greater than the next-block fee cost, the attacker will need to do multiple replacements as the deadline approaches.

The email emphasizes the importance of tuning the fee bumping curve across the full CLTV delta to ensure minimal fees are paid when not under attack. However, as the deadline approaches, it is necessary to become very aggressive both to get the transaction confirmed during high mempool congestion and to punish replacement-cycling attackers. The linear scorched earth policy mentioned in the email is just an illustration, and further adjustments should be made to optimize the fee bumping curve.

In summary, the email highlights the effectiveness of a scorched-earth fee bumping policy in deterring attackers from carrying out replacement cycles to reduce the cost of an attack. By implementing this policy, the defender forces the attacker to pay higher fees than the original transaction, making the attack financially unviable. However, it is important to fine-tune the fee bumping curve to minimize fees when not under attack and to be more aggressive as the deadline approaches to ensure transaction confirmation and discourage replacement-cycling attackers.