Hi Bastien, Thanks for the answer. If I understand correctly the protocol you're describing you're aiming to enable batched withdrawals where a list of users are being sent funds from an exchange directly in a list of channel funding outputs ("splice-out"). Those channels funding outputs are 2-of-2, between two lambda users or e.g a lambda user and a LSP. If I'm correct, two users can cooperate maliciously against the batch withdrawal transactions by re-signing a CPFP from 2-of-2 and broadcasting the batch withdrawal as a higher-feerate package / high fee package and then evicting out the CPFP. If the batch withdrawal has been signed with 0-fee thanks to the nversion=3 policy exemption, it will be evicted out of the mempool. A variant of a replacement cycling attack. I think this more or less matches the test I'm pointing to you which is on non-deployed package acceptance code: https://github.com/ariard/bitcoin/commit/19d61fa8cf22a5050b51c4005603f43d72f1efcf Please correct me if I'm wrong or missing assumptions. Agree with you on the assumptions that the exchange does not have an incentive to double-spend its own withdrawal transactions, or if all the batched funding outputs are shared with a LSP, malicious collusion is less plausible. Best, Antoine Le mer. 18 oct. 2023 à 15:35, Bastien TEINTURIER a écrit : > Hey Z-man, Antoine, > > Thank you for your feedback, responses inline. > > z-man: > > > Then if I participate in a batched splice, I can disrupt the batched > > splice by broadcasting the old state and somehow convincing miners to > > confirm it before the batched splice. > > Correct, I didn't mention it in my post but batched splices cannot use > 0-conf, the transaction must be confirmed to remove the risk of double > spends using commit txs associated with the previous funding tx. > > But interestingly, with the protocol I drafted, the LSP can finalize and > broadcast the batched splice transaction while users are offline. With a > bit of luck, when the users reconnect, that transaction will already be > confirmed so it will "feel 0-conf". > > Also, we need a mechanism like the one you describe when we detect that > a splice transaction has been double-spent. But this isn't specific to > batched transactions, 2-party splice transactions can also be double > spent by either participant. So we need that mechanism anyway? The spec > doesn't have a way of aborting a splice after exchanging signatures, but > you can always do it as an RBF operation (which actually just does a > completely different splice). This is what Greg mentioned in his answer. > > > part of the splice proposal is that while a channel is being spliced, > > it should not be spliced again, which your proposal seems to violate. > > The spec doesn't require that, I'm not sure what made you think that. > While a channel is being spliced, it can definitely be spliced again as > an RBF attempt (this is actually a very important feature), which double > spends the other unconfirmed splice attempts. > > ariard: > > > It is uncertain to me if secure fee-bumping, even with future > > mechanisms like package relay and nversion=3, is robust enough for > > multi-party transactions and covenant-enable constructions under usual > > risk models. > > I'm not entirely sure why you're bringing this up in this context... > I agree that we most likely cannot use RBF on those batched transactions > we will need to rely on CPFP and potentially package relay. But why is > it different from non-multi-party transactions here? > > > See test here: > > > https://github.com/ariard/bitcoin/commit/19d61fa8cf22a5050b51c4005603f43d72f1efcf > > I'd argue that this is quite different from the standard replacement > cycling attack, because in this protocol wallet users can only > unilaterally double-spend with a commit tx, on which they cannot set > the feerate. The only participant that can "easily" double-spend is > the exchange, and they wouldn't have an incentive to here, users are > only withdrawing funds, there's no opportunity of stealing funds? > > Thanks, > Bastien > > Le mar. 17 oct. 2023 à 21:10, Antoine Riard a > écrit : > >> Hi Bastien, >> >> > The naive way of enabling lightning withdrawals is to make the user >> > provide a lightning invoice that the exchange pays over lightning. The >> > issue is that in most cases, this simply shifts the burden of making an >> > on-chain transaction to the user's wallet provider: if the user doesn't >> > have enough inbound liquidity (which is likely), a splice transaction >> > will be necessary. If N users withdraw funds from an exchange, we most >> > likely will end up with N separate splice transactions. >> >> It is uncertain to me if secure fee-bumping, even with future mechanisms >> like package relay and nversion=3, is robust enough for multi-party >> transactions and covenant-enable constructions under usual risk models. >> >> See test here: >> >> https://github.com/ariard/bitcoin/commit/19d61fa8cf22a5050b51c4005603f43d72f1efcf >> >> Appreciated expert eyes of folks understanding both lightning and core >> mempool on this. >> There was a lot of back and forth on nversion=3 design rules, though the >> test is normally built on glozow top commit of the 3 Oct 2023. >> >> Best, >> Antoine >> >> Le mar. 17 oct. 2023 à 14:03, Bastien TEINTURIER a >> écrit : >> >>> Good morning list, >>> >>> I've been trying to design a protocol to let users withdraw funds from >>> exchanges directly into their lightning wallet in an efficient way >>> (with the smallest on-chain footprint possible). >>> >>> I've come to the conclusion that this is only possible with some form of >>> covenants (e.g. `SIGHASH_ANYPREVOUT` would work fine in this case). The >>> goal of this post is to explain why, and add this usecase to the list of >>> useful things we could do if we had covenants (insert "wen APO?" meme). >>> >>> The naive way of enabling lightning withdrawals is to make the user >>> provide a lightning invoice that the exchange pays over lightning. The >>> issue is that in most cases, this simply shifts the burden of making an >>> on-chain transaction to the user's wallet provider: if the user doesn't >>> have enough inbound liquidity (which is likely), a splice transaction >>> will be necessary. If N users withdraw funds from an exchange, we most >>> likely will end up with N separate splice transactions. >>> >>> Hence the idea of batching those into a single transaction. Since we >>> don't want to introduce any intermediate transaction, we must be able >>> to create one transaction that splices multiple channels at once. The >>> issue is that for each of these channels, we need a signature from the >>> corresponding wallet user, because we're spending the current funding >>> output, which is a 2-of-2 multisig between the wallet user and the >>> wallet provider. So we run into the usual availability problem: we need >>> signatures from N users who may not be online at the same time, and if >>> one of those users never comes online or doesn't complete the protocol, >>> we must discard the whole batch. >>> >>> There is a workaround though: each wallet user can provide a signature >>> using `SIGHASH_SINGLE | SIGHASH_ANYONECANPAY` that spends their current >>> funding output to create a new funding output with the expected amount. >>> This lets users sign *before* knowing the final transaction, which the >>> exchange can create by batching pairs of inputs/outputs. But this has >>> a fatal issue: at that point the wallet user has no way of spending the >>> new funding output (since it is also a 2-of-2 between the wallet user >>> and the wallet provider). The wallet provider can now blackmail the user >>> and force them to pay to get their funds back. >>> >>> Lightning normally fixes this by exchanging signatures for a commitment >>> transaction that sends the funds back to their owners *before* signing >>> the parent funding/splice transaction. But here that is impossible, >>> because we don't know yet the `txid` of the batch transaction (that's >>> the whole point, we want to be able to sign before creating the batch) >>> so we don't know the new `prevout` we should spend from. I couldn't find >>> a clever way to work around that, and I don't think there is one (but >>> I would be happy to be wrong). >>> >>> With `SIGHASH_ANYPREVOUT`, this is immediately fixed: we can exchange >>> anyprevout signatures for the commitment transaction, and they will be >>> valid to spend from the batch transaction. We are safe from signature >>> reuse, because funding keys are rotated at each splice so we will never >>> create another output that uses the same 2-of-2 script. >>> >>> I haven't looked at other forms of covenants, but most of them likely >>> address this problem as well. >>> >>> Cheers, >>> Bastien >>> _______________________________________________ >>> Lightning-dev mailing list >>> Lightning-dev@lists.linuxfoundation.org >>> https://lists.linuxfoundation.org/mailman/listinfo/lightning-dev >>> >>