BOLT #5: Recommendations for On-chain Transaction Handling

Abstract

Lightning allows for two parties (a local node and a remote node) to conduct transactions off-chain by giving each of the parties a cross-signed commitment transaction, which describes the current state of the channel (basically, the current balance). This commitment transaction is updated every time a new payment is made and is spendable at all times.

There are three ways a channel can end:

1. The good way (mutual close): at some point the local and remote nodes agree to close the channel. They generate a closing transaction (which is similar to a commitment transaction, but without any pending payments) and publish it on the blockchain (see BOLT #2: Channel Close).
2. The bad way (unilateral close): something goes wrong, possibly without evil intent on either side. Perhaps one party crashed, for instance. One side publishes its latest commitment transaction.
3. The ugly way (revoked transaction close): one of the parties deliberately tries to cheat, by publishing an outdated commitment transaction (presumably, a prior version, which is more in its favor).

Because Lightning is designed to be trustless, there is no risk of loss of funds in any of these three cases; provided that the situation is properly handled. The goal of this document is to explain exactly how a node should react when it encounters any of the above situations, on-chain.

Table of Contents

• General Nomenclature
• Commitment Transaction
• Failing a Channel
• Mutual Close Handling
• Unilateral Close Handling: Local Commitment Transaction
  • HTLC Output Handling: Local Commitment, Local Offers
  • HTLC Output Handling: Local Commitment, Remote Offers
• Unilateral Close Handling: Remote Commitment Transaction
  • HTLC Output Handling: Remote Commitment, Local Offers
  • HTLC Output Handling: Remote Commitment, Remote Offers
• Revoked Transaction Close Handling
  • Penalty Transactions Weight Calculation
• Generation of HTLC Transactions
• General Requirements
  • Limitations of v3 transactions
• Appendix A: Expected Weights
  • Expected Weight of the to_local Penalty Transaction Witness
  • Expected Weight of the offered_htlc Penalty Transaction Witness
  • Expected Weight of the accepted_htlc Penalty Transaction Witness
• Authors

General Nomenclature

Any unspent output is considered to be unresolved and can be resolved as detailed in this document. Usually this is accomplished by spending it with another resolving transaction. Although, sometimes simply noting the output for later wallet spending is sufficient, in which case the transaction containing the output is considered to be its own resolving transaction.

Outputs that are resolved are considered irrevocably resolved once the remote’s resolving transaction is included in a block at least 100 deep, on the most-work blockchain. 100 blocks is far greater than the longest known Bitcoin fork and is the same wait time used for confirmations of miners’ rewards (see Reference Implementation).

Requirements

A node: - once it has broadcast a funding transaction OR sent a commitment signature for a commitment transaction that contains an HTLC output: - until all outputs are irrevocably resolved: - MUST monitor the blockchain for transactions that spend any output that is NOT irrevocably resolved. - MUST resolve all outputs, as specified below. - MUST be prepared to resolve outputs multiple times, in case of blockchain reorganizations. - upon the funding transaction being spent, if the channel is NOT already closed: - MAY send a descriptive error. - SHOULD fail the channel. - SHOULD ignore invalid transactions.

Rationale

Once a local node has some funds at stake, monitoring the blockchain is required to ensure the remote node does not close unilaterally.

Invalid transactions (e.g. bad signatures) can be generated by anyone, (and will be ignored by the blockchain anyway), so they should not trigger any action.

Commitment Transaction

The local and remote nodes each hold a commitment transaction. Each of these commitment transactions has up to seven types of outputs:

1. local node’s main output: Zero or one output, to pay to the local node’s delayed_pubkey.
2. remote node’s main output: Zero or one output, to pay to the remote node’s delayed_pubkey.
3. local node’s anchor output: one output paying to the local node’s funding_pubkey.
4. remote node’s anchor output: one output paying to the remote node’s funding_pubkey.
5. shared anchor: one output spendable by anyone (pay-to-anchor).
6. local node’s offered HTLCs: Zero or more pending payments (HTLCs), to pay the remote node in return for a payment preimage.
7. remote node’s offered HTLCs: Zero or more pending payments (HTLCs), to pay the local node in return for a payment preimage.

To incentivize the local and remote nodes to cooperate, an OP_CHECKSEQUENCEVERIFY relative timeout encumbers the local node’s outputs (in the local node’s commitment transaction) and the remote node’s outputs (in the remote node’s commitment transaction). So for example, if the local node publishes its commitment transaction, it will have to wait to claim its own funds, whereas the remote node will have immediate access to its own funds. As a consequence, the two commitment transactions are not identical, but they are (usually) symmetrical.

See BOLT #3: Commitment Transaction for more details.

Failing a Channel

Although closing a channel can be accomplished in several ways, the most efficient is preferred.

Various error cases involve closing a channel. The requirements for sending error messages to peers are specified in BOLT #1: The error Message.

Requirements

A node: - if a local commitment transaction has NOT ever contained a to_local or HTLC output: - MAY simply forget the channel. - otherwise: - if the current commitment transaction does NOT contain to_local or other HTLC outputs: - MAY simply wait for the remote node to close the channel. - until the remote node closes: - MUST NOT forget the channel. - otherwise: - if it has received a valid closing_signed message that includes a sufficient fee: - SHOULD use this fee to perform a mutual close. - otherwise: - if the node knows or assumes its channel state is outdated: - MUST NOT broadcast its last commitment transaction. - otherwise: - MUST broadcast the last commitment transaction, for which it has a signature, to perform a unilateral close. - MUST spend any to_local_anchor or shared_anchor output, providing sufficient fees as incentive to include the commitment transaction in a block. For to_local_anchor, special care must be taken when spending to a third-party, because this re-introduces the pinning vulnerability that was addressed by adding the CSV delay to the non-anchor outputs. - SHOULD use replace-by-fee or other mechanism on the spending transaction if it proves insufficient for timely inclusion in a block.

Rationale

Since dust_limit_satoshis is supposed to prevent creation of uneconomic outputs (which would otherwise remain forever, unspent on the blockchain), all commitment transaction outputs MUST be spent.

In the early stages of a channel, it’s common for one side to have little or no funds in the channel; in this case, having nothing at stake, a node need not consume resources monitoring the channel state.

There exists a bias towards preferring mutual closes over unilateral closes, because outputs of the former are unencumbered by a delay and are directly spendable by wallets. In addition, mutual close fees tend to be less exaggerated than those of commitment transactions (or in the case of commitments using anchor outputs, the commitment transaction may require a child transaction to cause it to be mined). So, the only reason not to use the mutual close transaction would be if the fee offered was too small for it to be processed.

Mutual Close Handling

A closing transaction resolves the funding transaction output.

In the case of a mutual close, a node need not do anything else, as it has already agreed to the output, which is sent to its specified scriptpubkey (see BOLT #2: Closing initiation: shutdown).

Unilateral Close Handling: Local Commitment Transaction

This is the first of two cases involving unilateral closes. In this case, a node discovers its local commitment transaction, which resolves the funding transaction output.

However, a node cannot claim funds from the outputs of a unilateral close that it initiated, until the OP_CHECKSEQUENCEVERIFY delay has passed (as specified by the remote node’s to_self_delay field). Where relevant, this situation is noted below.

Requirements

A node: - upon discovering its local commitment transaction: - SHOULD spend the to_local output to a convenient address. - MUST wait until the OP_CHECKSEQUENCEVERIFY delay has passed (as specified by the remote node’s to_self_delay field) before spending the output. - Note: if the output is spent (as recommended), the output is resolved by the spending transaction, otherwise it is considered resolved by the commitment transaction itself. - MAY ignore the to_remote output. - Note: No action is required by the local node, as to_remote is considered resolved by the commitment transaction itself. - MUST handle HTLCs offered by itself as specified in HTLC Output Handling: Local Commitment, Local Offers. - MUST handle HTLCs offered by the remote node as specified in HTLC Output Handling: Local Commitment, Remote Offers.

Rationale

Spending the to_local output avoids having to remember the complicated witness script, associated with that particular channel, for later spending.

The to_remote output is entirely the business of the remote node, and can be ignored.

HTLC Output Handling: Local Commitment, Local Offers

Each HTLC output can only be spent by either the local offerer, by using the HTLC-timeout transaction after it’s timed out, or the remote recipient, if it has the payment preimage.

There can be HTLCs which are not represented by any outputs: either because they were trimmed as dust, or because the transaction has only been partially committed.

The HTLC output has timed out once the height of the latest block is equal to or greater than the HTLC cltv_expiry.

Requirements

A node: - if the commitment transaction HTLC output is spent using the payment preimage, the output is considered irrevocably resolved: - MUST extract the payment preimage from the transaction input witness. - if the commitment transaction HTLC output has timed out and hasn’t been resolved: - MUST resolve the output by spending it using the HTLC-timeout transaction. - once the resolving transaction has reached reasonable depth: - MUST fail the corresponding incoming HTLC (if any). - MUST resolve the output of that HTLC-timeout transaction. - SHOULD resolve the HTLC-timeout transaction by spending it to a convenient address. - Note: if the output is spent (as recommended), the output is resolved by the spending transaction, otherwise it is considered resolved by the HTLC-timeout transaction itself. - MUST wait until the OP_CHECKSEQUENCEVERIFY delay has passed (as specified by the remote node’s open_channel to_self_delay field) before spending that HTLC-timeout output. - for any committed HTLC that does NOT have an output in this commitment transaction: - if the payment preimage is known: - MUST fulfill the corresponding incoming HTLC (if any). - otherwise: - once the commitment transaction has reached reasonable depth: - MUST fail the corresponding incoming HTLC (if any). - if no valid commitment transaction contains an output corresponding to the HTLC: - MAY fail the corresponding incoming HTLC sooner.

Rationale

The payment preimage either serves to prove payment (when the offering node originated the payment) or to redeem the corresponding incoming HTLC from another peer (when the offering node is forwarding the payment). Once a node has extracted the payment, it no longer cares about the fate of the HTLC-spending transaction itself.

In cases where both resolutions are possible (e.g. when a node receives payment success after timeout), either interpretation is acceptable; it is the responsibility of the recipient to spend it before this occurs.

The local HTLC-timeout transaction needs to be used to time out the HTLC (to prevent the remote node fulfilling it and claiming the funds) before the local node can back-fail any corresponding incoming HTLC, using update_fail_htlc (presumably with reason permanent_channel_failure), as detailed in BOLT #2. If the incoming HTLC is also on-chain, a node must simply wait for it to timeout: there is no way to signal early failure.

There are several reasons a committed HTLC may not have an output in the confirmed commitment transaction: the HTLC may be smaller than dust_limit_satoshis, the HTLC may not have been added to the commitment transaction yet, or the HTLC may have already been failed or fulfilled. In any case, if the payment preimage is known for the HTLC, the upstream HTLC needs to be fulfilled to avoid loss of funds.

If the payment preimage is not known for the missing HTLC, the correct action depends on the possibility of a blockchain reorganization that swaps out the confirmed commitment transaction for one with the HTLC present. If the HTLC is too small to appear in any commitment transaction, such a reorganization is not possible, and the HTLC can be safely failed immediately. Otherwise, a reorganization delay is required before failing the incoming HTLC. The requirement that the incoming HTLC be failed before its own timeout still applies as an upper bound.

HTLC Output Handling: Local Commitment, Remote Offers

Each HTLC output can only be spent by the recipient, using the HTLC-success transaction, which it can only populate if it has the payment preimage. If it doesn’t have the preimage (and doesn’t discover it), it’s the offerer’s responsibility to spend the HTLC output once it’s timed out.

There are several possible cases for an offered HTLC:

1. The offerer is NOT irrevocably committed to it. The recipient will usually not know the preimage, since it will not forward HTLCs until they’re fully committed. So using the preimage would reveal that this recipient is the final hop; thus, in this case, it’s best to allow the HTLC to time out.
2. The offerer is irrevocably committed to the offered HTLC, but the recipient has not yet committed to an outgoing HTLC. In this case, the recipient can either forward or timeout the offered HTLC.
3. The recipient has committed to an outgoing HTLC, in exchange for the offered HTLC. In this case, the recipient must use the preimage, once it receives it from the outgoing HTLC; otherwise, it will lose funds by sending an outgoing payment without redeeming the incoming payment.

Requirements

A local node: - if it receives (or already possesses) a payment preimage for an unresolved HTLC output that it has been offered AND for which it has committed to an outgoing HTLC: - MUST resolve the output by spending it, using the HTLC-success transaction. - MUST NOT reveal its own preimage when it’s not the final recipient.^{Preimage-Extraction} - MUST resolve the output of that HTLC-success transaction. - otherwise: - if the remote node is NOT irrevocably committed to the HTLC: - MUST NOT resolve the output by spending it. - SHOULD resolve that HTLC-success transaction output by spending it to a convenient address. - MUST wait until the OP_CHECKSEQUENCEVERIFY delay has passed (as specified by the remote node’s open_channel’s to_self_delay field), before spending that HTLC-success transaction output.

If the output is spent (as is recommended), the output is resolved by the spending transaction, otherwise it’s considered resolved by the HTLC-success transaction itself.

If it’s NOT otherwise resolved, once the HTLC output has expired, it is considered irrevocably resolved.

Unilateral Close Handling: Remote Commitment Transaction

The remote node’s commitment transaction resolves the funding transaction output.

There are no delays constraining node behavior in this case, so it’s simpler for a node to handle than the case in which it discovers its local commitment transaction (see Unilateral Close Handling: Local Commitment Transaction).

Requirements

A local node: - upon discovering a valid commitment transaction broadcast by a remote node: - if possible: - MUST handle each output as specified below. - MAY take no action in regard to the associated to_remote, which is simply a P2WPKH output to the local node. - Note: to_remote is considered resolved by the commitment transaction itself. - MAY take no action in regard to the associated to_local, which is a payment output to the remote node. - Note: to_local is considered resolved by the commitment transaction itself. - MUST handle HTLCs offered by itself as specified in HTLC Output Handling: Remote Commitment, Local Offers - MUST handle HTLCs offered by the remote node as specified in HTLC Output Handling: Remote Commitment, Remote Offers - otherwise (it is NOT able to handle the broadcast for some reason): - MUST inform the user of potentially lost funds.

Rationale

There may be more than one valid, unrevoked commitment transaction after a signature has been received via commitment_signed and before the corresponding revoke_and_ack. As such, either commitment may serve as the remote node’s commitment transaction; hence, the local node is required to handle both.

In the case of data loss, a local node may reach a state where it doesn’t recognize all of the remote node’s commitment transaction HTLC outputs. It can detect the data loss state, because it has signed the transaction, and the commitment number is greater than expected. It can derive its own remotepubkey for the transaction, in order to salvage its own funds. Note: in this scenario, the node will be unable to salvage the HTLCs.

HTLC Output Handling: Remote Commitment, Local Offers

Each HTLC output can only be spent by either the local offerer, after it’s timed out, or by the remote recipient, by using the HTLC-success transaction if it has the payment preimage.

There can be HTLCs which are not represented by any outputs: either because the outputs were trimmed as dust, or because the remote node has two valid commitment transactions with differing HTLCs.

The HTLC output has timed out once the depth of the latest block is equal to or greater than the HTLC cltv_expiry.

Requirements

A local node: - if the commitment transaction HTLC output is spent using the payment preimage: - MUST extract the payment preimage from the HTLC-success transaction input witness. - Note: the output is considered irrevocably resolved. - if the commitment transaction HTLC output has timed out AND NOT been resolved: - MUST resolve the output, by spending it to a convenient address. - for any committed HTLC that does NOT have an output in this commitment transaction: - if the payment preimage is known: - MUST fulfill the corresponding incoming HTLC (if any). - otherwise: - once the commitment transaction has reached reasonable depth: - MUST fail the corresponding incoming HTLC (if any). - if no valid commitment transaction contains an output corresponding to the HTLC: - MAY fail the corresponding incoming HTLC sooner.

Rationale

If the commitment transaction belongs to the remote node, the only way for it to spend the HTLC output (using a payment preimage) is for it to use the HTLC-success transaction.

The payment preimage either serves to prove payment (when the offering node is the originator of the payment) or to redeem the corresponding incoming HTLC from another peer (when the offering node is forwarding the payment). After a node has extracted the payment, it no longer need be concerned with the fate of the HTLC-spending transaction itself.

In cases where both resolutions are possible (e.g. when a node receives payment success after timeout), either interpretation is acceptable: it’s the responsibility of the recipient to spend it before this occurs.

Once it has timed out, the local node needs to spend the HTLC output (to prevent the remote node from using the HTLC-success transaction) before it can back-fail any corresponding incoming HTLC, using update_fail_htlc (presumably with reason permanent_channel_failure), as detailed in BOLT #2. If the incoming HTLC is also on-chain, a node simply waits for it to timeout, as there’s no way to signal early failure.

There are several reasons a committed HTLC may not have an output in the confirmed commitment transaction: the HTLC may be smaller than dust_limit_satoshis, the HTLC may not have been added to the commitment transaction yet, or the HTLC may have already been failed or fulfilled. In any case, if the payment preimage is known for the HTLC, the upstream HTLC needs to be fulfilled to avoid loss of funds.

If the payment preimage is not known for the missing HTLC, the correct action depends on the possibility of a blockchain reorganization that swaps out the confirmed commitment transaction for one with the HTLC present. If the HTLC is too small to appear in any commitment transaction, such a reorganization is not possible, and the HTLC can be safely failed immediately. Otherwise, a reorganization delay is required before failing the incoming HTLC. The requirement that the incoming HTLC be failed before its own timeout still applies as an upper bound.

HTLC Output Handling: Remote Commitment, Remote Offers

The remote HTLC outputs can only be spent by the local node if it has the payment preimage. If the local node does not have the preimage (and doesn’t discover it), it’s the remote node’s responsibility to spend the HTLC output once it’s timed out.

There are actually several possible cases for an offered HTLC:

1. The offerer is not irrevocably committed to it. In this case, the recipient usually won’t know the preimage, since it won’t forward HTLCs until they’re fully committed. As using the preimage would reveal that this recipient is the final hop, it’s best to allow the HTLC to time out.
2. The offerer is irrevocably committed to the offered HTLC, but the recipient hasn’t yet committed to an outgoing HTLC. In this case, the recipient can either forward it or wait for it to timeout.
3. The recipient has committed to an outgoing HTLC in exchange for an offered HTLC. In this case, the recipient must use the preimage, if it receives it from the outgoing HTLC; otherwise, it will lose funds by sending an outgoing payment without redeeming the incoming one.

Requirements

A local node: - if it receives (or already possesses) a payment preimage for an unresolved HTLC output that it was offered AND for which it has committed to an outgoing HTLC: - MUST resolve the output by spending it to a convenient address. - otherwise: - if the remote node is NOT irrevocably committed to the HTLC: - MUST NOT resolve the output by spending it.

If not otherwise resolved, once the HTLC output has expired, it is considered irrevocably resolved.

Revoked Transaction Close Handling

If any node tries to cheat by broadcasting an outdated commitment transaction (any previous commitment transaction besides the most current one), the other node in the channel can use its revocation private key to claim all the funds from the channel’s original funding transaction.

Requirements

Once a node discovers a commitment transaction for which it has a revocation private key, the funding transaction output is resolved.

A local node: - MUST NOT broadcast a commitment transaction for which it has exposed the per_commitment_secret. - MAY take no action regarding the local node’s main output, as this is a simple P2WPKH output to itself. - Note: this output is considered resolved by the commitment transaction itself. - MUST resolve the remote node’s main output by spending it using the revocation private key. - MUST resolve the remote node’s offered HTLCs in one of three ways: * spend the commitment tx using the payment revocation private key. * spend the commitment tx using the payment preimage (if known). * spend the HTLC-timeout tx, if the remote node has published it. - MUST resolve the local node’s offered HTLCs in one of three ways: * spend the commitment tx using the payment revocation private key. * spend the commitment tx once the HTLC timeout has passed. * spend the HTLC-success tx, if the remote node has published it. - MUST resolve the remote node’s HTLC-timeout transaction by spending it using the revocation private key. - MUST resolve the remote node’s HTLC-success transaction by spending it using the revocation private key. - SHOULD extract the payment preimage from the transaction input witness, if it’s not already known. - if SIGHASH_SINGLE|SIGHASH_ANYONECANPAY is used for HTLC transactions (i.e. option_anchors or zero_fee_commitments applies): - MAY use a single transaction to resolve all the outputs. - If zero_fee_commitments applies: - MUST NOT exceed the 10kvB limit of v3 transactions, otherwise the transaction may not reach miners (as explained in the section about v3 limitations below). - if confirmation doesn’t happen before reaching security_delay blocks from expiry: - SHOULD resolve revoked outputs in their own, separate penalty transactions. A previous penalty transaction claiming multiple revoked outputs at once may be blocked from confirming because of a transaction pinning attack. - otherwise: - MAY use a single transaction to resolve all the outputs. - MUST handle its transactions being invalidated by HTLC transactions.

Rationale

A single transaction that resolves all the outputs will be under the standard size limit because of the 483 HTLC-per-party limit (see BOLT #2).

Note: when SIGHASH_SINGLE|SIGHASH_ANYONECANPAY is used for HTLC transactions (i.e. option_anchors or zero_fee_commitments), the cheating node can pin spends of its HTLC-timeout/HTLC-success outputs. Using a single penalty transaction for all revoked outputs is thus unsafe as it could be blocked to propagate long enough for the local node’s to_local output ’s relative locktime to expire and the cheating party escaping the penalty on this output. Though this situation doesn’t prevent faithful punishment of the second-level revoked output if the pinning transaction confirms.

The security_delay is a fixed-point relative to the absolute expiration of the revoked output at which the punishing node must broadcast a single-spend transaction for the revoked output and actively fee-bump it until its confirmation. The exact value of security_delay is left as a matter of node policy, though we recommend 18 blocks (similar to incoming HTLC deadline).

Penalty Transactions Weight Calculation

There are three different scripts for penalty transactions, with the following witness weights (details of weight computation are in Appendix A):

to_local_penalty_witness: 160 bytes
offered_htlc_penalty_witness: 243 bytes
accepted_htlc_penalty_witness: 249 bytes

The penalty txinput itself takes up 41 bytes and has a weight of 164 bytes, which results in the following weights for each input:

to_local_penalty_input_weight: 324 bytes
offered_htlc_penalty_input_weight: 407 bytes
accepted_htlc_penalty_input_weight: 413 bytes

The rest of the penalty transaction takes up 4+1+1+8+1+34+4=53 bytes of non-witness data: assuming it has a pay-to-witness-script-hash (the largest standard output script), in addition to a 2-byte witness header.

In addition to spending these outputs, a penalty transaction may optionally spend the commitment transaction’s to_remote output (e.g. to reduce the total amount paid in fees). Doing so requires the inclusion of a P2WPKH witness and an additional txinput, resulting in an additional 108 + 164 = 272 bytes.

In the worst case scenario, the node holds only incoming HTLCs, and the HTLC-timeout transactions are not published, which forces the node to spend from the commitment transaction.

With a maximum standard weight of 400000 bytes, the maximum number of HTLCs that can be swept in a single transaction is as follows:

max_num_htlcs = (400000 - 324 - 272 - (4 * 53) - 2) / 413 = 966

Thus, 483 bidirectional HTLCs (containing both to_local and to_remote outputs) can be resolved in a single penalty transaction. Note: even if the to_remote output is not swept, the resulting max_num_htlcs is 967; which yields the same unidirectional limit of 483 HTLCs.

Generation of HTLC Transactions

If option_anchors and zero_fee_commitments do not apply, then HTLC-timeout and HTLC-success transactions are signed with SIGHASH_ALL and are complete transactions with (hopefully!) reasonable fees and must be used directly.

Otherwise, SIGHASH_SINGLE|SIGHASH_ANYONECANPAY MUST be used on the HTLC signatures received from the peer, as this allows HTLC transactions to be combined with other transactions. The local signature MUST use SIGHASH_ALL, otherwise anyone can attach additional inputs and outputs to the tx.

If SIGHASH_SINGLE|SIGHASH_ANYONECANPAY is used, then the HTLC-timeout and HTLC-success transactions are signed with the input and output having the same value. This means they have a zero fee and MUST be combined with other inputs to arrive at a reasonable fee.

Requirements

A node which broadcasts an HTLC-success or HTLC-timeout transaction for a commitment transaction: - if SIGHASH_SINGLE|SIGHASH_ANYONECANPAY is used: - MUST combine it with inputs contributing sufficient fee to ensure timely inclusion in a block. - MAY combine it with other transactions.

General Requirements

A node: - upon discovering a transaction that spends a funding transaction output which does not fall into one of the above categories (mutual close, unilateral close, or revoked transaction close): - MUST warn the user of potentially lost funds. - Note: the existence of such a rogue transaction implies that its private key has leaked and that its funds may be lost as a result. - MAY simply monitor the contents of the most-work chain for transactions. - Note: on-chain HTLCs should be sufficiently rare that speed need not be considered critical. - MAY monitor (valid) broadcast transactions (a.k.a the mempool). - Note: watching for mempool transactions should result in lower latency HTLC redemptions.

Limitations of v3 transactions

When zero_fee_commitments applies, we use v3 transactions, also known as TRUC transactions, which have different policy rules than v2 transactions.

Implementers should read BIP-431 to make sure they don’t create transactions that aren’t relayed by bitcoin nodes.

The main limitation compared to v2 transactions (but not the only one) is that transactions are restricted to 10kvB (instead of 400kvB): when batching transactions (e.g. HTLC transactions), nodes MUST NOT exceed that limit, otherwise the transaction will not reach miners and funds may be at risk.

Appendix A: Expected Weights

Expected Weight of the to_local Penalty Transaction Witness

As described in BOLT #3, the witness for this transaction is:

<sig> 1 { OP_IF <revocationpubkey> OP_ELSE to_self_delay OP_CSV OP_DROP <local_delayedpubkey> OP_ENDIF OP_CHECKSIG }

The expected weight of the to_local penalty transaction witness is calculated as follows:

to_local_script: 83 bytes
    - OP_IF: 1 byte
        - OP_DATA: 1 byte (revocationpubkey length)
        - revocationpubkey: 33 bytes
    - OP_ELSE: 1 byte
        - OP_DATA: 1 byte (delay length)
        - delay: 8 bytes
        - OP_CHECKSEQUENCEVERIFY: 1 byte
        - OP_DROP: 1 byte
        - OP_DATA: 1 byte (local_delayedpubkey length)
        - local_delayedpubkey: 33 bytes
    - OP_ENDIF: 1 byte
    - OP_CHECKSIG: 1 byte

to_local_penalty_witness: 160 bytes
    - number_of_witness_elements: 1 byte
    - revocation_sig_length: 1 byte
    - revocation_sig: 73 bytes
    - one_length: 1 byte
    - witness_script_length: 1 byte
    - witness_script (to_local_script)

Expected Weight of the offered_htlc Penalty Transaction Witness

The expected weight of the offered_htlc penalty transaction witness is calculated as follows (some calculations have already been made in BOLT #3):

offered_htlc_script: 133 bytes

offered_htlc_penalty_witness: 243 bytes
    - number_of_witness_elements: 1 byte
    - revocation_sig_length: 1 byte
    - revocation_sig: 73 bytes
    - revocation_key_length: 1 byte
    - revocation_key: 33 bytes
    - witness_script_length: 1 byte
    - witness_script (offered_htlc_script)

Expected Weight of the accepted_htlc Penalty Transaction Witness

The expected weight of the accepted_htlc penalty transaction witness is calculated as follows (some calculations have already been made in BOLT #3):

accepted_htlc_script: 139 bytes

accepted_htlc_penalty_witness: 249 bytes
    - number_of_witness_elements: 1 byte
    - revocation_sig_length: 1 byte
    - revocation_sig: 73 bytes
    - revocationpubkey_length: 1 byte
    - revocationpubkey: 33 bytes
    - witness_script_length: 1 byte
    - witness_script (accepted_htlc_script)

Authors

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