Thread

I made a chart that compares my new Papa Swap protocol with traditional Submarine Swaps. I also implemented the code in the form of a wallet that works like Muun Wallet, but using Papa Swaps. I plan to present my research and demo my code at Bitcoin++ Istanbul. See you there! image

Replies (4)

↩ replying to npub1dges...mccn
Not needing revealing the preimage is one theoretical advantage, but a bigger advantage is that the user gets full, unilateral control of the money after only 1 tx. They do not need to sweep it, as possession of the secret and a sighash_none sig from the server lets the user send the money wherever the user wants to. The server, by contrast, is limited: he can only send the money into a traditional submarine swap address, which the user controls too, since the server has to wait 2 weeks to do anything, and the user does not, as the user knows the secret. So the user has full control of the money in the papa swap address in the same sense that a user fully controls their LN balance. Also, in my implementation, the sig that lets the server move the money into a submarine swap address depends on the existence of a utxo that gets consumed when the user next sends or receives money. Once the user does that, the old sig becomes invalid, so the server cannot even move the money into a traditional submarine swap address.
The problem I see with this design is that the server has to do L1 transaction + commit to locking funds up for possible time period without assurance from user that they will pay lightning invoice. I may be misunderstanding. These problems could be mitigated with a fee that has to be played before the L1 transaction but I would like to hear your ideas for mitigation @npub1yxp7...399s Thanks! Very interesting idea!
↩ replying to npub1vzpz...yevx
Yup, this is a general unsolved problem with submarine swaps: the party with the timelock path can be grieved by abandoning the swap after the name the L1 deposit. They lose atwo mining fees and make no money. I think a fidelity bond paid via LN can help here. If you compete the swap, you trust the server to give you the bond money back. If you abandon the swap, the server keeps the bond money to reimburse their two mining fees.