dlcspecs/Transactions.md

DLC Transactions

It is recommended that all keys be generated/derived as specified here.

Funding Transaction

Known Values

• Local Funding Inputs: List[TransactionInput]
• Local Change ScriptPubKey: ScriptPubKey
• Local Funding Public Key: ECPublicKey
• Remote Funding Inputs: List[TransactionInput]
• Remote Change ScriptPubKey: ScriptPubKey
• Remote Funding Public Key: ECPublicKey
• nLockTime: UInt32
• Total Local Collateral: CurrencyUnit
• Total Remote Collateral: CurrencyUnit
• Fee Rate: FeeUnit

Where

• Local something something Remote
• The sum of each Funding Inputs' value is at least that of its Total Collateral
• Funding Public Keys are both 33-byte compressed public keys
• nLockTime is in the past (rather than just using 0)
  • for privacy purposes and also to prevent fee snipping
• Both Change ScriptPubKeys must be either P2WSH/P2WPKH, or P2SH-P2WSH/P2SH-P2WPKH

Global

• nLockTime

Inputs

• Local Funding Inputs
• Remote Funding Inputs

Outputs

• P2WSH(DLC Funding Output)
• Local Change ScriptPubKey
• Remote Change ScriptPubKey

Where

• P2WSH(DLC Funding Output)'s value is Total Local Collateral + Total Remote Collateral + Computed CET Fee + Computed ToLocal Closing Fee

• DLC Funding Output's script is

  OP_2 <Local Funding Public Key> <Remote Funding Public Key> OP_2 OP_CHECKMULTISIG
  

• Each Change ScriptPubKey's value is at most that of its respective Sum(Funding Inputs) - Total Collateral - Computed Fees - (Computed CET Fee + Computed ToLocal Closing Fee)/2 with Computed Fees being proportional to each party's total input weight and Computed CET Fee being the estimated fee for a Contract Execution Transaction and Computed ToLocal Closing Fee being the estimated fee for a Unilateral Closing Transaction

Contract Execution Transaction

Known Values

• Oracle Signature Point: ECPublicKey
• Local CET Public Key: ECPublicKey
• Local Payout: CurrencyUnit
• Remote CET Public Key: ECPublicKey
• Remote Paytout: CurrencyUnit
• nLockTime: UInt32
• Timeout: UInt32
• DLC Funding Output: ScriptPubKey
• Fee Rate: FeeUnit

Where

• Oracle Signature Point is the 33-byte public key associated with this CET's outcome
• Both CET Public Keys are 33-byte compressed public keys
• Local Paytout + Remote Payout = (DLC Funding Output).value
• nLockTime is set to the contract maturity time
• Timeout is a CSV locktime after which penalty transactions are valid
• DLC Funding Output is of the form specified above

Global

• nLockTime

Inputs

• Input Spending(P2WSH(DLC Funding Output))

Outputs

• P2WSH(ToLocalOutput)
• ToRemoteOutput

Where

• P2WSH(ToLocalOutput).value = Local Payout + Computed ToLocal Closing Fee

• ToRemoteOutput.value = Remote Payout

• ToLocalOutput's script is:

  OP_IF
    <Oracle Signature Point + Local CET Public Key>
  OP_ELSE
    <Timeout> OP_CHECKSEQUENCEVERIFY OP_DROP
    <Remote CET Public Key>
  OP_ENDIF
  OP_CHECKSIG
  

  • Note that The addition in the if case is elliptic curve point addition

• ToRemoteOutput's script is:

  OP_0 <Hash160(Remote CET Public Key)>
  

  Which is P2WPKH(Remote CET Public Key)

Refund Transaction

Known Values

• Local Refund Public Key: ECPublicKey
• Total Local Collateral: CurrencyUnit
• Remote Refund Public Key: ECPublicKey
• Total Remote Collateral: CurrencyUnit
• Timeout: UInt32
• DLC Funding Output: ScriptPubKey
• Fee Rate: FeeUnit

Where

• Unlike CETs in a DLC, there is only one Refund Transaction that both parties share, similar to how there is only one Funding Transaction
• Both Refund Public Keys are 33-byte compressed public keys
• Total Local Collateral + Total Remote Collateral = (DLC Funding Output).value
• Timeout is a CLTV locktime set well after the contract maturity time
• DLC Funding Output is of the form specified above

Global

• nLockTime is Timeout

Inputs

• Input Spending(P2WSH(DLC Funding Output))

Outputs

• ToLocalOutput
• ToRemoteOutput

Where

• ToLocalOutput's value is Total Local Collateral + RefundFeeDelta/2

• ToRemoteOutput's value is Total Remote Collateral + RefundFeeDelta/2

• RefundFeeDelta = Computed CET Fee + Computed ToLocal Closing Fee - Computed Refund Tx Fee (note that the Refund Transaction is smaller than any CET)

• ToLocalOutput's script is:

  OP_0 <Hash160(Local Refund Public Key)>
  

  Which is P2WPKH(Local Refund Public Key)

• ToRemoteOutput's script is:

  OP_0 <Hash160(Remote Refund Public Key)>
  

  Which is P2WPKH(Remote Refund Public Key)

Mutual Closing Transaction

Known Values

• Local Mutual Closing Public Key: ECPublicKey
• Local Payout: CurrencyUnit
• Remote Mutual Closing Public Key: ECPublicKey
• Remote Payout: CurrencyUnit
• nLockTime: UInt32
• DLC Funding Output: ScriptPubKey
• Fee Rate: FeeUnit

Where

• After the contract maturity time, Mutual Closing Transaction is created in cooperation for fee reduction and improvement in privacy
• Both Mutual Closing Public Keys are 33-byte compressed public keys
• Local Payout = (Contract Execution Transaction Local Payout).value
• Remote Payout = (Contract Execution Transaction Remote Payout).value
• nLockTime is in the past (rather than just using 0)
  • for privacy purposes and also to prevent fee snipping
• DLC Funding Output is of the form specified above

Global

• nLockTime

Inputs

• Input Spending(P2WSH(DLC Funding Output))

Outputs

• ToLocalOutput
• ToRemoteOutput

Where

• ToLocalOutput's value is Local Payout + MutualClosingFeeDelta/2

• ToRemoteOutput's value is Remote Payout + MutualClosingFeeDelta/2

• MutualClosingFeeDelta = Computed CET Fee + Computed ToLocal Closing Fee - Computed MutualClosing Tx Fee (note that the Mutual Closing Transaction is smaller than any CET)

• ToLocalOutput's script is:

  OP_0 <Hash160(Local Mutual Closing Public Key)>
  

  Which is P2WPKH(Local Mutual Closing Public Key)

• ToRemoteOutput's script is:

  OP_0 <Hash160(Remote Mutual Closing Public Key)>
  

  Which is P2WPKH(Remote Mutual Closing Public Key)

Closing Transaction (Unilateral)

Known Values

• Local Unilateral Public Key: ECPublicKey
• nLockTime: UInt32
• Local Payout: CurrencyUnit
• ToLocalOutput: ScriptPubKey
• Fee Rate: FeeUnit

Where

• ToLocalOutput is of the form specified above
• nLockTime is in the past (rather than just using 0)
  • for privacy purposes and also to prevent fee snipping

Global

• nLockTime

Inputs

• Input Spending(P2WSH(ToLocalOutput))

Outputs

• P2WPKH(Local Unilateral Public Key)

Where

• P2WPKH(Local Unilateral Public Key)'s value is Local Payout

Closing Transaction (Penalty)

Known Values

• Local Penalty Public Key: ECPublicKey
• nLockTime: UInt32
• Remote's ToLocalOutput: ScriptPubKey
• Fee Rate: FeeUnit

Where

• Remote's ToLocalOutput is of the form specified above
• nLockTime is in the past (rather than just using 0)
  • for privacy purposes and also to prevent fee snipping

Global

• nLockTime

Inputs

• Input Spending(P2WSH(Remote's ToLocalOutput))

Outputs

• P2WPKH(Local Justice Public Key)

Where

• P2WPKH(Local Penalty Public Key)'s value is P2WSH(Remote's ToLocalOutput).value - fee