[Resource Topic] 2022/958: Get Me out of This Payment! Bailout: An HTLC Re-routing Protocol

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Get Me out of This Payment! Bailout: An HTLC Re-routing Protocol

Authors: Oguzhan Ersoy, Pedro Moreno-Sanchez, and Stefanie Roos


The Lightning Network, a real-world payment channel network deployed over Bitcoin, provides almost-instant payments to its parties. In addition to direct payments, which require a shared account, parties can pay each other in the form of multi-hop payments via existing payment channels. Such multi-hop payments rely on a 2-phase commit protocol to achieve balance security; that is, no honest intermediary party loses her coins. Unfortunately, failures or attacks in this 2-phase commit protocol can lead to coins being committed (locked) in a payment for extended periods of time (in the order of days in the worst case). During these periods, parties cannot go offline without losing funds due to their existing commitments, even if they use watchtowers. Furthermore, they cannot use the locked funds for initiating or forwarding new payments, reducing their opportunities to use their coins and earn fees. We introduce Bailout, the first protocol that allows intermediary parties in a multi-hop payment to unlock their coins before the payment completes by re-routing the payment over an alternative path. We achieve this by creating a circular payment route starting from the intermediary party in the opposite direction of the original payment. Once the circular payment is locked, both payments are canceled for the intermediary party, which frees the coins of the corresponding channels. This way, we create an alternative route for the ongoing multi-hop payment without involving the sender or receiver. The parties on the alternative path are incentivized to participate through fees. We prove the security of our protocol in the Universal Composability (UC) framework. Furthermore, we evaluate the utility of our protocol using a real-world Lightning Network snapshot. Bailouts may fail due to insufficient balance in alternative paths used for re-routing. We find that attempts of a node to bailout typically succeed with a probability of more than 94% if at least one alternative path exists.

ePrint: https://eprint.iacr.org/2022/958

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