Lightning Network Interoperability via Submarine Swaps

Research
1

If the Bitcoin Lightning Network starts getting significant adoption, Grin may have difficulty competing, even with its privacy and scaling advantages.

Grin is missing a few primitives needed for an efficient lightning network implementation, specifically per-transaction relative timelocks.

But, directly supporting a grin-denominated lightning network may not be critical. Submarine swaps[0][1] are a proposed technique to atomically bridge an on-chain bitcoin payments into off-chain lightning payments or channel openings, or vice versa.

Grin supports adapter signatures–as already used by Jasper to perform BTC/grin and ETH/grin atomic swaps–which are all that are necessary for submarine swaps. The following transaction types are possible:

  1. On-chain grin → bitcoin lightning network payment: pay a BTC-denominated lightning network invoice with on-chain grin
  2. Bitcoin lightning network payment → on-chain grin: Create a LN-invoice that credits you, via an atomic swap, with on-chain Grin
  3. On-chain grin → bitcoin lightning network channel open: open a BTC-denominated lightning network channel with on-chain grin
  4. Bitcoin lightning network channel close → on-chain grin: Close out a BTC lightning network channel and receive on-chain grin

I think that #3 and #4 are probably the most interesting, since #1 and #2 bridge an on-chain transaction and an off-chain transaction, which burdens what would otherwise be a speedy, low-fee off-chain transaction with fees and delays from the on-chain component. Channel opens and closes are themselves on-chain transactions, so adding an additional cross-chain on-chain component isn’t a significant extra burden.

Just wanted to throw this out there, since others might find it interesting.

[0] https://blockonomi.com/submarine-swaps
[1] https://submarineswaps.org

3 Likes
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Interesting post. Thanks

I’m interested to see if grins small data footprint, make it possible to never need to stake coins to a 2nd layer protocol. In that, if there is a lightning network type thing for grin, that it arises soley out of the utility of payment channels, rater than arising as a ‘solution’ to some problem.

On a side note, I never really saw lightning as a scaling solution even though it is. To me it’s a 2nd layer payment protocol, and always has been.

Thanks for the post, it got me thinking that’s for sure.