Bitcoin Optech Newsletter #428

This week’s newsletter describes a design for a single-issuer layer 2 whose users can redeem their bitcoin onchain without the issuer’s cooperation and summarizes a proposal for including hash preimages in output script descriptors. Also included are our regular sections describing recent changes to services and client software, announcing new releases and release candidates, and describing notable changes to popular Bitcoin infrastructure software.

News

● Trust-minimized exits from a single-issuer layer 2: Adam Gibson posted to the Bitcoin-Dev mailing list a paper and proof-of-concept code for Lichen, a design in which a single issuer, which Gibson calls a hub, mints tokens redeemable one-to-one for bitcoin on a layer 2 ledger run by a server called the sequencer. Each user holds a 2-of-2 contract with the hub that lets them redeem their tokens even if the hub refuses or is offline, so users trust the sequencer to run the ledger honestly but not the hub to return their bitcoin. The design builds on LN-GAP (see Newsletter #427 ) but replaces its honest-majority attestation committee with a dispute settled entirely onchain.

Each user locks bitcoin in their own 2-of-2 output with the hub and receives the same amount of tokens on the layer 2 ledger, where users pay each other without touching the chain. To exit, a user hands tokens back to the hub and collects bitcoin from their own output. Because that output is the only one a user can draw on, the hub also locks some of its own bitcoin in each output up to a negotiated cap, like LN inbound liquidity, so that the user can redeem tokens received from others. Tokens received beyond the cap are redeemable only at the hub’s discretion.

In the cooperative case, the hub simply signs a settlement of the output paying the user. If it refuses or does not respond, the user generates a Groth16 proof that the sequencer signed a state recording the returned tokens. Since Script cannot verify such a proof, the user instead claims onchain that a fixed verifier program accepts it, and if the hub disputes that, presigned BitVMX transactions narrow the disagreement to a single execution step that Script can check. Each side locks a reserve that it forfeits by losing a dispute, deterring false claims and refusals. Gibson acknowledges that a sequencer that omits a user’s return, or signs a state it never validly reached, can still cost the user or the hub funds, and lists validity proofs and a committee of sequencers as future work.

● Descriptor syntax for hash preimages: João Dias posted to Delving Bitcoin a proposal for extending BIP379 to add a private form for hash fragments to miniscript . As of today, there is no way to directly give a preimage to Bitcoin Core’s wallet to spend funds that need one to satisfy a spending condition. It is only possible to provide it through external tools in one of the PSBT hash fields (e.g. PSBT_IN_SHA256 ). The author noted that this proposal only covers the preimages already known when a descriptor is created, not those learned at spend time, such as in a HTLC .

Dias explained that the preimage should be treated more like a key than a signature, highlighting an inconsistency in the descriptor model. His idea aims to let a wallet import a secret from a descriptor and build and sign a transaction directly. To do so, the author proposed a specific syntax for the descriptor (e.g. sha256(preimage(HEX)) ) and a set of boundaries, such as the need for a specific marker instead of raw hex, a fixed size of 32 bytes for all the hash fragments, and the requirement to handle the preimage like any other secret, with backups, encryption, and never shown in the public descriptor string.

Before proceeding to formalize the proposal, Dias highlighted some open points that need to be addressed, such as what the marker syntax should be , whether to amend BIP379 or draft a new BIP, if it is necessary to add an RPC call for Bitcoin Core to manage preimages, whether hardware signing devices should handle preimage secrets or this should remain software-wallet-only, and if there is any interest in deterministically deriving preimages from key material.

Changes to services and client software

In this monthly feature, we highlight interesting updates to Bitcoin wallets and services.

● Ibis Wallet v5.0-beta released: Ibis Wallet v5.0-beta (see Newsletter #406 ) adds Ark support built on Bark, unilateral exits from the Spark statechain , and receiving to silent payment addresses.

● Landfall wallet for Lightning mining payouts: Landfall is a proof-of-concept wallet, showing UX achievable today, that derives from a single seed the payout address, BOLT12 offer , and BIP322 signature that the OCEAN mining pool requires to pay rewards over LN, using a Lexe-hosted node (see Newsletter #419 ). It is not intended for production use.

● rbitcoin 0.8.0 released: rbitcoin 0.8.0 is a Bitcoin full node written in Rust and built on rust-bitcoin, described as entirely AI-written, for wallet and Lightning backends that replaces the UTXO set with a relational archive, serves Electrum and Esplora-style APIs, and uses BIP324 exclusively.

Releases and release candidates

New releases and release candidates for popular Bitcoin infrastructure projects. Please consider upgrading to new releases or helping to test release candidates.

● Eclair 0.14.4 and 0.14.5 are security releases for this LN node implementation. Version 0.14.4 fixes several issues related to splicing , HTLC settlement, on-the-fly funding , and onion parsing, as described in Newsletter #427 . It also rejects API requests with an Origin header to prevent cross-site request forgery using cached HTTP Basic authentication credentials (see Newsletter #423 ). Browser-based integrations must now use their own backend to call Eclair. Version 0.14.5 fixes the trampoline routing and taproot splicing vulnerabilities described below, and closes an integer-overflow bypass of the onion payload length validation covered in Newsletter #427 . The project strongly recommends upgrading.

● BDK chain 0.23.4 is a maintenance release of BDK’s libraries for building Bitcoin wallets. It fixes issues with transaction tracking and full scans that stop before checking all previously revealed addresses. Accompanying updates fix Bitcoin Core RPC synchronization after reorgs and include previously covered Electrum fixes for txid verification , confirmation detection for transactions with an OP_RETURN first output , and confirmation tracking after reorgs .

● LND v0.21.5-beta.rc1 and v0.20.6-beta.rc1 are release candidates for maintenance versions of this popular LN node implementation. Both include the fee-update handling and channel-message limits described in Newsletter #418 , along with fixes for commitment feerates, excessive memory allocation when parsing TLV records, and SQL database deadlocks. Version 0.21.5 also includes the auxiliary HTLC signature validation fix for Taproot Assets channels described in Newsletter #427 , and fixes wallet synchronization during blockchain reorganizations.

Notable code and documentation changes

Notable recent changes in Bitcoin Core , Core Lightning , Eclair , LDK , LND , libsecp256k1 , Hardware Wallet Interface (HWI) , Rust Bitcoin , BTCPay Server , BDK , Bitcoin Improvement Proposals (BIPs) , Lightning BOLTs , Lightning BLIPs , Bitcoin Inquisition , and BINANAs .

● Eclair #3409 fixes a vulnerability that could allow a malicious payer to steal funds from a node forwarding trampoline payments . Eclair now limits the total CLTV expiry delta of a downstream route to ensure that the outgoing HTLC expires before the incoming HTLC (see Newsletter #423 for a related fix). Previously, when pathfinding failed, Eclair would retry with relaxed limits on route length and expiry, allowing a payer to provide routing hints or blinded paths with excessive expiry deltas. The payer could then reclaim the incoming HTLC onchain after it expired, while the receiver could still claim the outgoing HTLC. Eclair now only relaxes the route-length limit, preserving the required expiry ordering.

● Eclair #3411 fixes a vulnerability that could allow a malicious channel peer to steal funds by making Eclair sign an invalid splice transaction (see Newsletter #427 for related fixes). When splicing simple taproot channels , a peer can only provide the amount and script of an input’s previous output instead of the full transaction. Previously, Eclair trusted these values without verifying them. A peer could lie about either field, causing Eclair to sign a splice transaction that could never confirm because taproot signatures commit to the actual amounts and scripts of the spent inputs. Nevertheless, Eclair would treat the invalid splice as its latest channel funding state. The peer could then publish a previously signed commitment spending the previous funding output and claim an outgoing HTLC using its payment preimage after Eclair’s corresponding incoming HTLC had timed out and been refunded, leaving Eclair unable to collect the forwarded payment. Eclair now verifies the claimed outputs against its Bitcoin backend before signing.

● LDK #5126 fixes a bug where BOLT12 payments using one-hop blinded paths could be rejected because their HTLC expiry was too short. Previously, LDK ignored the path’s cltv_expiry_delta because the introduction node was also the receiver. This overlooked the fact that it includes the receiver’s required final CLTV delta . Consequently, payments only met the receiver’s minimum requirement when LDK’s random CLTV offset was large enough. This caused intermittent payment failures when testing against Core Lightning. LDK now includes the advertised delta when constructing the route and checking its maximum permitted total CLTV delta.

● LND #10919 adds an experimental local reputation system to mitigate channel jamming attacks , based on the proposed HTLC accountability scheme (see Newsletters #377 and #387 ), which replaces the earlier HTLC endorsement approach. The system scores outgoing channels based on past forwarding activity and the node’s advertised fees, penalizing accountable HTLCs that take too long to resolve. The system is enabled by default and logs whether HTLCs would qualify for protected resources, without affecting forwarding decisions. Reputation resets on restart.

● BTCPay Server #7679 fixes a bug that could lead to duplicate Lightning payouts. Previously, if a payout was initiated and a subsequent payment lookup returned no results, BTCPay Server would cancel the payout and discard its saved payment hash. This occurred even if the payment had succeeded. Consequently, an operator could issue another payout for a payment that had already succeeded. BTCPay Server now retains payouts in progress and their payment hashes for subsequent checks.

● BTCPay Server #7684 fixes a privilege escalation in its Greenfield API key authorization. Previously, an API key restricted to a particular store could exercise server-wide or account-wide permissions despite its limited scope. Additionally, a key authorized to create API keys for other users could also grant permissions broader than its own. BTCPay Server now enforces permission scopes when authorizing requests and prevents API keys from granting permissions they do not possess. Existing unrestricted administrator keys retain their intended capabilities.

● BDK #2325 and #2360 fix two bugs that could cause the wallet to report successful synchronization without retrieving the requested transaction data. The first affects Electrum synchronization of individual outpoints. Previously, BDK ignored all errors encountered when fetching their transactions, including connection failures and timeouts. This could cause a spent output to remain classified as unspent. BDK now ignores Electrum protocol errors on this path while propagating other failures. The second PR fixes sync and full_scan in the Electrum and Esplora clients. Previously, setting Electrum’s batch_size or Esplora’s parallel_requests to zero could silently skip requested scans or transaction fetches while reporting success. Both clients now treat zero as one for these parameters.

● BOLTs #1357 updates BOLT11 to require invoice readers to reject invoices unless they contain exactly one payment hash ( p ) and one payment secret ( s ) field. Previously, the specification recommended that payers use the first p field, while some invoice parsers used the last. This discrepancy was exploited against LNP2PBot , whose invoice parser and Lightning node selected different payment hashes. Consequently, the bot treated completed payouts as unpaid, allowing attackers to obtain duplicate payouts (see Newsletter #425 ).

● BOLTs #1352 corrects several errors in the simple taproot channels specification and test vectors (see Newsletter #404 ). Errors in taproot output-key derivation and control-block construction could produce invalid spends if implemented as previously specified. The PR also clarifies that HTLC signatures exchanged in commitment_signed use SIGHASH_SINGLE|SIGHASH_ANYONECANPAY : the receiving peer appends 0x83 to the 64-byte signature when constructing the witness. When combining second-level transactions for fee bumping, each HTLC input and its corresponding output must occupy matching indices in the combined transaction. Additional corrections cover anchor spending paths , MuSig2 nonce encoding and derivation, and local and remote commitment test vectors. These changes align the specification with existing LND and Eclair implementations without changing protocol behavior.

Want more?

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