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DLC Solidity

This repo contains the solidity smart contracts for the DLC.Link infrastructure.

Learn more about DLCs and DLC.Link.

Overview

A DLC is a contract on Bitcoin that enables users to move/lock Bitcoin conditionally. The possible outcomes of a DLC are predefined and stored by the DLC.Link Attestor Layer. Bitcoin locked in such a way can be represented then on any EVM chain using these smart contracts. The outcome - that is, the value that will be 'attested' to - is supplied by smart contracts too.

This way, any EVM chain can essentially move native Bitcoin in a safe, "bridgeless" way. Ethereum can leverage the power of DLCs and the trustless Attestor Layer that DLC.Link provides.

Learn more about the whole architecture on the documentation site here: https://docs.dlc.link/architecture/tech-stack

Dev notes

Testing

Run unit tests

---

npm run test

*optionally, REPORT_GAS=true npm run test to see gas usage.

Modify the hardhat.config.js for more testing / deployment options.

See test coverage

npm run coverage

Static analysis using Slither

In the root folder, run:

npm run analyze

Scripts

In the scripts directory you will find various helper scripts.

Create a .env based on the .env.template fields. Be sure to set the correct HARDHAT_NETWORK for the scripts to work properly. (Set 'localhost' when using hardhat).

The easiest way to use them is by running the package:

# If the following throws a 'command not found: dlc-link-eth' error, try running 'npm link' after 'npm i' to set up the symlink for your $PATH

# To see help:
dlc-link-eth --help
# For example for contract deployment and admin scripts:
dlc-link-eth contract-admin

To start a local hardhat node to test against:

npx hardhat node

Note that properly testing the entire DLC creation flow requires more of the DLC.Link infrastructure running -- but contract-integration can still be tested thoroughly and easily using the testing framework.

Getting Started

Examples

See our Token Manager contract for an example integration into our core functionality.

Import and Setup

First import the DLCManager contract, and the interface, and construct an object to interact with it.

import "github.com/dlc-link/dlc-solidity/contracts/DLCManager.sol";
# Or only the interface:
# import "github.com/dlc-link/dlc-solidity/contracts/IDLCManager.sol";

import "github.com/dlc-link/dlc-solidity/contracts/DLCLinkCompatible.sol";

// Inherit from DLCLinkCompatible in your contract definition
contract ProtocolContract is DLCLinkCompatible {

// In your constructor, create your DLCManager instance, pointing to our public contract.
DLCManager _dlcManager = DLCManager(publcDLCManagerContractAddress);

Opening a DLC

When you register a DLC with this contract using the createDLC function, a DLC object is created with the core information locked for the lifetime of the DLC.

bytes32 dlcUUID = _dlcManager.createDLC(
            valueLocked       // The amount of BTC to lock
            btcFeeRecipient,  // The address that will receive the fees
            btcMintFeeRate,   // The fee rate for minting the DLC
            btcRedeemFeeRate  // The fee rate for redeeming the DLC
          );

Overrides

The following functions can be overridden from the DLCLinkCompatible contract for various DLC functionality.

// Overwrite this function to run custom logic when the contract (DLC) on Bitcoin has been funded
function setStatusFunded(bytes32 uuid, string btcTxId) external;

// Called after successful DLC closing
function postCloseDLCHandler(bytes32 uuid, string btcTxId) external;

Closing the DLC

Finally, the contract can call close on the DLCManager with the UUID of the contract to create the DLC attestation and close the Bitcoin contract. At this point, the funds will get sent out of the Bitcoin contract and sent back to the user's BTC wallet.

 _dlcManager.closeDLC(dlcUUID);

 // Overwrite this function to complete the close DLC logic
function postCloseDLCHandler(bytes32 uuid, string btcTxId) external;

Contributing

We are happy to have support and contribution from the community. Please find us on Discord and see below for developer details.

Setup

For reference, you can find samples of the deployed contract by checking the deploymentFiles directory in this project.

Add a .env file with the following fields:

# Infura key
INFURA_PROJECT_ID=
# Deployer private key
KEY=
# optional
KEY2=
# optional
KEY3=
# Etherscan API KEY (optional)
# only needed for submitting the contract to etherscan
ETHERSCAN_API_KEY=
# Network to use e.g. localhost(for hardhat)/goerli/sepolia/mainnet
HARDHAT_NETWORK=
# Coinmarketcap API KEY (optional, for gas calculations)
COINMARKETCAP_API_KEY=
# Report gas usage after test run (optional) boolean
REPORT_GAS=
# SAFE key signer (optional)
KEY_FOR_SAFE=

What Are DLCs

Discreet Log Contracts (DLCs) facilitate conditional payments on Bitcoin between two or more parties. By creating a Discreet Log Contract, two parties can form a monetary contract redistributing their funds to each other without revealing any details to the blockchain. Its appearance on the Bitcoin blockchain will be no different than an ordinary multi-signature output, so no external observer can learn its existence or details from the public ledger. A DLC is similar to a 2-of-3 multisig transaction where the third participant is an “oracle”. An oracle is a 3rd party source of data or information that the parties to the DLC trust as the source of truth for the contract. The oracle is incentivized to be a fair arbiter of the contract.

About DLC Link

DLC.Link is building infrastructure to empower decentralized applications and smart contract developers to easily leverage the power of DLCs. We provide companies and applications with a traditional REST API and a smart contract interface to create and manage DLCs for their use cases.

DLCs require an oracle to attest to a specific outcome among the predefined set of outcomes. That means trust.

Why power DLC oracles with smart contracts? By using a smart contract for this task, the implementation of the logic, as well as the data being used, is stamped on the chain, and is visible and reviewable by everyone.

Unlike other DLC Oracle server solutions, DLC.link allows the DLCs to be configured with a simple interface, API or via smart contract, and to act on a wide-set of events and data sources through our decentralized infrastructure.

There are two types of events / data sources supported by DLC.link.

1. Off-chain pricing data, such as the current price of BTC, ETH, etc. In fact, any numeric data from Chainlink Oracle Network is supported.

2. On-chain events, such as a completed transaction, a function call, etc.